FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
Commission file number 1-9340
REEBOK INTERNATIONAL LTD.
_________________________________________________________________
(Exact name of registrant as specified in its charter)
Massachusetts 04-2678061
____________________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Technology Center Drive, Stoughton, Massachusetts 02072
_________________________________________________________________
(Address of principal executive offices) (Zip Code)
(617) 341-5000
_________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
The number of shares outstanding of registrant's common stock,
par value $.01 per share, at November 8, 1994, was 81,076,844
shares.
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REEBOK INTERNATIONAL LTD.
INDEX
PART I. FINANCIAL INFORMATION:
Item 1 Financial Statements (Unaudited)
Consolidated Balance Sheets - September 30, 1994 and
1993, and December 31, 1993 . . . . . . . . . . 2-3
Consolidated Statements of Income - Three and Nine
Months ended September 30, 1994 and 1993. . . . 4
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1994 and 1993 . 5-6
Notes to Consolidated Financial Statements . . . 7
Item 2
Management's Discussion and Analysis of Results
Of Operations and Financial Condition . . . . . 8-12
Part II. OTHER INFORMATION:
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . 13
Items 2-5 Not Applicable . . . . . . . . . . . . . . . . . 13
Item 6 Exhibits and Reports on Form 8-K . . . . . . . . 13
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1994 1993* 1993
__________ __________ ___________
(Amounts in thousands)
Current assets:
Cash and cash equivalents $ 97,038 $ 123,100 $ 79,347
Accounts receivable, net
of allowance for doubtful
accounts (1994, $50,309;
September 1993, $48,496;
December 1993, $46,455) 644,781 555,422 457,399
Inventory 518,367 433,340 514,027
Deferred income taxes 62,858 71,792 54,784
Prepaid expenses 29,378 20,842 21,558
__________ __________ __________
Total current assets 1,352,422 1,204,496 1,127,115
__________ __________ __________
Property and equipment, net 149,406 134,278 130,607
Non-current assets:
Intangibles, net of
amortization 97,226 96,012 94,262
Deferred income taxes - - 1,250
Other 44,191 29,818 38,477
__________ __________ __________
141,417 125,830 133,989
__________ __________ __________
$1,643,245 $1,464,604 $1,391,711
========== ========== ==========
* Certain amounts have been reclassified to permit comparisons.
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
September 30, December 31,
1994 1993* 1993
__________ __________ __________
(Amounts in thousands,except share data)
Current liabilities:
Notes payable to banks $ 73,585 $ 37,259 $ 23,852
Current portion of
long-term debt 3,508 3,341 3,009
Accounts payable 154,193 156,056 138,188
Accrued expenses 157,689 180,055 143,784
Income taxes payable 127,567 87,183 81,240
Dividends payable 6,137 6,423 6,285
__________ __________ __________
Total current liabilities 522,679 470,317 396,358
__________ __________ __________
Long-term debt, net of
current portion 134,863 133,966 134,207
Deferred income taxes - 32 -
Minority interest 23,252 13,849 14,529
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01;
authorized 250,000,000 shares;
issued 1994, 117,586,751;
issued September 30, 1993,
121,106,816;issued December
31, 1993, 119,902,298 1,176 1,211 1,199
Additional paid-in capital 185,326 303,103 266,890
Retained earnings 1,381,097 1,153,773 1,198,190
Less 36,210,902 shares in
treasury at cost (603,241) (603,241) (603,241)
Unearned compensation (2,746) (392) (3,276)
Foreign currency translation
adjustment 839 (8,014) (13,145)
__________ __________ __________
962,451 846,440 846,617
__________ __________ __________
$1,643,245 $1,464,604 $1,391,711
========== ========== ==========
* Certain amounts have been reclassified to permit comparisons.
The accompanying notes are an integral part of the consolidated
financial statements.
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
____________________ ___________________
1994 1993* 1994 1993*
____ ____ ____ ____
<S> <C> <C> <C> <C>
Net sales $ 937,148 $ 808,493 $2,571,267 $2,291,326
Other income (expense) 5,382 25 4,336 (901)
_________ _________ __________ __________
942,530 808,518 2,575,603 2,290,425
Costs and expenses:
Cost of sales 561,818 485,849 1,550,641 1,366,019
Selling, general and
administrative expenses 236,157 198,082 678,776 603,409
Special charges - 8,449 - 8,449
Amortization of intangibles 984 2,509 3,198 7,441
Minority interest 3,627 2,829 7,308 6,889
Interest expense 4,515 5,924 13,757 17,814
Interest income (1,111) (1,142) (2,999) (3,832)
_________ _________ __________ __________
805,990 702,500 2,250,681 2,006,189
_________ _________ __________ __________
Income before income taxes 136,540 106,018 324,922 284,236
Income taxes 51,885 42,085 123,470 111,506
_________ _________ __________ __________
Net income $ 84,655 $ 63,933 $ 201,452 $ 172,730
========= ========= ========== ==========
Net income per common share $ 1.01 $ .74 $ 2.38 $ 1.94
========= ========= ========== ==========
Dividends per common share $ .075 $ .075 $ .225 $ .225
========= ========= ========== ==========
Weighted average common and
common equivalent shares
outstanding 84,091 86,906 84,604 89,117
========= ========= ========== ==========
* Certain amounts have been reclassified to permit comparisons.
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
________________
1994 1993
____ ____
(Amounts in thousands)
Cash flows from operating activities:
Net income $ 201,452 $ 172,730
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 24,931 19,895
Amortization of intangibles 3,198 7,441
Minority interest, net of dividends paid 8,083 4,333
Amortization of unearned compensation 678 219
Deferred income taxes (6,396) 1,978
Special charges - 8,449
Changes in operating assets and
liabilities, exclusive of those arising
from business acquisitions:
Accounts receivable (166,813) (136,164)
Inventory 9,588 450
Prepaid expenses (7,239) 2,919
Other (10,757) (19,672)
Accounts payable 4,975 9,615
Accrued expenses 13,006 47,199
Income taxes payable 43,935 (2,153)
__________ __________
Total adjustments (82,811) (55,491)
__________ __________
Net cash provided by operating activities 118,641 117,239
__________ __________
Cash flows from investing activities:
Payments to acquire property and
equipment (38,805) (23,600)
Proceeds from sale of businesses
held for sale - 36,500
__________ __________
Net cash (used for) provided by investing
activities (38,805) 12,900
__________ __________
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
___________________
1994 1993
____ ____
(amounts in thousands)
<S> <C> <C>
Cash flows from financing activities:
Net borrowings of notes payable to banks 48,299 31,892
Net borrowings (repayments) of long-term debt (1,099) 16,050
Proceeds from issuance of common stock to
employees 6,193 5,220
Dividends paid (18,693) (19,870)
Repurchases of common stock (87,929) (150,218)
________ _________
Net cash used for financing activities (53,229) (116,926)
________ _________
Effect of exchange rate changes on cash
and cash equivalents (8,916) 4,501
________ _________
Net increase in cash and cash equivalents 17,691 17,714
________ _________
Cash and cash equivalents at beginning of period 79,347 105,386
________ _________
Cash and cash equivalents at end of period $ 97,038 $123,100
======== =========
Supplemental disclosures of cash flow information:
1994 1993
____ ____
Cash paid during the period for:
Interest $ 16,356 $ 20,014
Income taxes 77,143 106,812
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
______________________________
The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the nine months ended
September 30, 1994 are not necessarily indicative of the
results that may be expected for the year ended December 31,
1994. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's annual report on form 10-K for the year ended
December 31, 1993.
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following table shows the percentage which amounts in the Consolidated
Statements of Income bear to net sales:
<TABLE>
<CAPTION>
Percentage of Net Sales
_______________________
Three Months Ended Nine Months Ended
September 30, September 30,
__________________ _________________
1994 1993 1994 1993
____ ____ ____ ____
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Other income (expense) .6 - .1 (.0)
______ ______ ______ ______
100.6 100.0 100.1 100.0
Costs and expenses:
Cost of sales 59.9 60.1 60.3 59.6
Selling, general and
administrative expenses 25.2 24.5 26.4 26.3
Special charges - 1.0 - .4
Amortization of intangibles .1 .3 .1 .4
Minority interest .4 .4 .3 .3
Interest expense .5 .7 .5 .8
Interest income (.1) (.1) (.1) (.2)
______ ______ ______ ______
86.0 86.9 87.5 87.6
______ ______ ______ ______
Income before income taxes 14.6 13.1 12.6 12.4
Income taxes 5.6 5.2 4.8 4.9
______ ______ ______ ______
Net income 9.0% 7.9% 7.8% 7.5%
====== ====== ====== ======
</TABLE>
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REEBOK INTERNATIONAL LTD. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
OPERATING RESULTS
THIRD QUARTER 1994 COMPARED TO THIRD QUARTER 1993
Net sales for the quarter ended September 30, 1994
increased by $128.7 million, 15.9% over the level reported
for the third quarter of 1993. The Reebok Division's
worldwide sales were $805.7 million, an increase of 17.1%
from $687.9 million in 1993. The Reebok Division's U.S.
footwear sales increased 16.6% to $385.2 million from $330.3
million in 1993. This increase is attributed primarily to
increases in the outdoor, classics, Preseason and walking
categories, which were partially offset by decreases in some
other categories, particularly basketball. The Reebok
Division's U.S. apparel sales increased by 22.7% to $43.1
million from $35.1 million in 1993. The Reebok Division's
International sales (including both footwear and apparel)
were $377.4 million in 1994, an increase of 17.1% from
$322.4 million in 1993, due to increased sales in all
countries except for the Netherlands. Changes in foreign
exchange rates had a $12.1 million positive effect on the
Reebok Division's International sales, or an increase of
3.2% compared with 1993.
Rockport sales increased by 17.1% to $93.4 million from
$79.8 million in 1993. This increase is due to an increase
in the number of pairs shipped. Avia sales decreased by
7.0% to $38.0 million from $40.8 million in 1993. The
decrease in Avia's sales is due to decreases in both
domestic and international sales. The decrease in Avia's
U.S. sales is attributed primarily to decreases in the
aerobics and cross training categories.
Other income increased in the third quarter due mainly to
increased income from partially-owned distributors recorded
in 1994's third quarter.
The increase in gross margin from 39.9% in 1993 to 40.1%
in 1994 is mainly due to lower markdowns in the Reebok
Division's U.S. footwear business.
Selling, general and administrative expenses increased as
a percentage of sales from 24.5% in 1993 to 25.2% in 1994
partly due to the continuing increased investments in
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information systems, as well as higher distribution costs
mainly associated with the opening of a new apparel facility
in Memphis, Tennessee. The increased investments in
information systems are expected to continue over the next
few years.
Net income in 1994 was higher than net income in 1993
partially as a result of an additional pre-tax special
charge of $8.5 million recorded by the Company in the third
quarter of 1993 related to the sales of Boston Whaler and
Ellesse, which were completed during the third quarter of
1993. This special charge was in addition to charges
previously recorded in December 1992, when the Company
announced its intention to sell these businesses.
Amortization of intangibles decreased due to the fact
that many of the intangibles acquired upon the acquisition
of Rockport in 1986 had a useful life of seven years or
less.
Minority interest represents the minority shareholders'
proportionate share of the net income of the Company's
Japanese, Spanish and South African subsidiaries.
The effective tax rate decreased from 39.7% in 1993 to
38.0% in 1994 due to a change in the geographic mix of
worldwide income.
Year-to-year earnings per share comparisons benefited
from the share repurchase programs announced in July 1992
and July 1993. Weighted average common shares outstanding
for the quarter ended September 30, 1994 declined to 84.1
million shares, compared to 86.9 million shares for the
third quarter of 1993.
FIRST NINE MONTHS 1994 COMPARED TO FIRST NINE MONTHS 1993
Net sales for the nine months ended September 30, 1994
increased by $280.0 million, 12.2% over the level reported
for the first nine months of 1993. The Reebok Division's
worldwide sales were $2.211 billion, an increase of 12.0%
from $1.975 billion in 1993. The Reebok Division's U.S.
footwear sales increased 10.0% to $1.115 billion from $1.013
billion in 1993. This increase is attributed primarily to
increases in the outdoor, classics, Preseason and walking
categories, which were partially offset by decreases in the
children's and basketball categories. The Reebok Division's
U.S. apparel sales increased by 18.4% to $112.1 million from
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$94.7 million in 1993. The Reebok Division's International
sales (including both footwear and apparel) were $984.2
million in 1994, an increase of 13.5% from $867.0 million in
1993, primarily due to increased sales in all countries
except for France and the Netherlands.
Rockport sales increased by 13.8% to $240.1 million from
$210.9 million in 1993. This increase is due to an increase
in the number of pairs shipped. Avia sales increased by
13.9% to $119.9 million from $105.3 million in 1993. The
increase in Avia's sales is due to both increases in
domestic and international sales. The increase in Avia's
U.S. sales is due to increases in the walking and cross
training categories.
Other income increased in the third quarter due mainly to
increased income from partially-owned distributors recorded
in 1994's third quarter.
The decrease in gross margin from 40.4% in 1993 to 39.7%
in 1994 is due to lower margins in the Reebok Division's
International business. The decrease was partially offset
by slightly increased margins in the Reebok Division's U.S.
footwear business.
Selling, general and administrative expenses increased as
a percentage of sales from 26.3% in 1993 to 26.4% in 1994
partly due to the continuing increased investments in
information systems as well as higher distribution costs
mainly associated with the opening of a new apparel facility
in Memphis, Tennessee. The increased investments in
information systems are expected to continue over the next
few years.
Net income in 1994 was higher than net income in 1993
partially as a result of an additional pre-tax special
charge of $8.5 million related to the completion of the
sales of Boston Whaler and Ellesse, which were completed
during the third quarter of 1993. This special charge was in
addition to charges previously recorded in December 1992,
when the Company announced its intention to sell these
businesses.
Amortization of intangibles decreased due to the fact
that many of the intangibles acquired upon the acquisition
of Rockport in 1986 had a useful life of seven years or
less.
Minority interest represents the minority
shareholders' proportionate share of the net income of the
Company's Japanese, Spanish and South African subsidiaries.
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The effective tax rate decreased from 39.2% in 1993 to 38.0%
in 1994 due to a change in the geographic mix of worldwide
income.
Year-to-year earnings per share comparisons benefited
from the share repurchase programs announced in July 1992
and July 1993. Weighted average common shares outstanding
for the nine months ended September 30, 1994 declined to
84.6 million shares, compared to 89.1 million shares for the
first nine months of 1993.
LIQUIDITY AND SOURCES OF CAPITAL
The Company's financial position remains strong. Working
capital increased by $95.6 million, or 13.0% from the same
period a year ago. The current ratio at September 30,
1994 was 2.6 to 1, as compared to 2.8 to 1 at December 31,
1993 and 2.6 to 1 at September 30, 1993.
Accounts receivable increased from September 30, 1993 by
$89.4 million, or 16.1%, which is in line with the sales
increase for the third quarter of 1994. Inventory increased
by $85.0 million from September 30, 1993, reflecting
increases in all divisions, largely due to increased order
levels.
On November 1, 1994, the Company replaced its existing $175
million credit agreement with a $200 million credit agreement
which expires on October 31, 1995 and a $100 million loan
agreement which expires on October 31, 1999.
During the twelve months ended September 30, 1994, cash and
cash equivalents decreased by $26.1 million, and outstanding
borrowings increased by $37.4 million, while $131.8 million of
common stock was repurchased. Cash generated from operations
during 1994's first nine months was $118.6 million. Cash
generated from operations, together with the Company's
presently available financing sources, is expected to
adequately finance the Company's current and planned cash
requirements, including the remaining $247.8 million in share
repurchases authorized by the Board of Directors. This
includes the authorization by the Board of Directors on
October 4, 1994 of the repurchase of an additional $200
million in Reebok common stock. By September 30, 1994, the
Company had repurchased 11,195,700 shares at an average price
of $31.46 since the share repurchase programs began in July
1992.
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Reference is made to Item 3. Legal Proceedings in the
Company's Annual Report on Form 10-K, dated February 15, 1994
for a description of Byron A. Donzis v. Reebok International
Ltd. et al., Stutz Motor Car of America, Inc. v. Reebok
International Ltd., and Marshall Verano v. Reebok International
Ltd.
Items 2 - 5
Not applicable
Item 6
(a) Exhibits:
10.1 $200,000,000 Credit Agreement and $100,000,000 Loan
Agreement, each dated as of November 1, 1994,
among the Company, the Lenders named therein and
Credit Suisse as Administrative Agent and
Arranger.
11. Statement Re Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K: There were no reports on Form 8-K
filed during the quarter ended September 30, 1994.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Dated: November 8, 1994
REEBOK INTERNATIONAL LTD.
BY: /s/ PAUL R. DUNCAN
_____________________________
Paul R. Duncan
Executive Vice President and
Chief Financial Officer
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$200,000,000
CREDIT AGREEMENT
dated as of November 1, 1994
among
REEBOK INTERNATIONAL LTD.
as Borrower
and
THE BANKS NAMED HEREIN
as Lenders
and
CREDIT SUISSE
as Administrative Agent
and as Arranger
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms ............................ 1
1.02 Computation of Time Periods ...................... 17
1.03 Accounting Terms ................................. 17
1.04 Construction ..................................... 17
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01 The Facility ..................................... 18
(a) Revolving Loans and Swing Line
Loans .............................. 18
(b) Bid Rate Loans ..................... 19
(c) Eurodollar Rate Loans .............. 23
(d) Authorized Persons ................. 23
(e) Notice Irrevocable ................. 23
(f) Funding ............................ 24
(g) Several Obligations ................ 24
(h) Use of Proceeds .................... 24
2.02 Interest ......................................... 25
(a) Base Rate Loans .................... 25
(b) Eurodollar Rate Loans .............. 25
(c) Bid Rate Loans ..................... 25
(d) Default Interest ................... 25
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Section Page
2.03 Conversion of Loans; Continuation of Eurodollar
Rate Loans ....................................... 26
(a) Optional Conversion;
Continuation ....................... 26
(b) Mandatory Conversion ............... 27
2.04 Fees ............................................. 27
(a) Facility Fee ....................... 27
(b) Administrative Agent's Fees ........ 28
(c) Payment; Fees Fully Earned ......... 28
2.05 Reduction of the Commitments; Prepayment and
Repayment ........................................ 28
(a) Optional Facility Reduction ........ 28
(b) Facility Termination ............... 29
(c) Optional Prepayment ................ 29
(d) Mandatory Prepayment ............... 29
(e) Repayment .......................... 29
2.06 Increased Costs, Etc. ............................ 30
(a) Increased Cost ..................... 30
(b) Capital ............................ 31
(c) Unavailability or Inadequacy of
Eurodollar Rate .................... 32
(d) Illegality ......................... 32
2.07 Taxes ............................................ 33
(a) No Withholding ..................... 33
(b) Other Taxes ........................ 34
(c) Indemnity .......................... 34
(d) Evidence of Payment ................ 35
(e) Change of Lending Office ......... 35
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Section Page
(f) Survival of Covenant ............... 35
2.08 Replacement of Lender in Event of Adverse
Condition ........................................ 35
2.09 Payments ......................................... 36
(a) Time for Payment ................... 36
(b) Computation ........................ 36
(c) Distribution of Payments ........... 37
(d) Interest on Overdue Payment ........ 37
2.10 Sharing of Payments, Etc. ........................ 37
2.11 Compensation for Funding Losses .................. 38
2.12 Pro Rata Treatment ............................... 38
2.13 Evidence of Debt ................................. 39
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial Borrowing ........ 39
3.02 Conditions Precedent to Each Borrowing ........... 42
3.03 Determinations Under Section 3.01 ................ 43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the Borrower ... 43
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants ............................ 48
(a) Compliance with Laws, Etc. ......... 48
(b) Payment of Taxes, Etc. ............. 48
(c) Maintenance of Insurance ........... 48
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Section Page
(d) Preservation of Corporate
Existence, Etc. .................... 48
(e) Visitation Rights .................. 49
(f) Keeping of Books ................... 49
(g) Maintenance of Properties,
Etc. ............................... 49
(h) Transactions with Affiliates ....... 49
(i) Maintenance of Consolidated Net
Worth .............................. 49
(j) Maintenance of Leverage Ratio ...... 49
(k) Maintenance of Interest
Coverage Ratio ..................... 49
(l) Reporting Requirements ............. 50
5.02 Negative Covenants ............................... 52
(a) Liens, Etc. ........................ 53
(b) Mergers, Etc. ...................... 53
(c) Sales, Etc. of Assets .............. 53
(d) Change in Nature of Business ....... 54
(e) Compliance with ERISA .............. 55
(f) Accounting Changes ................. 55
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default ................................ 55
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.01 Authorization and Action ......................... 59
7.02 Administrative Agent's Reliance, Etc. ............ 59
7.03 Credit Suisse and Affiliates ..................... 60
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Section Page
7.04 Lender Credit Decision ........................... 60
7.05 Indemnification .................................. 60
7.06 Successor Administrative Agent ................... 61
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc. ................................. 62
8.02 Notices, Etc. .................................... 62
8.03 No Waiver; Remedies .............................. 63
8.04 Costs and Expenses ............................... 63
8.05 Right of Set-off ................................. 64
8.06 Binding Effect ................................... 65
8.07 Assignments and Participations ................... 65
8.08 Confidentiality .................................. 68
8.09 Governing Law; Submission to Jurisdiction ........ 69
8.10 Execution in Counterparts ........................ 70
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List of Schedules
Schedule I -- Domestic and Eurodollar
Lending Offices of Lenders;
Commitments
Schedule 4.01(b) -- Subsidiaries of the
Borrower
Schedule 4.01(h) -- Pending or Threatened
Litigation
Schedule 5.02(a) -- Existing Liens
List of Exhibits
Exhibit A -- Form of Assignment and
Acceptance
Exhibit B-1 -- Form of Notice of Borrowing
of Revolving Loans or Swing
Line Loans
Exhibit B-2 -- Form of Notice of Bid Rate
Borrowing
Exhibit C -- Form of Opinion of Ropes &
Gray, counsel to the
Borrower
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 1, 1994 (as
amended, supplemented or modified from time to time, this
"Agreement") among REEBOK INTERNATIONAL LTD., a
Massachusetts corporation (the "Borrower"), the banks and
financial institutions listed on the signature pages hereof
and any Additional Lender Agreement (as hereinafter defined)
(together with their respective permitted assignees, the
"Lenders"), and CREDIT SUISSE, a bank organized under the
laws of Switzerland ("Credit Suisse"), as Administrative
Agent for the Lenders (in such capacity, together with any
successor appointed pursuant to Article VII, the
"Administrative Agent"), and CREDIT SUISSE, as Arranger
("Arranger").
R E C I T A L S
WHEREAS, the Borrower has requested that the
Lenders make available to the Borrower revolving credit
loans in an aggregate principal amount not to exceed
$200,000,000 at any time outstanding to be used for general
corporate purposes of the Borrower and to provide working
capital for the Borrower, and the Lenders have agreed to
make such loans upon the terms and subject to the conditions
set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants and agreements contained herein,
the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in
this Agreement, each of the following terms shall have the
meaning ascribed thereto below (such meaning to be
applicable to both the singular and plural forms of the term
defined):
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"Affiliate" means, as to any Person, any other
Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person or is a
director or officer of such Person. For purposes of this
definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power (whether or not exercised) to vote 5% or more
of the securities having ordinary voting power for the
election of directors of such Person or to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by
contract or otherwise.
"Administrative Agent" has the meaning specified
in the preamble to this Agreement.
"Administrative Agent's Account" means the account
of the Administrative Agent maintained by the Administrative
Agent at its office at One Liberty Plaza, 165 Broadway, New
York, New York 10006, Account No. 904996602, Attention:
Loan Department/Ref.: Reebok.
"Administrative Agent's Fee" has the meaning
specified in Section 2.04(b).
"Agreement" has the meaning specified in the
preamble hereto.
"Applicable Lending Office" means, with respect to
each Lender, such Lender's Domestic Lending Office in the
case of a Base Rate Loan and such Lender's Eurodollar
Lending Office in the case of a Eurodollar Rate Loan (and
the office specified in writing by such Lender in the case
of a Bid Rate Loan).
"Applicable Margin" means (i) 0.26% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least AA- by S&P and Aa3 by Moody's, (ii) 0.30% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least A- by S&P and A3 by Moody's, (iii) 0.335% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least BBB+ by S&P and Baa1 by Moody's, (iv) 0.40% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least BBB- by S&P and Baa3 by Moody's and (v) 0.675% at any
other time (including, without limitation, any time that
there shall be Senior Unsecured Debt of the Borrower
outstanding and not rated by both S&P and Moody's); provided
that if there shall be no Senior Unsecured Debt of the
Borrower outstanding at any time, the Applicable Margin
shall be determined by reference to the most recent
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previously existing ratings of Senior Unsecured Debt of the
Borrower.
"Arranger" has the meaning specified in the
preamble to this Agreement.
"Assignment and Acceptance" means an assignment
and acceptance made by a Lender and an assignee of such
Lender, and accepted by the Administrative Agent, in
substantially the form of Exhibit A hereto.
"Base Rate" means, on any date, a rate equal to
the higher of (a) the Federal Funds Rate plus one-half of
one percent (0.50%) per annum or (b) the rate of interest
per annum from time to time announced by the Administrative
Agent as its base lending rate for commercial loans made in
the United States, each as in effect on such date. The base
lending rate is not necessarily the lowest rate of interest
charged by the Administrative Agent in connection with
extensions of credit.
"Base Rate Loan" means a Loan that bears interest
as provided in Section 2.02(a).
"Bid Rate Borrowing" means a borrowing consisting
of Bid Rate Loans made on the same day pursuant to the same
Notice of Bid Rate Borrowing by each of the Lenders whose
offer to make one or more Bid Rate Loans as part of such
borrowing has been accepted by the Borrower under the
auction bidding procedure described in Section 2.01(b).
"Bid Rate Loan" means a loan by a Lender to the
Borrower resulting from the auction bidding procedure
described in Section 2.01(b).
"Board of Directors" of any corporation means the
Board of Directors of such corporation or a duly constituted
committee thereof having authority over matters to which the
action proposed to be taken or authorized relates.
"Borrower" has the meaning specified in the
preamble to this Agreement.
"Borrower's Account" means the account of the
Borrower maintained by the Borrower with Credit Suisse at
its office at One Liberty Plaza, 165 Broadway, New York, New
York 10006 Account No. 32878201.
"Borrowing" means a borrowing consisting of Loans
of the same Type having, in the case of Eurodollar Rate
Loans, the same Interest Period or Loans Continued as or
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Converted into Eurodollar Rate Loans having the same
Interest Period, on the same day.
"Business Day" means a day of the year on which
banks are not required or authorized to close in New York
City and, if the applicable Business Day relates to the
making of, Continuation of or Conversion into Eurodollar
Rate Loans, a day on which dealings also are carried on in
the London interbank market for deposits in United States
dollars.
"Capitalized Lease" means any lease of (or other
agreement conveying the right to use) property, whether
real, personal or mixed, by a Person, as lessee or
guarantor, which would, in conformity with GAAP, be required
to be accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" means all
obligations under Capitalized Leases of a Person that would,
in conformity with GAAP, be classified as liabilities on a
balance sheet of that Person.
"Closing Date" means November 1, 1994.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commitment" means, in the case of Revolving Loans
and Swing Line Loans, with respect to each Lender that is
signatory hereto, the amount set forth opposite such
Lender's name on Schedule I or, if such Lender has entered
into one or more Assignments and Acceptances, and with
respect to each other Lender, the amount set forth for such
Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as such Lender's
"Commitment", in each case as the same may be reduced
pursuant to Section 2.05.
"Commitment Termination Date" has the meaning
specified in Section 2.05(b).
"Confidential Information" means any non-public
information about the Borrower and/or any of its
Subsidiaries furnished by the Borrower and/or any of its
Subsidiaries to any Lender, other than any information which
(i) was publicly known or otherwise known to any such Lender
at the time of disclosure, (ii) subsequently becomes
publicly known through no act or omission of any such
Lender, or (iii) becomes known to any Lender otherwise than
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through disclosure by the Borrower and/or any of its
Subsidiaries to such Lender.
"Consolidated Current Assets" means, on any date
of determination thereof, all assets of the Borrower and its
Subsidiaries, on a consolidated basis, that, in accordance
with GAAP, are required to be classified as current assets
on such date, after deducting adequate reserves in each case
in which a reserve is proper in accordance with GAAP.
"Consolidated Current Liabilities" means, on any
date of determination thereof, all items that, in accordance
with GAAP, are required to be classified as current
liabilities of the Borrower and its Subsidiaries, on a
consolidated basis, on such date, including, without
limitation, the current portion of long-term Debt.
"Consolidated Interest Expense" means, for any
fiscal period of the Borrower, consolidated interest expense
of the Borrower and its Subsidiaries, including the portion
of Capitalized Leases attributable to interest in such
period, but without deduction or allowance for interest
income.
"Consolidated Net Income" means, for any fiscal
period of the Borrower, the consolidated net income (or
loss) of the Borrower and its Subsidiaries for such period
taken as a single accounting period determined in conformity
with GAAP, provided that there shall be excluded therefrom
(i) the income (or loss) of any Person (other than
Subsidiaries of the Borrower) in which any other Person
(other than the Borrower or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the
Borrower or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of or is merged
into or consolidated with the Borrower or any of its
Subsidiaries or that Person's assets are acquired by the
Borrower or its Subsidiaries and (iii) the income of any
Subsidiary of the Borrower to the extent that the
declaration or payment of dividends or similar distributions
by that Subsidiary is not at the time permitted by operation
of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
"Consolidated Net Worth" means, on any date of
determination thereof, the excess of Consolidated Total
Assets over Consolidated Total Liabilities, provided that
there shall be deducted therefrom, with respect to each
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Subsidiary that is not wholly-owned, directly or indirectly,
by the Borrower, an amount (if greater than zero) equal to
the product of (a) stockholders' equity of such Subsidiary
determined in conformity with GAAP multiplied by (b) the
percentage of common equity or its equivalent of such
Subsidiary not owned by the Borrower or another Subsidiary
of the Borrower, expressed as a decimal.
"Consolidated Total Assets" means, on any date of
determination thereof, total assets of the Borrower and its
Subsidiaries, determined in conformity with GAAP.
"Consolidated Total Liabilities" means, on any
date of determination thereof, total liabilities of the
Borrower and its Subsidiaries, determined in conformity with
GAAP, including without limitation, Debt, trade payables,
accrued liabilities and contingent liabilities, to the
extent required to be reflected as liabilities on a
consolidated balance sheet of the Borrower and its
Subsidiaries prepared in conformity with GAAP.
"Contingent Obligation" means, as to any Person,
any obligation, direct or indirect, contingent or otherwise,
of such Person (i) with respect to any Debt or other
obligation or liability of another Person, including without
limitation any direct or indirect guaranty of such Debt,
obligation or liability, endorsement (other than for
collection or deposit in the ordinary course of business)
thereof or discount or sale thereof by such Person with
recourse to such Person, or any other direct or indirect
obligation, by agreement or otherwise, to purchase or
repurchase any such Debt, obligation or liability or any
security therefor, or to provide funds for the payment or
discharge of any such Debt, obligation or liability (whether
in the form of loans, advances, stock purchases, capital
contributions or otherwise), (ii) to provide funds to
maintain working capital or equity capital of another Person
or otherwise to maintain the net worth, solvency or
financial condition of such other Person, (iii) to make
payment for any products, property, securities or services
regardless of delivery or non-delivery thereof, if the
purpose of any such agreement so to do is to provide
assurance that another Person's Debt, obligation or
liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders
of another Person's Debt, obligation or liability will be
protected (in whole or in part) against loss in respect
thereof, or (iv) otherwise to assure or hold harmless the
holders of Debt or other obligation or liability of another
Person against loss in respect thereof; provided, however,
that any guaranty or agreement in the nature of guaranty
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made by the Borrower in respect of obligations of a
Subsidiary of the Borrower under or in respect of a trade
letter of credit shall constitute a Contingent Obligation
only if and to the extent that (i) such obligations
constitute Debt of such Subsidiary or (ii) the Borrower's
obligations in respect of such guaranty are required to be
reflected as liabilities on a consolidated balance sheet of
the Borrower and its Subsidiaries prepared in accordance
with GAAP. The amount of any Contingent Obligation shall be
an amount equal to the amount of the Debt, obligation or
liability guaranteed or otherwise supported thereby, without
regard to any right of reimbursement, contribution or
indemnity.
"Continuation" or "Continue" each refers to the
continuation, upon expiration of an Interest Period with
respect thereto, of Eurodollar Rate Loans constituting part
of the same Borrowing as Eurodollar Rate Loans for a
successive Interest Period pursuant to Section 2.03.
"Conversion", "Convert" and "Converted" each
refers to a conversion of Loans of one Type into Loans of
the other Type pursuant to Section 2.03.
"Debt" of any Person means, without duplication,
(i) all obligations of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all
obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
and trade letters of credit (other than such letters of
credit included in "Debt" by operation of clause (vi)
hereof), and other similar accrued current liabilities in
respect of such obligations, arising in the ordinary course
of business; (iv) all Capitalized Lease Obligations of such
Person; (v) all obligations or liabilities of others secured
by a lien on any asset owned by such Person, whether or not
such obligation or liability is assumed by such Person;
(vi) all obligations of such Person, contingent or
otherwise, in respect of letters of credit or bankers'
acceptances to the extent that such obligations are required
to be reflected as liabilities on a consolidated balance
sheet of such Person prepared in accordance with GAAP, and
(vii) all Contingent Obligations reflected in footnotes to
the financial statements of such Person.
"Default" means any Event of Default or any event
that would, with the giving of notice or the lapse of time
or both, constitute an Event of Default.
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"Domestic Lending Office" means, with respect to
any Lender, the office of such Lender specified as its
"Domestic Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance or Additional
Lender Agreement pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative
Agent.
"EBIT" means, for any fiscal period of the
Borrower, Consolidated Net Income for such period plus the
sum of (a) Consolidated Interest Expense for such period,
(b) income tax expense of the Borrower and its Subsidiaries
for such period, (c) net extraordinary losses (added as a
positive number) included in such Consolidated Net Income,
and (d) other net losses (added as a positive number)
incurred in such period by the Borrower or any of its
Subsidiaries on the sale of assets other than asset sales in
the ordinary course of business, less the sum of (x) net
extraordinary gains included in Consolidated Net Income,
(y) net gains realized in such period by the Borrower or any
of its Subsidiaries on the sale of assets other than asset
sales in the ordinary course of business, and
(z) extraordinary non-cash credits included in determining
Consolidated Net Income.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for
purposes of Title IV of ERISA is a member of the Borrower's
controlled group, or under common control with the Borrower,
within the meaning of Section 414 of the Code and the
regulations promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day
notice requirement with respect thereto has been waived by
the PBGC; (b) the provision by the administrator of any Plan
of a notice of intent to terminate such Plan in a "distress
termination", pursuant to Section 4041 of ERISA; (c) the
cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by
the Borrower or an ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e) the
failure by the Borrower or any ERISA Affiliate to make a
required payment to a plan which gives rise to liability
under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan requiring the provision of security to
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such Plan, pursuant to Section 307 of ERISA; (g) the
institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition that would constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan; or (h) the
failure to maintain the minimum funding standard required by
Section 412 of the Code with respect to any Plan for a plan
year, or the request or grant of a request for a waiver of
such standard under Section 412(d) of the Code with respect
to any Plan for a plan year.
"Eurocurrency Liabilities" has the meaning
assigned to that term in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to
any Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance or Additional
Lender Agreement pursuant to which it became a Lender (or,
if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period
for Eurodollar Rate Loans comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate of interest
determined by the Administrative Agent to be the arithmetic
average (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in United
States dollars are offered by the principal office of any
three (3) of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 a.m. (London
time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Loan comprising part of
such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period, by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period. The Eurodollar Rate
for each Interest Period for each Eurodollar Rate Loan
comprising part of the same Borrowing shall be determined by
the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from
the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions
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of Section 2.06. If three (3) Reference Banks shall be
unable or shall otherwise fail to provide notice of the
applicable rate as contemplated hereby, the Eurodollar Rate
shall be determined on the basis of the rate or rates
provided by the remaining Reference Bank or Reference Banks.
"Eurodollar Rate Loan" means a Loan that bears
interest as provided in Section 2.02(b).
"Eurodollar Rate Reserve Percentage" for any
Interest Period, with respect to each Eurodollar Rate Loan
comprising part of the same Borrowing, means the reserve
percentage (if any) applicable two Business Days before the
first day of such Interest Period under regulations issued
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes
deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined) having a term equal to
such Interest Period.
"Event of Default" has the meaning specified in
Section 6.01.
"Facility" means the aggregate amount of the
Lenders' Commitments as in effect from time to time.
"Facility Fee" has the meaning specified in
Section 2.04(a).
"Federal Funds Rate" means, on any day, the
arithmetic average of the rates quoted to the Administrative
Agent as the prevailing rate per annum (rounded upward to
the nearest whole multiple of 1/100 of 1%, if such average
is not such a multiple) bid at approximately 11:00 a.m. New
York time (or as soon thereafter as is practicable) on such
day by two or more New York Federal Funds dealers of
recognized standing, selected by the Administrative Agent,
for the purchase at face value of Federal Funds in the
secondary market with a maturity of one day.
"Fees" means, collectively, the Administrative
Agent's Fee and the Facility Fee and all other fees payable
to the Administrative Agent or the Arranger pursuant to
written agreement between the Borrower and the
Administrative Agent or the Arranger.
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"Fireman Group" has the meaning specified in
Section 6.01(h).
"GAAP" means generally accepted accounting
principles in the United States of America as in effect as
of the date of, and used in, the preparation of the audited
consolidated financial statements referred to in
Section 4.01(f), except that, with respect to the
preparation of any financial statement required to be
furnished pursuant to clause (ii) or (iii) of
Section 5.01(l), "GAAP" shall mean such principles in the
United States of America as in effect from time to time.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Initial Date" has the meaning specified in
Section 2.07(a).
"Insufficiency" means, with respect to any Plan,
the amount, if any, of its unfunded benefit liabilities
within the meaning of Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, for any period,
the ratio of (i) EBIT to (ii) Consolidated Interest Expense.
"Interest Period" means, for all Eurodollar Rate
Loans that are part of the same Borrowing, the period
commencing on the date of the making of such Eurodollar Rate
Loans or the date of the Conversion of Base Rate Loans into
such Eurodollar Rate Loans, and ending on the last day of
the period selected by the Borrower pursuant to the
provisions hereof and, thereafter upon Continuation of such
Eurodollar Rate Loans, each subsequent period commencing on
the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the
Borrower pursuant to the provisions hereof. The duration of
each Interest Period shall be one (1), two (2), three (3) or
six (6) months (or any other interest period if available
and agreed upon by the Borrower and the Administrative
Agent, but such interest period shall in no event extend
past the Commitment Termination Date) as the Borrower may,
upon notice received by the Administrative Agent not later
than 11:00 a.m. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) the Borrower may not select any Interest
Period that ends after the Commitment Termination
Date;
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(b) no more than fifteen (15) different
Interest Periods may be in effect at any one time;
(c) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such
extension would cause the last day of such
Interest Period to occur in the next succeeding
calendar month, the last day of such Interest
Period shall occur on the next preceding Business
Day; and
(d) whenever the first day of any Interest
Period occurs on a day in a calendar month for
which there is no numerically corresponding day in
the calendar month that succeeds such initial
calendar month by the number of months equal to
the number of months in such Interest Period, such
Interest Period shall end on the last Business Day
of such succeeding calendar month.
"Lenders" has the meaning specified in the
preamble to this Agreement.
"Leverage Ratio" means, on any date of
determination thereof, the ratio of (i) the aggregate
outstanding amount of Debt of the Borrower and its
Subsidiaries to (ii) Total Capitalization.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor and
any easement, right of way or other encumbrance on title to
real property.
"Loan" means a Revolving Loan, a Swing Line Loan
or a Bid Rate Loan.
"Margin Regulations" means Regulations G, T, U and
X of the Board of Governors of the Federal Reserve System
and any successor regulations thereto, as in effect from
time to time.
"Margin Stock" means "margin stock" as defined in
Regulation U.
"Moody's" means Moody's Investors Service, Inc.
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"Multiemployer Plan" means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA and subject to
Title IV thereof, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions,
such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA and subject
to Title IV thereof, that (a) is maintained by the Borrower
or an ERISA Affiliate and at least one Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained
previously, but is not currently maintained by the Borrower
or its ERISA Affiliates, and in respect of which the
Borrower or an ERISA Affiliate would still have liability
under Section 4064 or 4069 of ERISA in the event such plan
has been or were to be terminated.
"Notice of Bid Rate Borrowing" has the meaning
specified in Section 2.01(b).
"Notice of Borrowing of Revolving Loans or Swing
Line Loans" has the meaning specified in Section 2.01(a).
"Obligations" means all obligations of the
Borrower under or in respect of this Agreement, including,
without limitation, payment of principal, interest, Fees,
charges, expenses, attorneys' fees and disbursements,
indemnities and any other amounts payable by the Borrower
hereunder.
"Other Taxes" has the meaning specified in
Section 2.07(b).
"Parent" of any Person means any corporation,
partnership, joint venture, trust or estate as to which such
Person is a Subsidiary.
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor agency or entity performing
substantially the same functions.
"Permitted Liens" means (a) Liens for taxes,
assessments and governmental charges or levies to the extent
not required to be paid under Section 5.01(b) hereof;
(b) Liens arising by operation of law, such as
materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens, in each case
arising in the ordinary course of business securing
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obligations that are not overdue or which are being
contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained; (c) pledges
or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public
or statutory obligations; (d) easements, rights of way and
other encumbrances on title to real property that do not
render title to the property encumbered thereby unmarketable
or materially adversely affect the use of such property for
its present purposes; (e) deposits to secure the performance
of bids, trade contracts (other than for Debt), leases,
statutory obligations, surety and appeal bonds, performance
bonds and other obligations of like nature incurred in the
ordinary course of business; (f) Liens securing Debt
incurred to purchase, or finance the purchase of, property
or assets of the Borrower or any of its Subsidiaries,
provided that any such Lien is limited to the property or
assets acquired or financed and any subsequent improvements
thereto; (g) Liens on the Borrower's warehouse, distribution
and retail facilities located in Stoughton, Avon, and
Lancaster, Massachusetts; (h) other Liens securing Debt in a
principal amount that, at the time incurred, does not exceed
(together with the aggregate principal amount of any other
Debt secured by Liens permitted pursuant to this clause (h)
then outstanding) 5% of Consolidated Net Worth; and
(i) other Liens incidental to the conduct of the business of
the Borrower and its Subsidiaries or the ownership of any of
their respective assets and not incurred to secure Debt,
which Liens do not in any case materially detract from the
value of the property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of
its Subsidiaries; provided that no such Lien shall encumber
any capital stock of any Subsidiary of the Borrower other
than, to the extent such Liens arise by operation of law,
Liens described in clause (a) hereof.
"Person" means an individual, partnership,
corporation, joint stock company, trust (including a
business trust), unincorporated association, joint venture
or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pro Rata Share" means, as to any Lender, such
Lender's Commitment, expressed as a percentage of the
Facility, both as in effect from time to time.
"RBK Holdings" means RBK Holdings plc, a wholly-
owned subsidiary of the Borrower.
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"Reference Banks" means Credit Suisse, Citibank,
N.A., ABN AMRO Bank N.V., CIBC, Inc. and The First National
Bank of Boston.
"Register" has the meaning specified in
Section 8.07(c).
"Replacement Lender" has the meaning specified in
Section 2.08.
"Required Lenders" means at any time Lenders
(other than Affiliates of the Borrower) holding in excess of
50% of the Commitments (other than Commitments of Lenders
that are Affiliates of the Borrower) then in effect.
"Revolving Loan" has the meaning specified in
Section 2.01(a).
"S&P" means Standard & Poor's Corporation.
"Senior Unsecured Debt" means unsecured,
unenhanced, unsubordinated Debt of the Borrower from time to
time outstanding, having an original stated maturity of more
than one year from the date of issuance.
"Single Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA and subject
to Title IV thereof, that (a) is maintained by the Borrower
or an ERISA Affiliate and no Person other than the Borrower
and its ERISA Affiliates or (b) was so maintained
previously, but is not currently maintained by the Borrower
or its ERISA Affiliates, and in respect of which the
Borrower or an ERISA Affiliate would still have liability
under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the
total amount of liabilities, including, without limitation,
the reasonably expected amount of such Person's obligations
with respect to contingent liabilities, (b) the present fair
salable value of the assets of such Person is not less than
the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to
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engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
"Stock Repurchase" means any repurchase of capital
stock of the Borrower or any warrants, rights or options to
acquire such capital stock made by the Borrower or any of
its Subsidiaries after the Closing Date, provided that any
such capital stock, warrants, rights or options so
repurchased shall immediately be cancelled (and may in
accordance with applicable law be returned to the status of
authorized and unissued capital stock of the Borrower) and
in no event shall any capital stock be held as treasury
stock; provided further however that the foregoing proviso
shall not apply with respect to shares of capital stock of
the Borrower having a value not in excess of 9,264,000
British Pounds that may be purchased by RBK Holdings
pursuant to Schedule VI of the share purchase agreement
dated 8 March 1991 between the Borrower and Pentland Group
plc.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of:
(a) the outstanding capital stock having
Voting Power to elect a majority of the Board of
Directors of such corporation (irrespective of
whether at the time capital stock of any other
class or classes of such corporation shall or
might have Voting Power upon the occurrence of any
contingency),
(b) the interest in the capital or profits
of such partnership or joint venture, or
(c) the beneficial interest of such trust or
estate,
is at the time directly or indirectly owned by such Person,
by such Person and one or more of its Subsidiaries or by one
or more of such Person's Subsidiaries.
"Swing Line Loan" has the meaning specified in
Section 2.01(a).
"Taxes" has the meaning specified in
Section 2.07(a).
"Total Capitalization" means, on any date of
determination thereof, the sum of (i) the aggregate
outstanding amount of Debt of the Borrower and its
Subsidiaries and (ii) the consolidated stockholders' equity
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of the Borrower and its Subsidiaries determined in
conformity with GAAP.
"Type" refers to the distinction between Revolving
Loans, Swing Line Loans and Bid Rate Loans.
"Voting Power" means, with respect to securities
issued by any Person, the combined voting power of all
securities of such Person which are issued and outstanding
at the time of determination and which are entitled to vote
in the election of directors of such Person, other than
securities having such power only by reason of the happening
of a contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA.
"Withdrawal Liability" has the meaning given such
term under Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In
this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting
terms not specifically defined herein shall be construed in
accordance with GAAP.
SECTION 1.04. Construction. References herein
to the plural form include the singular, and the singular
include the plural; the word "including" is not limiting;
and the word "or" is not exclusive. The words "hereof",
"herein", "hereby" and "hereunder" refer to this Agreement
as a whole and not to any particular provision of this
Agreement. Article, section, exhibit and schedule
references are to articles and sections of, and exhibits and
schedules to, this Agreement, unless otherwise expressly
indicated.
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ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Facility.
(a) Revolving Loans and Swing Line Loans. Each
Lender severally agrees, upon the terms and subject to the
conditions herein set forth, to make revolving loans (each a
"Revolving Loan") and swing line loans (each a "Swing Line
Loan") to the Borrower from time to time on any Business Day
during the period from the Closing Date until the Business
Day next preceding the Commitment Termination Date, each
such Loan to be in an amount that does not exceed such
Lender's Pro Rata Share of the Borrowing of which such Loan
is a part and that, together with the principal amount then
outstanding of all other Revolving Loans and Swing Line
Loans made by such Lender, does not exceed such Lender's
Commitment in effect at the time such Loan is made. The
aggregate principal amount outstanding of all Loans shall in
no event, at any time, exceed the then-effective Facility.
Revolving Loans shall be Eurodollar Rate Loans and Swing
Line Loans shall be Base Rate Loans.
(i) Each Borrowing of Revolving Loans or
Swing Line Loans shall be in an aggregate amount not less
than $10,000,000 and in integral multiples of $1,000,000 in
excess thereof, and shall consist of Loans of the same Type
made on the same day by the Lenders ratably according to
their respective Commitments. Within the limits of the
Facility and each Lender's Commitment, and subject to the
limits referred to above, the Borrower may borrow under this
Section 2.01(a), prepay pursuant to Section 2.05(c) and
reborrow under this Section 2.01(a).
(ii) Each Borrowing pursuant to this
Section 2.01(a) shall be made pursuant to notice, given not
later than 10:00 a.m. (New York City time) (A) in the case
of a Borrowing comprised of Revolving Loans, on the third
Business Day prior to the date of the proposed Borrowing,
and (B) in the case of a Borrowing comprised of Swing Line
Loans, on the Business Day on which the proposed Borrowing
is to be made, in either case given by the Borrower to the
Administrative Agent. The Administrative Agent shall give
to each Lender notice of receipt of a Notice of Borrowing of
Revolving Loans or Swing Line Loans promptly and, in any
event, no later than 12:00 noon (New York City time) in the
case of a Swing Line Loan and 3:00 p.m. (New York City time)
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in the case of a Revolving Loan on the date on which it is
received.
(iii) Each notice of a Borrowing of
Revolving Loans or Swing Line Loans pursuant to this Section
2.01(a) (a "Notice of Borrowing of Revolving Loans or Swing
Line Loans") shall be in substantially the form of Exhibit
B-1 hereto, specifying therein (A) the date of such
Borrowing, (B) the Type of Loans comprising such Borrowing,
(C) the aggregate amount of such Borrowing, and (D) in the
case of a Borrowing comprised of Revolving Loans, the
initial Interest Period for such Borrowing. In the case of
a proposed Borrowing comprised of Revolving Loans, the
Administrative Agent shall promptly notify each Lender of
the applicable interest rate under Section 2.02(b). Each
Lender shall, before 2:00 p.m. (New York City time) on the
date of each Borrowing, make available to the Administrative
Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of the Borrowing made
on such date. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make
such funds available to the Borrower by crediting the
Borrower's Account.
(b) Bid Rate Loans. Each Lender severally agrees
that the Borrower may make Bid Rate Borrowings pursuant to
this Section 2.01(b) from time to time on any Business Day
during the period from the date hereof until the Commitment
Termination Date in the manner set forth below; provided
that, following the making of each Bid Rate Borrowing, the
aggregate principal amount of all Loans then outstanding
shall not exceed the then-effective Facility.
(i) The Borrower may request a Bid Rate
Borrowing pursuant to this Section 2.01(b) by delivering to
the Administrative Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a Bid Rate
Borrowing (a "Notice of Bid Rate Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying the
date and aggregate amount of the proposed Bid Rate
Borrowing, the maturity date for repayment of each Bid Rate
Loan to be made as part of such Bid Rate Borrowing (which
maturity date shall not be later than the Commitment
Termination Date), the interest payment date or dates
relating thereto, and any other terms to be applicable to
such Bid Rate Borrowing, not later than 9:30 a.m. (New York
City time) (A) at least one Business Day prior to the date
of the proposed Bid Rate Borrowing, if the Borrower shall
specify in the Notice of Bid Rate Borrowing that the rates
of interest to be offered by the Lenders shall be fixed
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rates per annum and (B) at least four Business Days prior to
the date of the proposed Bid Rate Borrowing, if the Borrower
shall instead specify in the Notice of Bid Rate Borrowing
that the Eurodollar Rate shall be used by the Lenders as a
basis for determining the rates of interest to be offered by
them. The Administrative Agent shall in turn promptly
notify each Lender of each request for a Bid Rate Borrowing
received by it from the Borrower by sending such Lender a
copy of the related Notice of Bid Rate Borrowing.
(ii) Each Lender may, if, in its sole
discretion, it elects to do so, irrevocably offer to make
one or more Bid Rate Loans to the Borrower as part of such
proposed Bid Rate Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by
notifying the Administrative Agent (which shall give prompt
notice thereof to the Borrower), before 9:30 a.m. (New York
City time) (A) on the date of such proposed Bid Rate
Borrowing, in the case of a Notice of Bid Rate Borrowing
delivered pursuant to clause (A) of paragraph (i) above and
(B) three Business Days before the date of such proposed Bid
Rate Borrowing, in the case of a Notice of Bid Rate
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, of the minimum amount and maximum amount of each Bid
Rate Loan which such Lender would be willing to make as part
of such proposed Bid Rate Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section
2.01(b), exceed such Lender's Commitment), the rate or rates
of interest therefor and such Lender's Applicable Lending
Office with respect to such Bid Rate Loan; provided that if
the Administrative Agent in its capacity as a Lender shall,
in its sole discretion, elect to make any such offer, it
shall notify the Borrower of such offer before 9:15 a.m.
(New York City time) on the date on which notice of such
election is to be given to the Administrative Agent by the
other Lenders.
(iii) The Borrower shall, in turn, (A)
before 10:30 a.m. (New York City time) on the date of such
proposed Bid Rate Borrowing, in the case of a Notice of Bid
Rate Borrowing delivered pursuant to clause (A) of paragraph
(i) above and (B) before 10:30 a.m. (New York City time)
three Business Days before the date of such proposed Bid
Rate Borrowing, in the case of a Notice of Bid Rate
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either:
(x) cancel such Notice of Bid Rate Borrowing
by giving the Administrative Agent notice to that
effect, or
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(y) accept one or more of the offers made by
any Lender or Lenders pursuant to paragraph (ii) above
(which acceptance shall be irrevocable) in its sole
discretion, by giving notice to the Administrative
Agent of the amount of each Bid Rate Loan (which amount
shall be equal to or greater than the minimum amount,
and equal to or less than the maximum amount, notified
to the Borrower by the Administrative Agent on behalf
of such Lender for such Bid Rate Loan pursuant to
paragraph (ii) above) to be made by each Lender as part
of such Bid Rate Borrowing (provided that the aggregate
amount of such Bid Rate Borrowing shall not exceed the
amount specified on the Notice of Bid Rate Borrowing
delivered by the Borrower pursuant to paragraph (i)
above), and reject any remaining offers made by Lenders
pursuant to paragraph (ii) above by giving the
Administrative Agent notice to that effect; provided
that acceptance of offers may only be made on the basis
of ascending rates for Bid Rate Borrowings of the same
type and duration for up to the maximum amounts offered
by Lenders; and provided further that if offers are
made by two or more Lenders for the same type of Bid
Rate Borrowing for the same duration and with the same
rate of interest, in an aggregate amount which is
greater than the amount requested, such offers shall be
accepted on a pro rata basis based on the maximum
amounts offered by such Lenders at such rate of
interest.
(iv) If the Borrower notifies the
Administrative Agent that such Bid Rate Borrowing is
cancelled pursuant to paragraph (iii)(x) above or if the
Borrower rejects any offers made by Lenders pursuant to
paragraph (iii)(y) above, such notification or rejection
shall be irrevocable.
(v) If the Borrower accepts one or more of
the offers made by any Lender or Lenders pursuant to
paragraph (iii)(y) above, the Administrative Agent shall in
turn promptly notify (A) each Lender that has made an
accepted offer as described in paragraph (ii) above, of the
date and aggregate amount of such Bid Rate Borrowing and
that any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower,
(B) each Lender that is to make a Bid Rate Loan as part of
such Bid Rate Borrowing, of the amount of each Bid Rate Loan
to be made by such Lender as part of such Bid Rate
Borrowing, and (C) each Lender that is to make a Bid Rate
Loan as part of such Bid Rate Borrowing, upon receipt, that
the Administrative Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in
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Article III. Each Lender that is to make a Bid Rate Loan as
part of such Bid Rate Borrowing shall, before 1:00 P.M. (New
York City time) on the date of such Bid Rate Borrowing
specified in the notice received from the Administrative
Agent pursuant to clause (A) of the preceding sentence or
any later time when such Lender shall have received notice
from the Administrative Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02 such Lender's portion of
such Bid Rate Borrowing, in same day funds. Upon
fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's
aforesaid address. Promptly after each Bid Rate Borrowing,
the Administrative Agent will notify each Lender of the
amount of the Bid Rate Borrowing and will also notify each
Lender that made an offer the range of rates offered and the
accepted rate (provided that such information shall not
include the name of any bank that made an offer if such
offer was accompanied by a written instruction to the
Administrative Agent not to disclose such Bank's name).
(vi) The Borrower agrees to pay to the
Administrative Agent for the Administrative Agent's account
an auction fee as agreed with the Administrative Agent for
each Notice of Bid Rate Borrowing delivered by the Borrower
to the Administrative Agent pursuant to this Section
2.01(b), whether or not a Bid Rate Borrowing is made
pursuant thereto.
(vii) Each Bid Rate Borrowing shall be in an
aggregate amount of not less than $10,000,000 and in integral
multiples of $1,000,000 in excess thereof.
(viii) Within the limits of the Facility, and on
the conditions set forth in this Section 2.01(b), the Borrower
may from time to time borrow under this Section 2.01(b), repay or
prepay pursuant to Section 2.05(c) or (d) below, and reborrow
under this Section 2.01(b).
(ix) The Borrower shall repay to the
Administrative Agent for the account of each Lender which has
made a Bid Rate Loan, on the maturity date of each Bid Rate Loan
(such maturity date being that specified by the Borrower for
repayment of such Bid Rate Loan in the related Notice of Bid Rate
Borrowing delivered pursuant to subsection (b)(i) above), the
then unpaid principal amount of such Bid Rate Loan.
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(x) The Borrower shall pay interest on the unpaid
principal amount of each Bid Rate Loan from the date of such Bid
Rate Loan to the date the principal amount of such Bid Rate Loan
is repaid in full, at the rate of interest for such Bid Rate
Loan specified by the Lender making such Bid Rate Loan in its
notice with respect thereto delivered pursuant to subsection
(b)(ii) above, payable on the interest payment date or dates
specified by the Borrower for such Bid Rate Loan in the related
Notice of Bid Rate Borrowing delivered pursuant to subsection
(b)(i) above.
(c) Eurodollar Rate Loans. Anything in
Section 2.01(a) to the contrary notwithstanding, the
Borrower may not select a Eurodollar Rate Loan if (i) the
aggregate amount of such Borrowing is less than $10,000,000,
(ii) the obligation of the Lenders to make Eurodollar Rate
Loans, or to Continue Loans as or Convert Loans into
Eurodollar Rate Loans, then is suspended pursuant to Section
2.06(c) or (d) or (iii) after giving effect to such
Borrowing, the aggregate number of different Interest
Periods for outstanding Eurodollar Rate Loans is greater
than fifteen (15).
(d) Authorized Persons. The Borrower shall
notify the Administrative Agent in writing of the names of
its officers and employees authorized to request Loans on
behalf of the Borrower and shall provide the Administrative
Agent with a specimen signature of each such officer or
employee. The Administrative Agent shall be entitled to
rely conclusively on such officer's or employee's authority
to request Loans on behalf of the Borrower until the
Administrative Agent receives written notice to the
contrary. The Administrative Agent shall have no duty to
verify the authenticity of the signature appearing on any
Notice of Borrowing.
(e) Notice Irrevocable. Each Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing relating to a Borrowing that is
to be comprised of Eurodollar Rate Loans, the Borrower shall
indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing for such Borrowing the
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applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Loan to be made by such
Lender as part of such Borrowing if such Loan, as a result
of such failure, is not made on such date.
(f) Funding. Unless the Administrative Agent
shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of
such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in
accordance with Section 2.01(b)(ii), and the Administrative
Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and
to the extent that such Lender shall not have so made such
ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to pay or repay to
the Administrative Agent, forthwith on demand, such
corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is paid or repaid to the
Administrative Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to Loans comprising
such Borrowing and (ii) in the case of such Lender, an
interest rate per annum equal to the Administrative Agent's
cost of funds advanced to the Borrower, as certified to such
Lender by the Administrative Agent. If such Lender shall
pay to the Administrative Agent such corresponding amount,
such amount so paid shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
(g) Several Obligations. Each Lender's
obligation to make Loans hereunder is several and not joint.
The failure of any Lender to make the Loan to be made by it
as part of any Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Loan on the
date of such Borrowing, but no Lender shall be responsible
for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(h) Use of Proceeds. The proceeds of the Loans
shall be used by the Borrower solely (i) to pay fees and
expenses incurred in connection herewith, (ii) to finance
its working capital requirements and (iii) for its general
corporate purposes, including without limitation the
refinancing of existing indebtedness. No part of the
proceeds of any Loan shall be used directly or indirectly
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for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any Margin Stock, or maintaining
or extending credit to others for such purpose or for any
other purpose, in any manner that violates the Margin
Regulations.
SECTION 2.02. Interest. The Borrower shall pay
interest on the unpaid principal amount of each Loan owing
to each Lender from the date such Loan is made until the
principal amount thereof is paid in full, at the following
rates per annum:
(a) Base Rate Loans. Each Base Rate Loan shall
bear interest at a rate per annum equal to the Base Rate in
effect from time to time, payable quarterly in arrears on
the first Business Day of each January, April, July and
October during such period and on the date such Base Rate
Loan (or a portion thereof, in which case interest shall be
paid on such date in respect of such portion) is repaid on
the Commitment Termination Date or prepaid pursuant to
Section 2.05(d).
(b) Eurodollar Rate Loans. Each Eurodollar Rate
Loan shall bear interest at a rate per annum equal at all
times during each Interest Period for such Loan to the sum
of (i) the Eurodollar Rate for such Interest Period for such
Loan plus (ii) the Applicable Margin, payable on the last
day of such Interest Period and, if such Interest Period has
a duration of six (6) months or more, on the day during such
Interest Period that is three (3) months after the first day
of such Interest Period and, if applicable, the day that is
three (3) months after the last interest payment date during
such Interest Period (or, if such day is not a Business Day,
on the next succeeding Business Day).
(c) Bid Rate Loans. Each Bid Rate Loan shall
bear interest as specified in Section 2.01(b)(x).
(d) Default Interest. Notwithstanding
Section 2.02(a), (b) or (c), upon the occurrence and during
the continuation of (i) an Event of Default, other than an
Event of Default described in Section 6.01(a), and upon
notice to the Borrower from the Administrative Agent that
the rate of interest specified in this Section 2.02(d) shall
apply, commencing on the date of such notice and thereafter
until such Event of Default is cured or waived in accordance
with the terms hereof, or (ii) an Event of Default described
in Section 6.01(a), interest on the unpaid principal amount
of each Loan shall accrue at a rate per annum equal at any
time to the rate of interest otherwise in effect at such
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time pursuant to Section 2.02(a), (b) or (c) plus 2% per
annum.
SECTION 2.03. Conversion of Loans; Continuation
of Eurodollar Rate Loans.
(a) Optional Conversion; Continuation. The
Borrower may, on any Business Day, by notice given to the
Administrative Agent not later than 11:00 a.m. (New York
City time) on the third Business Day prior to such Business
Day and subject to the provisions of Section 2.06, Convert
all or any portion of the Revolving Loans or Swing Line
Loans comprising the same Borrowing into Loans of the other
Type; provided, however, that (i) any Conversion of
Revolving Loans into Swing Line Loans shall be made on, and
only on, the last day of an Interest Period then applicable
to such Revolving Loans unless the Borrower pays or
reimburses to each Lender on the proposed Conversion date,
pursuant to Section 2.11, any loss, cost, expense or
liability incurred by such Lender as a result of such
Conversion made on any date other than the last date of the
applicable Interest Period, (ii) any Conversion of Swing
Line Loans into Revolving Loans shall be in an amount not
less than the minimum amount specified in Section 2.01(c),
and (iii) no Conversion of any Loans shall result in more
Interest Periods for outstanding Revolving Loans than
permitted under Section 2.01(c). The Borrower also may, by
notice given to the Administrative Agent not later than
11:00 a.m. (New York City time) on the third Business Day
prior to the Business Day on which an Interest Period with
respect to a Borrowing of Eurodollar Rate Loans will expire,
Continue all or any portion of such Revolving Loans equal to
$10,000,000 or an integral multiple of $1,000,000 in excess
of that amount as Eurodollar Rate Loans, and thereupon a
succeeding Interest Period in respect of such Eurodollar
Rate Loans shall commence on the expiration date of the
Interest Period then applicable thereto. Notwithstanding
any other provision hereof, the Borrower shall not have the
right to Convert Swing Line Loans into Revolving Loans or to
Continue Loans as Eurodollar Rate Loans if, on the date of
any such proposed Conversion or Continuation, a Default has
occurred and is continuing. Each such notice of Conversion
or Continuation shall, within the restrictions specified
above, specify (A) the date of such Conversion or
Continuation, (B) the Loans to be Converted or Continued and
(C) if a Conversion is into Eurodollar Rate Loans, and with
respect to a Continuation of Eurodollar Rate Loans, the
duration of the initial or successive Interest Period for
such Loans. Each notice of Conversion or Continuation shall
be irrevocable and binding on the Borrower.
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(b) Mandatory Conversion. (i) On the date on
which the aggregate unpaid principal amount of Eurodollar
Rate Loans comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than
$10,000,000, such Eurodollar Rate Loans shall automatically
Convert into Base Rate Loans.
(ii) If a Default occurs and is continuing
on the last day of an Interest Period applicable to a
Borrowing of Eurodollar Rate Loans, then (A) such Eurodollar
Rate Loans automatically shall Convert into Base Rate Loans
on the last day of such Interest Period, and the Borrower
shall not have the right to continue such Loans as
Eurodollar Rate Loans and select a succeeding Interest
Period with respect thereto and, subject to Section 2.09
hereof, any such selection of a succeeding Interest Period
theretofore made pursuant to the terms hereof shall be null
and void, and (B) the obligation of the Lenders to make, or
to Convert Loans into, Eurodollar Rate Loans shall be
suspended; provided, however, that each Eurodollar Rate Loan
automatically shall be Converted into a Base Rate Loan
immediately upon the Loans (or any of them) being declared
to be due and payable, or becoming due and payable, pursuant
to Section 6.01.
(iii) If the Borrower shall fail to Continue
any Eurodollar Rate Loans in accordance with the provisions
contained in this Section 2.03, the Administrative Agent
will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Loan will automatically,
on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Loan.
SECTION 2.04. Fees.
(a) Facility Fee. The Borrower agrees to pay to
the Administrative Agent, for the ratable accounts of the
Lenders, a facility fee (the "Facility Fee") on the average
daily Commitment of each Lender, whether used or unused,
from the date hereof, in the case of each Lender that is
signatory hereto, and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the
Commitment Termination Date, at the rate of (i) 0.065% per
annum so long as Senior Unsecured Debt of the Borrower shall
be rated at least AA- by S&P and Aa3 by Moody's, (ii) 0.075%
per annum so long as Senior Unsecured Debt of the Borrower
shall be rated at least A- from S&P and A3 by Moody's,
(iii) 0.09% per annum so long as Senior Unsecured Debt of
the Borrower shall be rated at least BBB+ by S&P and Baa1 by
Moody's, (iv) 0.15% per annum so long as Senior Unsecured
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Debt of the Borrower shall be rated at least BBB- by S&P and
Baa3 by Moody's and (v) 0.20% per annum at any other time
(including, without limitation, any time that there shall be
Senior Unsecured Debt of the Borrower outstanding and not
rated by both S&P and Moody's); provided that if there shall
be no Senior Unsecured Debt of the Borrower outstanding at
any time, the Facility Fee shall be determined by reference
to the most recent previously existing ratings of Senior
Unsecured Debt of the Borrower. The Facility Fee shall be
payable quarterly in arrears on the last Business Day of
each December, March, June and September, and on the
Commitment Termination Date.
(b) Administrative Agent's Fees. The Borrower
shall pay to the Administrative Agent, for its own account,
annually in advance on the Closing Date and each anniversary
of such date, a fee (the "Administrative Agent's Fee") in
the amount agreed in writing between the Borrower and the
Administrative Agent.
(c) Payment; Fees Fully Earned. All Fees shall
be payable to the Administrative Agent or the Arranger, as
the case may be, for its own account or the account of the
Lenders, as the case may be, at the Administrative Agent's
Account, in immediately available funds. All Fees shall be
fully earned on the date such Fees become payable pursuant
hereto and, when paid, shall be non-refundable, except that,
with respect only to the Administrative Agent's Fee, if the
Administrative Agent resigns or is removed pursuant to
Section 7.06, the retiring Administrative Agent shall return
to the Borrower a portion of the annual Administrative
Agent's Fee equal to (i) the amount of the Administrative
Agent's Fee actually paid to the retiring Administrative
Agent in respect of the year in which the Administrative
Agent resigns or is removed multiplied by (ii) a fraction,
the numerator of which is the number of days from the
effective date of resignation or removal to the next
succeeding anniversary of the Closing Date, and the
denominator is 360.
SECTION 2.05. Reduction of the Commitments;
Prepayment and Repayment.
(a) Optional Facility Reduction. The Borrower
shall have the right, upon at least ten (10) Business Days'
notice to the Administrative Agent, to terminate in whole or
reduce ratably in part the unused portions of the
Commitments of the Lenders, provided that each partial
reduction shall be in the aggregate amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof.
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(b) Facility Termination. (i) The Facility
shall be terminated on the date (the "Commitment Termination
Date") that is the earlier of (x) the date which is 364 days
after the Closing Date and (y) the date upon which the
Borrower terminates in whole the Commitments of the Lenders
in accordance with Section 2.05(a).
(c) Optional Prepayment. The Borrower may, upon
at least three (3) Business Days' notice to the
Administrative Agent (or, in the case of Swing Line Loans,
same day notice on any Business Day) stating a proposed
prepayment date and aggregate principal amount to be
prepaid, and if such notice is given the Borrower shall on
such date, prepay, in whole or in part in the aggregate
amount stated in such notice, the outstanding principal
amount of all of the Loans comprising part of the same
Borrowing or Borrowings, without penalty or premium;
provided, however, that, unless the entire outstanding
principal amount of the Loans is then prepaid and the
Facility is terminated in connection therewith, each partial
prepayment shall be in an aggregate principal amount not
less than $10,000,000 and in an integral multiple of
$1,000,000 in excess thereof; and provided, further, that no
such prepayment of a Eurodollar Rate Loan or a Bid Rate Loan
shall be made other than on the last day of the Interest
Period therefor or the maturity date for repayment of such
Bid Rate Loan, unless such a prepayment on such other day is
accompanied by payment or reimbursement to each Lender,
pursuant to Section 2.11, of any loss, cost, expense or
liability incurred by such Lender as a result of such
prepayment on any date other than the last date of the
applicable Interest Period or the maturity date for
repayment of such Bid Rate Loan.
(d) Mandatory Prepayment. The Borrower shall,
on each Business Day, prepay an aggregate principal amount
of the Loans comprising part of the same Borrowing or
Borrowings equal to the amount by which the aggregate
principal amount of the Loans then outstanding exceeds the
Facility in effect on such Business Day (after giving effect
to any reductions in the Facility on such Business Day
pursuant to the terms hereof). Payments of such amounts
shall be applied first to outstanding Swing Line Loans,
second to outstanding Revolving Loans and third to Bid Rate
Loans.
(e) Repayment. The outstanding principal amount
of the Loans, and accrued interest thereon, shall be repaid
in full on the Commitment Termination Date.
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SECTION 2.06. Increased Costs, Etc.
(a) Increased Cost. Except as to taxes, levies,
imposts, deductions, charges or withholdings, if either (i)
the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in
the interpretation of any law or regulation or (ii) the
compliance by any Lender or its Eurodollar Lending Office
with any guideline or request from any central bank or other
governmental authority, in any case introduced, changed,
interpreted or requested after the date hereof (whether or
not having the force of law), shall either (x) impose,
modify or deem applicable any reserve, special deposit or
similar requirement against assets held by, or deposits in
or for the account of, any Lender or (y) impose on any
Lender or any Person controlling such Lender any other
condition relating to this Agreement or such Lender or such
Person or the Eurodollar Rate Loans made by such Lender, and
the result of any event referred to in clause (i) or (ii)
shall be to increase the cost to any Lender or any Person
controlling such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, then the
Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such
Lender such additional amounts as may be required to
compensate such Lender or such Person for such increased
cost; provided, however, that such Lender shall designate a
different Eurodollar Lending Office if, in the sole judgment
of the Lender, such designation would reduce such additional
amounts payable to such Lender by the Borrower and would
not, in the sole judgment of such Lender, be disadvantageous
in any manner to such Lender or any Person controlling such
Lender and provided further that (A) each Lender shall use
its best efforts to notify the Borrower and the
Administrative Agent as to the existence of any change of
circumstance described above in this subsection (a) as
promptly as practical after such Lender gains knowledge
thereof and is able to determine that such change will
result in increased costs hereunder, but the failure to give
such notice shall not (subject to clause (B) below) affect
the right of any Lender to any payment to which it would
otherwise be entitled hereunder and (B) the Borrower shall
not be obligated to compensate such Lender for any costs
incurred for any period after the Lender gains knowledge of
the change of circumstance and is able to determine that
such change will result in increased costs and prior to the
date that is sixty (60) days before the date upon which
notice of such change is first given to Borrower as required
by clause (A) above. A certificate as to the amount of such
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increased cost and the manner of computation thereof,
submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest
error.
(b) Capital. If any Lender determines that the
adoption or effectiveness after the date of this Agreement
of any treaty, law, rule, regulation or guideline in regard
to capital adequacy, or any change after the date of this
Agreement in, or in the application of, any such treaty,
law, rule, regulation or guideline (whether or not in effect
on the date of this Agreement and whether or not then
scheduled or anticipated to take effect thereafter), or any
change after the date of this Agreement in the
interpretation or administration thereof by any central bank
or other governmental or monetary authority charged with the
interpretation or administration thereof, or compliance by
the Lender or either of its Applicable Lending Offices or
any Person controlling the Lender with any interpretation,
directive, request, order or decree introduced after the
date of this Agreement in regard to capital adequacy
(whether or not having the force of law) by any such central
bank or other governmental or monetary authority has or
would have the effect of reducing the rate of return on the
capital of or maintained by the Lender or any Person
controlling the Lender as a consequence of the Lender's
Loans or Commitment hereunder, and other loans or
commitments of this type, by increasing the amount of
capital required or expected to be maintained by such Lender
or any Person controlling such Lender, to a level below that
which the Lender or such Person could have achieved but for
such adoption, effectiveness, change or compliance (taking
into account the Lender's or such Person's policies with
respect to capital adequacy), then the Borrower shall, from
time to time, pay to the Lender, upon demand by such Lender
(with a copy of such demand to the Administrative Agent),
such additional amounts as may be specified by such Lender
as being sufficient to compensate such Lender for such
reduction in return, to the extent that the Lender
determines such reduction to be attributable to the
existence, issuance or maintenance of its Loans or
Commitment; provided that (A) each Lender shall use its best
efforts to notify the Borrower and the Administrative Agent
as to the existence of any change of circumstance described
above in this subsection (b) as promptly as practical after
such Lender gains knowledge thereof and is able to determine
that such change will result in additional amounts
hereunder, but the failure to give such notice shall not
(subject to clause (B) below) affect the right of any Lender
to any payment to which it would otherwise be entitled
hereunder and (B) the Borrower shall not be obligated to
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compensate such Lender for any such reduction attributable
to any period after the Lender gains knowledge of the change
of circumstance and is able to determine that such change
will result in increased costs and prior to the date that is
sixty (60) days before the date upon which notice of such
change is first given to Borrower as required by clause (A)
above. A certificate as to such amounts submitted to the
Borrower by such Lender shall be conclusive and binding for
all purposes, absent manifest error.
(c) Unavailability or Inadequacy of Eurodollar
Rate. If, with respect to any proposed borrowing or
Continuation of, or Conversion of Base Rate Loans into,
Eurodollar Rate Loans, (i) each Reference Bank notifies the
Administrative Agent that it has determined that, for any
reason, appropriate quotations are not available to it in
the London interbank market for purposes of determining the
Eurodollar Rate, or (ii) Required Lenders notify the
Administrative Agent that the Eurodollar Rate for the
Interest Period proposed to be applicable to such Loans will
not adequately reflect the cost to such Lenders of making,
funding or maintaining such Eurodollar Rate Loans for such
Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (x) each
Eurodollar Rate Loan proposed to be Continued will
automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Loan and (y) the
obligation of the Lenders to make, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that, in the
case of clause (i), the Administrative Agent has, and, in
the case of clause (ii), Required Lenders have, determined
that the circumstances causing such suspension no longer
exist.
(d) Illegality. Notwithstanding any other
provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation
shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans
hereunder, then, on notice thereof and demand therefor by
such Lender to the Borrower through the Administrative
Agent, (i) each Eurodollar Rate Loan will automatically,
upon such demand, Convert into a Base Rate Loan and (ii) the
obligation of the Lenders to make, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that such
Lender has determined that the circumstances causing such
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suspension no longer exist. Before giving any such notice
and demand to the Administrative Agent pursuant to this
Section 2.06(d), such Lender shall designate a different
Eurodollar Lending Office if such designation would avoid
the need for giving such notice and demand and would not, in
the judgment of such Lender, be otherwise disadvantageous to
such Lender.
SECTION 2.07. Taxes.
(a) No Withholding. Any and all payments by the
Borrower hereunder shall be made free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, (i) in the
case of each Lender and the Administrative Agent, taxes
imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender
or the Administrative Agent (as the case may be) is
organized or any political subdivision or taxing authority
thereof or therein, (ii) in the case of each Lender, taxes
imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's principal office or
Applicable Lending Office or any political subdivision or
taxing authority thereof or therein and (iii) in the case of
each Lender, United States withholding tax payable with
respect to payments hereunder under laws (including, without
limitation, any statute, treaty, ruling, determination or
regulation) in effect on the Initial Date, but not excluding
any United States withholding tax payable as a result of any
change in (including, without limitation, any change in
interpretation thereof) such laws occurring after the
Initial Date (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). For purposes of this
Section 2.07, the term "Initial Date" shall mean, in the
case of each Lender signatory hereto, the Closing Date and,
in the case of each Lender other than a Lender signatory
hereto, the date of the Assignment and Acceptance or the
Additional Lender Agreement, as the case may be, pursuant to
which it becomes a Lender. If the Borrower shall be
required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the
Administrative Agent, (x) the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional
sums payable under this Section 2.07) such Lender or the
Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such
deductions been made, (y) the Borrower shall make such
deductions and (z) the Borrower shall pay the full amount
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deducted to the relevant taxation authority or other
authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different
Applicable Lending Office if, in the sole judgment of the
Lender, such designation would avoid the need for, or reduce
the amount of, any Taxes required to be deducted from or in
respect of any sum payable hereunder to any Lender or the
Administrative Agent and would not, in the sole judgment of
such Lender, be otherwise disadvantageous in any manner to
such Lender or contrary to its policies. Notwithstanding
the foregoing, the Borrower shall have no obligation to pay
any amount to or for the account of any Lender or the
Administrative Agent on account of any Taxes pursuant to
this Section 2.07 to the extent such amount results from the
failure of any Lender or the Administrative Agent to deliver
to the Borrower and the Administrative Agent, on or before
the date payment is due by the Borrower to such Lender or
the Administrative Agent, two (2) duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, or
any successor applicable form, as the case may be,
certifying that the Lender or the Administrative Agent is
entitled to receive such payments without deduction or
withholding of United States Federal income taxes, if either
such form or successor form would be applicable.
(b) Other Taxes. In addition to making all
payments to be made hereunder free and clear of Taxes, the
Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes,
charges or similar levies (which shall not, in any event,
include any transfer or other Taxes that arise or are
incurred or imposed solely as a result of transfer or
assignment by a Lender of all or any portion of its Loans or
its Commitment) that arise from any payment made hereunder
or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").
(c) Indemnity. The Borrower will indemnify,
within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written
demand therefor, each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.07)
paid by such Lender or the Administrative Agent (as the case
may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally assessed.
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(d) Evidence of Payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish
to the Administrative Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt
evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder, the Borrower will furnish
to the Administrative Agent, at such address, a certificate
from each appropriate taxing authority, or an opinion of
counsel acceptable to the Administrative Agent, in either
case stating that such payment is exempt from or not subject
to Taxes; provided, however, that such certificate or
opinion need only be given if: (i) the Borrower makes any
payment from any account located outside the United States,
or (ii) the payment is made by a payor that is not a United
States Person. For purposes of this Section 2.07, the terms
"United States" and "United States Person" shall have the
meanings set forth in Section 7701 of the Code.
(e) Change of Lending Office. If a Lender shall
change its Applicable Lending Office, such Lender shall not
be entitled to receive any greater payment under this
Section 2.07 than such Lender would have been entitled to
receive if it had not changed its Applicable Lending Office,
unless such change was made at the request of the Borrower
or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Survival of Covenant. Without prejudice to
the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower
contained in this Section 2.07 shall survive the payment in
full of principal and interest hereunder.
SECTION 2.08. Replacement of Lender in Event of
Adverse Condition. In the event the Borrower becomes
obligated to pay additional amounts to any Lender pursuant
to Section 2.06 or 2.07 as a result of any condition
described therein, then, unless such Lender theretofore has
removed or cured the condition creating the obligation to
pay such additional amounts, the Borrower may designate
another bank that is acceptable to the Administrative Agent
and Required Lenders (such bank herein being referred to as
a "Replacement Lender") to purchase the Loans and assume the
Commitment of such Lender and such Lender's rights
hereunder, without recourse to or warranty by, or expense
to, such Lender for a purchase price equal to the
outstanding principal amount of the Loans payable to such
Lender plus any accrued but unpaid interest on such Loans
and accrued but unpaid Facility Fees in respect of that
Lender's Commitment, and upon such purchase and execution
hereof by such Replacement Lender, such Lender shall no
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longer be a party hereto or have any rights hereunder, and
the Replacement Lender shall succeed to the rights of such
Lender hereunder.
SECTION 2.09. Payments.
(a) Time for Payment. (i) The Borrower shall
make each payment hereunder not later than 1:00 p.m. (New
York City time) on the day when due in U.S. Dollars to the
Administrative Agent at the Administrative Agent's Account
in immediately available funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or Facility
Fees ratably (other than payable pursuant to Section
2.06(a), 2.06(b) or 2.07) to the Lenders for the account of
their Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the
terms of this Agreement, provided that if such funds are
received by the Administrative Agent prior to 1:00 p.m. (New
York time) on any Business Day and are not distributed to
any Lender by the Administrative Agent on the same Business
Day, the Administrative Agent shall pay to such Lender
interest thereon at the Federal Funds Rate for each day
until such funds are so distributed. Upon its acceptance of
an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.
(ii) Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in
the computation of payment of interest, as the case may be;
provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made
in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(b) Computation. All computations of interest
in respect of Eurodollar Rate Loans shall be made by the
Administrative Agent on the basis of a year of 360 days, and
computations of interest in respect of Base Rate Loans and
Fees shall be made by the Administrative Agent on the basis
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of a year of 365 days or 366 days, as the case may be, in
each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for
which such interest or Fees are payable. Each determination
by the Administrative Agent hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(c) Distribution of Payments. Unless the
Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to
any Lender hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender on such due date an amount
equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender shall
repay to the Administrative Agent forthwith on demand such
amount distributed to such Lender together with interest
thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the interest
rate per annum certified by the Administrative Agent to such
Lender to be the Administrative Agent's cost of funds with
respect to such payment made to such Lender.
(d) Interest on Overdue Payment. Interest on
any past due payment shall be payable on demand.
SECTION 2.10. Sharing of Payments, Etc. If any
Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans owing to it (other
than pursuant to Section 2.06(a), 2.06(b) or 2.07) in excess
of its ratable share of payments on account of the Loans
obtained by all the Lenders, such Lender shall so notify the
Administrative Agent and forthwith purchase from the other
Lenders such participations in the Loans owing to them as
shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender
shall repay to the purchasing Lender the purchase price to
the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of
(i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by
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the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to
this Section 2.10 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in
the amount of such participation.
SECTION 2.11. Compensation for Funding Losses.
In addition to the amounts required to be paid by the
Borrower pursuant to Sections 2.06 and 2.07 hereof, the
Borrower shall pay to any Lender, upon demand by such
Lender, such amount or amounts as the Lender determines is
or are necessary to compensate it for any loss, cost,
expense or liabilities incurred (including, without
limitation, any loss, cost or expense incurred by reason of
the liquidation or redeployment of deposits, provided that
such loss, cost or expenses shall be determined by reference
to the cost to such Lender of such deposits and not by
reference to the rate of interest borne by the Eurodollar
Rate Loans or Bid Rate Loans paid, prepaid or Converted) by
it as a result of any payment, prepayment or Conversion of a
Eurodollar Rate Loan or Bid Rate Loan for any reason
(including, without limitation, upon a mandatory prepayment
pursuant to Section 2.05(d) or by reason of an acceleration
pursuant to Section 6.01 hereof) on a date other than the
last day of an Interest Period applicable to such Eurodollar
Rate Loan or the maturity date for repayment of such Bid
Rate Loan.
SECTION 2.12. Pro Rata Treatment. Except to the
extent otherwise provided herein, (i) each Borrowing of
Swing Line Loans or Revolving Loans shall be requested from
the Lenders, pro rata according to their respective
Commitments, (ii) each termination or reduction of the
Facility shall be applied pro rata to the respective
Commitments of the Lenders, (iii) each payment or prepayment
by the Borrower of principal of any Swing Line Loans or
Revolving Loans shall be made for the account of the Lenders
pro rata according to the aggregate outstanding amount of
their respective Swing Line Loans or Revolving Loans, and
(iv) each payment by the Borrower of interest on the Swing
Line Loans, Revolving Loans and Facility Fees shall be made
for the account of the Lenders pro rata according to the
outstanding principal amount of their respective Swing Line
Loans or Revolving Loans and their respective Commitments,
respectively.
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SECTION 2.13. Evidence of Debt.
(a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from
each Loan owing to such Lender from time to time, including
the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, the Type of Loans
comprising such Borrowing and any Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Administrative Agent
from the Borrower hereunder, and each Lender's share
thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest
error.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make the
initial Loan or Loans hereunder is subject to the following
conditions precedent, and the acceptance by the Borrower of
the proceeds of such initial Loan or Loans shall constitute
a representation and warranty by the Borrower that all of
such conditions (other than any such conditions that are
waived in writing by the Lenders in accordance with the
terms hereof) were satisfied on and as of the date of such
initial Loan or Loans:
(a) There shall exist no action, suit,
investigation, litigation or proceeding pending or, except
as disclosed in Schedule 4.01(h) hereto, threatened before
any court, governmental agency or arbitrator (i) against or
affecting the Borrower or any of its Subsidiaries or their
respective assets or properties, in which there is a
reasonable possibility of an adverse determination that
could have a material adverse effect on the business,
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condition (financial or otherwise), operations, performance
or properties of the Borrower, or the Borrower and its
Subsidiaries, taken as a whole, or on the ability of the
Borrower to perform its Obligations hereunder, or
(ii) against the Borrower or the Administrative Agent (or,
as a condition only to any Lender's obligation hereunder,
such Lender) that seeks to enjoin or purports to affect the
legality, validity or enforceability of this Agreement or
the consummation of the transactions contemplated hereby or
materially adversely affect the rights of the Borrower or
the Administrative Agent (or such Lender) hereunder.
(b) (i) All governmental and third party
consents and approvals necessary in connection with this
Agreement or the consummation of the transactions
contemplated hereby shall have been obtained (without the
imposition of any conditions which are not acceptable to the
Lenders) and shall remain in effect; and (ii) no law or
regulation shall, in the judgment of the Lenders, restrain,
prevent or impose materially adverse conditions upon this
Agreement or the consummation of the transactions
contemplated hereby.
(c) The Borrower shall have paid all Fees that
are due and expenses (as provided in Section 8.04 and as
otherwise agreed between the Borrower and the Administrative
Agent, the Arranger or any Lender) of the Administrative
Agent, the Arranger and the Lenders.
(d) The Administrative Agent shall have received
on or before the Closing Date the following (each dated the
Closing Date, unless otherwise specified), in form and
substance satisfactory to the Administrative Agent (unless
otherwise specified):
(i) certified copies of the resolutions of
the Board of Directors of the Borrower approving this
Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement;
(ii) a copy of the articles of organization
of the Borrower and each amendment thereto, certified as of
a recent date prior to the Closing Date by the Secretary of
State of The Commonwealth of Massachusetts as being a true
and correct copy thereof;
(iii) a copy of (x) a certificate or
certificates of the Secretary of State of The Commonwealth
of Massachusetts, dated as of a recent date prior to the
Closing Date, listing the charter and all amendments thereto
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of the Borrower on file in his or her office and certifying
that (A) such amendments are the only amendments to the
Borrower's charter on file in his or her office, and (B) the
Borrower is duly incorporated and in good standing under the
laws of such state and (y) a certificate of the
Massachusetts Department of Revenue as to the tax good
standing of the Borrower under the laws of Massachusetts (or
a certificate of an officer of the Borrower regarding same
in form and substance reasonably satisfactory to the
Administrative Agent to be followed by a certificate of the
Massachusetts Department of Revenue as soon as practicable);
(iv) a certificate of the Borrower, signed
on behalf of the Borrower by its President or any Vice
President and the Clerk or any Assistant Clerk, dated the
Closing Date, certifying as to (A) the absence of any
amendments to the articles of organization of the Borrower
since the date of the Secretary of State's certificate
referred to in Section 3.01(d)(iii), (B) a true and correct
copy of the bylaws of the Borrower as in effect on the
Closing Date, (C) the due organization and good standing of
the Borrower as a corporation under the laws of its state of
incorporation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower, (D) the truth in
all material respects of the representations and warranties
contained herein, (E) the absence of any event occurring and
continuing, or resulting from the Borrowing(s) (if any), on
the Closing Date that constitutes a Default and (F) as to
satisfaction of the conditions precedent specified in
Sections 3.01(e) and (f);
(v) a certificate of the Clerk or any
Assistant Clerk of the Borrower certifying as to (A) the
adoption of resolutions by the Board of Directors of the
Borrower in the form attached thereto authorizing and
approving this Agreement, and that such resolutions have not
been rescinded, modified or amended and remain in full force
and effect, and (B) the names and true signatures of the
officers of the Borrower authorized to sign this Agreement
and the other documents to be delivered hereunder;
(vi) duly executed copies of this Agreement,
in number sufficient for all of the Lenders;
(vii) such financial, business and other
information regarding the Borrower and its Subsidiaries as
the Lenders shall have reasonably requested, including,
without limitation, (A) information as to possible
contingent liabilities, tax information, environmental
information, obligations under ERISA, collective bargaining
agreements and other arrangements with employees and
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(B) audited consolidated financial statements for the period
ended December 31, 1993 for the Borrower and its
Subsidiaries;
(viii) a favorable opinion of Ropes & Gray,
counsel to the Borrower, in substantially the form of
Exhibit C and hereby given upon the express instructions of
the Borrower, and as to such other matters as any Lender
through the Administrative Agent may reasonably request; and
(ix) a favorable opinion of Gibson, Dunn &
Crutcher, counsel to the Administrative Agent and the
Lenders, as to such matters as the Administrative Agent may
request.
(e) As of the Closing Date, there shall have
occurred no material adverse change in the business,
condition (financial or otherwise), operations, performance
or properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, since December 31, 1993.
(f) As of the Closing Date, all availability of
funds and the commitments by the lenders under the
$175,000,000 Credit Agreement dated as of December 7, 1992
among the Borrower, the lenders party thereto, Credit
Suisse, as Agent, and Credit Suisse First Boston Limited, as
Syndication Agent, shall have been fully cancelled and
terminated and any and all amounts outstanding thereunder
shall have been repaid in full.
SECTION 3.02. Conditions Precedent to Each
Borrowing. The obligation of each Lender to make a Loan
(including the initial Loan or Loans) on the occasion of
each Borrowing shall be subject to the prior satisfaction on
the Closing Date of the conditions identified in Section
3.01 and also subject to the following conditions precedent,
and the acceptance by the Borrower of the proceeds of Loans
made shall constitute a representation and warranty by the
Borrower, that all of such conditions (other than any such
conditions that are waived in accordance with the terms
hereof) were satisfied on the date of such Borrowing:
(a) The representations and warranties contained
herein shall be true and correct in all material respects on
and as of the date of such Borrowing, both before and after
giving effect to such Borrowing and to the application of
the proceeds therefrom, as though made on and as of such
date;
(b) No event shall have occurred and be
continuing, or circumstance shall exist, or would result
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from such Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
(c) After giving effect to such Borrowing, the
aggregate principal amount of Loans then outstanding shall
not exceed the Facility; and
(d) The Administrative Agent shall have received
such other approvals, opinions, documents or information as
Required Lenders or the Administrative Agent may have
reasonably requested.
SECTION 3.03. Determinations Under Section 3.01.
For purposes of determining compliance with the conditions
specified in Section 3.01, each Lender shall be deemed to
have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated hereby shall
have received notice from such Lender prior to the initial
Borrowing specifying its objection thereto and either such
objection shall not have been withdrawn by notice to the
Administrative Agent to that effect or such Lender shall not
have made available to the Administrative Agent such
Lender's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
the Borrower. The Borrower represents and warrants as
follows:
(a) The Borrower (i) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) is duly
qualified or licensed as a foreign corporation and is in
good standing in each jurisdiction in which it owns or
leases property or in which the conduct of its business
requires it to so qualify or be licensed (except where the
failure to so qualify or be licensed would not have a
material adverse effect on the Borrower and its
Subsidiaries, taken as a whole) and (iii) has all requisite
corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted
and as proposed to be conducted. All of the outstanding
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capital stock of the Borrower has been validly issued and is
fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a
complete and accurate list of all of the Subsidiaries of the
Borrower, showing as to each such Subsidiary, as of the date
hereof, the jurisdiction of its incorporation, the number of
shares of each class of capital stock authorized and the
number outstanding, the percentage of the outstanding shares
of each such class owned (directly or indirectly) by the
Borrower, and the number of shares covered by all
outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof. All of the
outstanding capital stock of each such Subsidiary has been
validly issued, is fully paid and non-assessable and all of
such capital stock that is reflected on Schedule 4.01(b) as
being owned (directly or indirectly) by the Borrower is
owned by the Borrower or one or more of its Subsidiaries
free and clear of all Liens, except Permitted Liens
described in clause (a) of the definition thereof. Each
such Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified or
licensed as a foreign corporation and is in good standing in
each jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify
or be licensed (except where the failure to so qualify or be
licensed would not have a material adverse effect on the
Borrower and its Subsidiaries, taken as a whole) and
(iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by
the Borrower of this Agreement and the consummation of the
transactions contemplated hereby are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's
articles of organization or by-laws, (ii) violate any law,
rule, regulation (including, without limitation, Regulation
G, T, U or X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award of any court or other governmental
authority, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust or lease, or any other
instrument binding on or affecting the Borrower, any of its
Subsidiaries or any of their properties, the contravention,
violation, conflict, breach, or default with, of or under
which could have a material adverse effect on the business,
condition (financial or otherwise), operations, performance
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or properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, or on the ability of the
Borrower to perform its Obligations hereunder or (iv) result
in or require the creation or imposition of any Lien upon or
with respect to any of the properties of the Borrower or any
of its Subsidiaries. Neither the Borrower nor any of its
Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which would be
reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or of the Borrower
and its Subsidiaries, taken as a whole.
(d) No authorization or approval or other action
by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is
required for the due execution, delivery and performance by
the Borrower of this Agreement or for the consummation of
the transactions contemplated thereby or hereby, except for
authorizations, approvals, actions, notices and filings
which have been duly obtained, taken, given or made and are
in full force and effect.
(e) This Agreement has been executed and
delivered by the Borrower and constitutes the legal, valid
and binding obligation of the Borrower, enforceable against
it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally or by application of
general principles of equity.
(f) The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 1993, and
the related consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the fiscal year
then ended, certified by Ernst & Young, and the unaudited
consolidated balance sheet of the Borrower and its
Subsidiaries as at June 30, 1994, and the related
consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the fiscal quarter then
ended, each fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as at such
date and the consolidated results of the operations of the
Borrower and its Subsidiaries for such fiscal period ended
on such date, all in accordance with GAAP applied on a
consistent basis.
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(g) No information, exhibit or report furnished
by the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or
pursuant to the terms of this Agreement, as such
information, exhibit or report has been amended,
supplemented or superseded by any other information, exhibit
or report later delivered to the same parties receiving such
information, exhibit or report, contained any material
misstatement of fact or omitted to state a material fact or
any fact necessary to make the statements contained therein,
in light of circumstances in which made, not misleading.
(h) Except as disclosed in Schedule 4.01(h)
hereto, there is no action, suit, investigation, litigation
or proceeding affecting the Borrower or any of its
Subsidiaries pending or, to the best knowledge of the
Borrower, threatened before any court, governmental agency
or arbitrator (i) that would be reasonably likely to have a
material adverse effect on the business, condition
(financial or otherwise), operations, performance or
properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, or (ii) that purports to
affect the legality, validity or enforceability of this
Agreement or the consummation of the transactions
contemplated thereby or hereby.
(i) The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or
carrying Margin Stock, and no proceeds of any Loan will be
used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying
any Margin Stock in violation of the Margin Regulations.
(j) No ERISA Event has occurred which resulted in
a material liability that is not being contested in good faith
by appropriate proceedings or has not been satisfied with
respect to any Plan with an Insufficiency in excess of
$5,000,000. Each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code.
(k) Neither the Borrower nor any ERISA Affiliate
has incurred any unpaid Withdrawal Liability, or is
reasonably expected to incur any Withdrawal Liability, to
any Multiemployer Plan, which is or would not be contested
in good faith by appropriate proceedings, in an amount in
excess of $5,000,000.
(l) Neither the business nor the properties of
the Borrower or any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor
dispute, or other casualty (whether or not covered by
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insurance) that would be reasonably likely to have a
material adverse effect on the business, condition
(financial or otherwise), operations, performance or
properties of the Borrower or the Borrower and its
Subsidiaries, taken as a whole.
(m) The operations and properties of the Borrower
and each of its Subsidiaries comply in all material respects
with all applicable laws, rules and regulations, including,
without limitation, all applicable environmental laws
(except to the extent that failure to so comply would not
have a material adverse effect upon the Borrower and its
Subsidiaries, taken as a whole).
(n) Neither the Borrower nor any of its
Subsidiaries is a party to any contract or any indenture,
loan or credit agreement or lease or subject to any charter
or corporate restriction that would be reasonably likely, in
light of the circumstances prevailing on the date of this
Agreement, to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or the Borrower
and its Subsidiaries, taken as a whole, or on the ability of
the Borrower to perform its obligations hereunder.
(o) The Borrower and each of its Subsidiaries has
filed, or there has been filed on its behalf, all tax
returns (Federal, State, local and foreign) required to be
filed prior to the date of the making of this representation
and warranty and has paid all taxes shown thereon to be due,
including interest, additions to taxes and penalties, or
provided adequate reserves for payment thereof, if failure
to pay such taxes could have a material adverse effect on
the Borrower or the Borrower and its Subsidiaries, taken as
a whole.
(p) Neither the Borrower nor any of its
Subsidiaries is an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the
making of the Loans nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of
the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(q) The Borrower is, individually and together
with its Subsidiaries, Solvent.
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as
any Revolving Loan, Swing Line Loan or Bid Rate Loan shall
remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and
cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules and regulations,
including, without limitation, all applicable environmental
laws.
(b) Payment of Taxes, Etc. Pay and discharge,
and cause each of its Subsidiaries to pay and discharge,
before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which
appropriate reserves are maintained in accordance with GAAP.
(c) Maintenance of Insurance. Maintain, and
cause each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and (except as permitted under
Section 5.02(b) or 5.02(c)) cause each of its Subsidiaries
to preserve and maintain, its corporate existence, rights
and franchises; provided, however, that neither the Borrower
nor any Subsidiary shall be required to preserve any right
or franchise if the Board of Directors of the Borrower or
such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may
be, and the loss thereof is not disadvantageous in any
material respect to the Borrower or the Lenders.
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(e) Visitation Rights. At any reasonable time
and from time to time, upon reasonable prior notice, permit
the Administrative Agent or any of the Lenders or agents or
representatives thereof, to the extent reasonably requested,
to examine and make copies of and abstracts from the records
and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and any of
its Subsidiaries with any of their officers or directors and
with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of
its Subsidiaries to keep, proper books of record and
account, in which appropriate entries shall be made of all
financial transactions and the assets and business of the
Borrower and each Subsidiary to the extent necessary to
permit the preparation of the financial statements required
to be delivered hereunder.
(g) Maintenance of Properties, Etc. Except to
the extent expressly permitted by this Agreement, maintain
and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its properties that are used or useful
in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct or
engage in, and cause each of its Subsidiaries to conduct,
any transaction otherwise permitted hereunder with any of
their respective Affiliates (other than the Borrower or any
of its Subsidiaries) on terms that are fair and reasonable
and no less favorable to the Borrower or such Subsidiary
(considered as a whole in conjunction with all other
existing arrangements and relationships with such Affiliate)
than it would obtain in a comparable arms'-length
transaction with a Person not an Affiliate.
(i) Maintenance of Consolidated Net Worth.
Maintain a Consolidated Net Worth, determined as of the end
of each fiscal quarter of the Borrower, of not less than
$600,000,000.
(j) Maintenance of Leverage Ratio. Maintain a
Leverage Ratio, determined as of the end of each fiscal
quarter of the Borrower, of not more than 0.50 to 1.00.
(k) Maintenance of Interest Coverage Ratio.
Maintain an Interest Coverage Ratio, determined as of the
end of each fiscal quarter for the period of four (4) fiscal
quarters then ended, of not less than 3:1.
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(l) Reporting Requirements. Furnish to the
Administrative Agent for distribution to the Lenders:
(i) as soon as possible and in any event
within three (3) days after the Borrower knows or has reason
to know of the occurrence of any Default, a statement of the
chief financial officer of the Borrower setting forth
details of such Default and the action that the Borrower
proposes to take with respect thereto;
(ii) 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 Borrower, commencing
with the quarter ended September 30, 1994, an unaudited
consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and unaudited
consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and
ending with the end of such quarter, setting forth in each
case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year (to the
extent that comparative figures were prepared for such
previous period), all in reasonable detail and duly
certified (subject to normal year-end audit adjustments and
the absence of footnotes) by the chief financial officer of
the Borrower as having been prepared in accordance with
GAAP, provided, that for purposes of this
Section 5.01(l)(ii) the Borrower shall furnish to the
Administrative Agent with copies for each Lender the
Borrower's report on Form 10-Q filed with the Securities and
Exchange Commission, together with (A) a certificate of said
officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the
Borrower proposes to take with respect thereto, and (B) a
schedule, certified by such officer, in reasonable detail,
of the computations used by the Borrower in determining, as
of the end of such fiscal quarter, compliance with the
covenants contained in Sections 5.01(i), (j) and (k) and
5.02(c) and (d);
(iii) as soon as available and in any event
within 90 days after the end of each fiscal year of the
Borrower, a copy of the consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal
period or year and consolidated statements of income,
retained earnings and cash flows of the Borrower and its
Subsidiaries for such period or fiscal year, in each case
certified without material adverse qualification, by Ernst &
Young or other independent public accountants of recognized
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standing acceptable to the Administrative Agent, provided,
that for purposes of this Section 5.01(l)(iii), the Borrower
shall furnish to the Administrative Agent with copies for
each Lender the Borrower's Annual Report on Form 10-K filed
with the Securities and Exchange Commission, together with
(A) a certificate of such accounting firm stating that in
the course of the regular audit of the financial statements
of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with GAAP,
such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the
opinion of such accounting firm, a Default has occurred and
is continuing, a statement as to the nature thereof, and
(B) a schedule, certified by the chief financial officer of
the Borrower, in form and substance satisfactory to the
Administrative Agent of the computations used by the
Borrower in determining, as of the end of such fiscal period
or year, compliance with the covenants contained in
Sections 5.01(i), (j) and (k) and 5.02 (c) and (d);
(iv) in the event of any change in GAAP from
the date of the financial statements referred to in Section
4.01(f) and upon delivery of any financial statement
required to be furnished under clauses (ii) or (iii) of this
Section 5.01(l), a statement of reconciliation conforming
any information contained in such financial statements
required to be furnished under clause (ii) or (iii) of this
Section 5.01(l) with GAAP as in effect on the date of the
financial statements referred to in Section 4.01(f);
(v) as soon as available and in any event no
later than 45 days after the end of each fiscal year of the
Borrower, financial projections prepared by management of
the Borrower, in form and substance satisfactory to the
Administrative Agent, of selected financial data (consisting
of earnings before interest and taxes, working capital
items, capital expenditures and depreciation) for the year
in which such projections are delivered and for each year
thereafter during the term of this Agreement;
(vi) promptly and in any event within 15
Business Days after the Borrower or any ERISA Affiliate
knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the
Borrower describing such ERISA Event and the action, if any,
that the Borrower or such ERISA Affiliate proposes to take
with respect thereto;
(vii) promptly and in any event within 10
Business Days after receipt thereof by the Borrower or any
ERISA Affiliate, copies of each notice from the PBGC stating
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its intention to terminate any Plan or to have a trustee
appointed to administer any Plan with an Insufficiency in
excess of $5,000,000;
(viii) promptly and in any event within 10
Business Days after receipt thereof by the Borrower or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal
Liability by any Multiemployer Plan which liability is in
excess of $5,000,000, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any
Multiemployer Plan or (C) the amount of liability incurred,
or that may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause
(A) or (B) which liability is in excess of $5,000,000;
(ix) 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 Borrower
or any of its Subsidiaries of the type described in Section
4.01(h);
(x) promptly after the sending or filing
thereof, copies of all such proxy statements, financial
statements and reports that the Borrower or any of its
Subsidiaries sends to its public stockholders, if any, and
copies of all regular, periodic and special reports, and all
registration statements, that the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be
substituted therefor, or with any national securities
exchange;
(xi) promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder
of the securities of the Borrower or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the
Lenders pursuant to any other clause of this Section 5.01(l); and
(xii) such other information in respect of the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or any of its
Subsidiaries as any Lender may from time to time reasonably
request.
SECTION 5.02. Negative Covenants. So long as any
Revolving Loan, Swing Line Loan or Bid Rate Loan shall
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remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will not, without the written
consent of the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Lien, or enter into
any agreement with any other Person not to create any Lien,
on or with respect to any of its properties of any
character, whether now owned or hereafter acquired (other
than, (i) in the case of the Borrower, capital stock of RBK
Holdings owned by it and capital stock of the Borrower
acquired in a Stock Repurchase and (ii) in the case of RBK
Holdings or any other Subsidiary of the Borrower, capital
stock of the Borrower owned by it), or sign or file, or
permit any of its Subsidiaries to sign or file, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its
Subsidiaries, as debtor, or sign, or permit any of its
Subsidiaries to sign, any security agreement authorizing any
secured party thereunder to file such financing statement,
or sell or assign, or permit any of its Subsidiaries to sell
or assign, any accounts, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Permitted Liens; and
(ii) Liens existing on the Closing Date and
described on Schedule 5.02(a).
(b) Mergers, Etc. Merge with or into or
consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its
assets or, except to the extent permitted by Section 5.02(c)
or Section 5.02(d), acquire all or substantially all of the
assets of any Person that is not principally engaged, at the
time of such acquisition, in the business of sporting goods,
leisure products, sports or fitness clubs, sports or leisure
services, footwear or sportswear apparel, or permit any of
its Subsidiaries to do so, except that any of the Borrower's
Subsidiaries may merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to, the Borrower or any of
its wholly-owned Subsidiaries, provided that at the time
thereof and after giving effect thereto no Default exists.
(c) Sales, Etc. of Assets. Sell, lease,
transfer or otherwise dispose of, or permit any of its
Subsidiaries to sell, lease, transfer or otherwise dispose
of, any of its assets (other than (i) in the case of the
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Borrower, capital stock of RBK Holdings owned by it and
capital stock of the Borrower acquired in a Stock Repurchase
and (ii) in the case of RBK Holdings or any other Subsidiary
of the Borrower, capital stock of the Borrower owned by it),
except (i) in the ordinary course of its business, (ii) in
connection with a transaction permitted by Section 5.02(b),
(iii) sales or other transfers of assets to the Borrower or
any of its wholly-owned Subsidiaries provided that at the
time thereof and giving effect thereto no Default exists and
provided, further, that the Borrower shall, at all times
after the Closing Date, directly own and operate, itself and
not through its interest in any Subsidiary, the United
States domestic Reebok fitness footwear and apparel business
and have a valid and enforceable license or other right to
use, and do business under, the name "Reebok"; provided,
however, that this Section 5.02(c) shall not apply, and the
Borrower and its Subsidiaries shall not be prohibited hereby
from selling, leasing, transferring or otherwise disposing
of assets, if at the end of the fiscal quarter most recently
ended prior to the consummation of any proposed sale, lease,
transfer or other disposition of assets and, to the best of
the Borrower's knowledge, on the date of consummation
thereof, the Leverage Ratio was and is less than 0.50 and
there exists on such date of consummation, both before and
after giving effect to such sale, lease, transfer or other
disposition, no Default; provided, further, that,
notwithstanding the foregoing provision, the first and
second provisos to clause (iii) of this Section 5.02(c)
shall at all times continue to apply and be in full force
and effect in respect of any proposed sale, lease, transfer
or other disposition of any of its assets by the Borrower to
any of its Subsidiaries.
(d) Change in Nature of Business. Except in
connection with a sale, lease, transfer or other disposition
of assets permitted under Section 5.02(c)(iii), make, or
permit any of its Subsidiaries to make, any material change
in the nature of the Borrower's business (considered on a
consolidated basis) as carried on at the date hereof,
provided, however, that the Borrower and its Subsidiaries
may invest, in any fiscal year, up to, but not in excess of,
an amount equal to 20% of Consolidated Total Assets, as
determined at the end of the fiscal quarter ended
immediately prior to the date on which any such investment
is proposed to be made, to acquire capital stock of, or all
or any substantial portion of the assets of, any other
Person, or of any division or line of business of any other
Person, which Person, or division of such Person, is engaged
in, or such line of business constitutes, a line or lines of
business other than sporting goods, sports or fitness clubs,
sports or leisure services, leisure products, footwear,
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sportswear apparel or sports, health or fitness television
or other media programming or one or more television
networks carrying primarily such programming.
(e) Compliance with ERISA. (i) Terminate, or
permit any ERISA Affiliate to terminate, any Plan so as to
result in any material liability of the Borrower or any
ERISA Affiliate to the PBGC or (ii) permit to exist any
occurrence of any Reportable Event (as defined in Title IV
of ERISA), or any other event or condition, that presents a
material risk of such a termination by the PBGC of any Plan
which would result in material liability of the Borrower or
any ERISA Affiliate to the PBGC.
(f) Accounting Changes. Make or permit, or
permit any of its Subsidiaries to make or permit, any change
in accounting policies affecting the presentation of
financial statements or reporting practices, except as
required or permitted by GAAP.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal
of any Loan when the same becomes due and payable, or fail
to pay, and such failure shall continue for three (3)
Business Days, any interest on any Loan or any Fees or other
amounts payable hereunder to the Administrative Agent or any
Lender when the same becomes due and payable; or
(b) Any representation or warranty made by the
Borrower under or in connection herewith shall prove to have
been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section
5.01(c), 5.01(d), 5.01(i), 5.01(j), 5.01(k), or 5.02 of this
Agreement; or
(ii) The Borrower shall fail to perform any
other term, covenant or agreement contained herein on its
part to be performed or observed if such failure shall
remain unremedied for 30 days after written notice thereof
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shall have been given to the Borrower by the Administrative
Agent; or
(d) The Borrower or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on or any
other amount payable in respect of any Debt that is
outstanding in a principal amount of at least $10,000,000 in
the aggregate (but excluding Debt outstanding hereunder) of
the Borrower or such Subsidiary (as the case may be), when
the same becomes due and payable (whether, by scheduled
maturity, required prepayment, acceleration, demand or
otherwise); or any other event shall occur or condition
shall exist under any agreement or instrument relating to
any such Debt, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the
maturity of such Debt, or any such Debt shall be declared to
be due and payable or required to be prepaid, redeemed,
purchased or defeased (other than by a regularly scheduled
required prepayment, redemption, purchase or defeasance), or
an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the
stated maturity thereof, or the principal of any such Debt
is not repaid in full upon the maturity thereof or in full
or in part pursuant to any regularly scheduled required
prepayment, redemption, repurchase or defeasance; or
(e) (i) The Borrower or any of its Subsidiaries
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; (ii) any proceeding shall be
instituted by the Borrower or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property; (iii) there shall be
commenced against the Borrower or any of its Subsidiaries
any proceeding referred to in clause (ii) which results in
the entry of an order for relief or any such adjudication or
appointment or remains undismissed, undischarged or unbonded
for a period of 45 days; or (iv) the Borrower or any of its
Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this Section 6.01(e);
or
(f) Any judgment or order for the payment of
money in excess of $10,000,000 that is not covered by
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insurance shall be rendered against the Borrower or any of
its Subsidiaries and there shall be any period of 30
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, unless such judgment or
order shall have been vacated or satisfied, or dismissed or
bonded pending appeal, or, in the case of a judgment or
order the entire amount of which is covered by insurance, is
the subject of a binding agreement with the plaintiff and
the insurer covering payment therefor; or
(g) Any non-monetary judgment or order shall be
rendered against the Borrower or any of its Subsidiaries
that is reasonably likely to have a material adverse effect
on (i) the business, condition (financial or otherwise),
operations, performance or properties of the Borrower or of
the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of the Borrower to perform its obligations
hereunder, or (iii) the rights and remedies of the
Administrative Agent or the Lenders hereunder, and there
shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect unless
such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or
(h) Any Person or group of related Persons (other
than (i) RBK Holdings, only with respect to stock treated as
treasury stock and (ii) Paul Fireman and his immediate
family or his estate, heirs, executor, administrator or
personal representative or a trust for the benefit of any of
them or a corporation that is wholly-owned, beneficially and
of record, by one or more of them, in either case so long as
one or more of such Persons has the sole right to vote stock
so held (collectively, the "Fireman Group")) shall at any
time, for any reason, (A) beneficially own, directly or
indirectly, 30% (or, if higher, the percentage of the
outstanding capital stock of the Borrower owned at the
applicable time by the Fireman Group) or more of the
outstanding capital stock of the Borrower having voting
power under ordinary circumstances to elect the Board of
Directors of the Borrower or (B) have the power, directly or
indirectly, to direct or cause the direction of the
management and policies of the Borrower; or
(i) Any ERISA Event shall have occurred with
respect to a Plan and (i) liability arising from or relating
to such ERISA Event shall not be paid within 30 days after
such occurrence unless the same is disputed in good faith by
appropriate proceedings and (ii) the sum (determined as of
the date of occurrence of such ERISA Event) of such unpaid
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liability and all other unpaid liabilities arising from or
relating to ERISA Events which shall have occurred or exist
with respect to any Plan is equal to or greater than
$10,000,000; or
(j) Any of Borrower or any of its ERISA
Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan that is not satisfied within 30
days after the same becomes due (unless the same is timely
disputed in good faith by appropriate proceedings) and the
sum (determined as of the date of such notification) of such
amount and all other amounts required to be paid to
Multiemployer Plans by such ERISA Affiliates in satisfaction
of unpaid Withdrawal Liabilities (determined as of the date
of such notification) exceeds $10,000,000; or
(k) The Borrower or any ERISA Affiliate shall
have committed a failure described in Section 302(f)(1) of
ERISA and the amount determined under Section 302(f)(3) of
ERISA is equal to or greater than $10,000,000;
then, and in any such event (other than such an event
described in Section 6.01(e) with respect to the Borrower),
the Administrative Agent (i) shall at the request, or may
with the consent, of the Required Lenders, by notice to the
Borrower, declare the Commitment of each Lender to make
Loans to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower,
declare the Loans, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and
payable, and thereupon the Loans, all such interest and all
such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the
Borrower. If an Event of Default occurs under
Section 6.01(e) with respect to the Borrower, then the
Commitments shall automatically and immediately terminate,
and the obligation of the Lenders to make any Loan
hereunder, thereupon shall cease, and the unpaid principal
amount of and any accrued interest on all of the Loans
automatically shall become due and payable, without
presentment, demand, protest, notice or other requirements
of any kind, all of which are hereby expressly waived by the
Borrower.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each
Lender hereby appoints and authorizes the Administrative
Agent to take such action as Administrative Agent on its
behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not
expressly provided for hereby (including, without
limitation, enforcement or collection of the Debt resulting
from the Loans), the Administrative Agent shall not be
required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and
such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not
be required to take any action that exposes the
Administrative Agent to personal liability or that is
contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender (i)
prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement, and (ii) a copy of
any such notice given by the Borrower, if such Lender so
requests.
SECTION 7.02. Administrative Agent's Reliance,
Etc. Neither the Administrative Agent, the Arranger or any
of their directors, officers, Administrative Agents or
employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection herewith,
except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the
Lender that made any Loan as the holder of the Debt
resulting therefrom until the Administrative Agent receives
and accepts an Assignment and Acceptance entered into by
such Lender, as assignor, and its assignee, as provided in
Section 8.07; (ii) may consult with legal counsel,
independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) and
the Arranger make no warranty or representation to any
Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in
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connection herewith; (iv) and the Arranger shall not have
any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions
hereof on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower;
(v) and the Arranger shall not be responsible to any Lender
for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value hereof or any other
instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect hereof by
acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy,
cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 7.03. Credit Suisse and Affiliates.
With respect to its Commitment and the Loans made by it,
Credit Suisse shall have the same rights and powers
hereunder as any other Lender and may exercise the same as
though it were not the Administrative Agent and the
Arranger; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Credit Suisse in its
individual capacity. Credit Suisse and its Affiliates may
accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do
business with or own securities of the Borrower or any such
Subsidiary, all as if Credit Suisse were not the
Administrative Agent and the Arranger and without any duty
to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each
Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or the Arranger or
any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or the
Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree
to indemnify the Administrative Agent and the Arranger (to
the extent not promptly reimbursed by the Borrower), ratably
according to the respective principal amounts of the Loans
then owing to each of them (or if no Loans are at the time
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outstanding or if any Loans are then owing to Persons that
are not Lenders, ratably according to the respective amounts
of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against the Administrative Agent or
the Arranger in any way relating hereto or arising hereunder
or any action taken or omitted by the Administrative Agent
or the Arranger hereunder; provided, however, that no Lender
shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Administrative Agent's or the Arranger's gross negligence or
willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent or
the Arranger promptly upon demand for its ratable share of
any costs and expenses payable by the Borrower under Section
8.04, to the extent that the Administrative Agent or the
Arranger is not promptly reimbursed for such costs and
expenses by the Borrower.
SECTION 7.06. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor
Administrative Agent, which shall be a Lender or, if no
Lender consents to act as Administrative Agent hereunder, a
financial institution approved by the Borrower, and as to
which the Borrower will not unreasonably withhold its
approval. If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the laws of
(or having a lending branch within) the United States of
America or of any State thereof and having a combined
capital and surplus of at least $50,000,000 which is
acceptable to the Borrower, and as to which the Borrower
will not unreasonably withhold its approval. Upon the
acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged
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from its duties and obligations hereunder. After any
0retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this
Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to
any departure by the Borrower therefrom, shall in any event
be effective unless the same shall be in writing and such
amendment, waiver or consent shall be consented to in one or
more writings signed by or consented to by the Required
Lenders, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by or
consented to by all the Lenders, do any of the following:
(i) waive any of the conditions specified in (x) Section
3.01, (y) in the case of the initial Borrowing,
Section 3.02, or (z) Section 3.03, (ii) change the
definition of the term "Required Lenders", the percentage of
the Commitments or of the aggregate unpaid principal amount
of the Loans, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action
hereunder, (iii) amend this Section 8.01, (iv) increase the
Commitments of the Lenders or subject the Lenders to any
additional obligations, (v) reduce the principal of, or
interest on, the Loans or any fees or other amounts payable
hereunder or (vi) postpone any date fixed for any payment of
principal of, or interest on, the Loans or any fees or other
amounts payable hereunder; provided, however, that no
amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under this
Agreement.
SECTION 8.02. Notices, Etc. All notices, demands
and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy, telex or cable
communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered:
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if to the Borrower: Reebok International Ltd.
100 Technology Center Drive
Stoughton, Massachusetts 02072
Attn: Treasurer
if to any Lender
signatory hereto: at its Domestic Lending Office
specified opposite its name on
Schedule I hereto
if to any other Lender: at its Domestic Lending Office
specified in the Assignment and
Acceptance pursuant to which it
became a Lender
if to the 12 East 49th Street
Administrative Agent: New York, New York 10017
Attention: Administrative
Assistant -- Syndications
Department, Credit Suisse/Ref.:
Reebok
or, as to each party, at such other address as shall be
designated by such party in a written notice to the other
parties. All such notices and communications shall be
effective (i) when received, if mailed or delivered, or
(ii) when delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to
the cable company, respectively, except that notices and
communications to the Administrative Agent pursuant to
Article II, III or VII shall not be effective until received
by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on
the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The
Borrower agrees to pay on demand (i) all reasonable out-of-
pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery,
administration, modification and amendment hereof
(including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and
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expenses and (B) the reasonable fees and expenses of counsel
for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection
or preservation of rights or interests, hereunder and with
respect to negotiations with the Borrower regarding any
Default or any events or circumstances that may give rise to
a Default), (ii) all reasonable out-of-pocket costs and
expenses of the Arranger in connection herewith, including,
without limitation, expenses of the type described in
clauses (i)(A) and (i)(B) above, and (iii) all costs and
expenses of the Administrative Agent and the Lenders in
connection with the enforcement hereof, whether in any
action, suit or litigation, any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights
generally or otherwise (including, without limitation, the
reasonable fees and expenses of counsel for the
Administrative Agent and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold
harmless the Administrative Agent and each Lender and each
of their Affiliates and their respective officers,
directors, employees, Administrative Agents and advisors
(each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses
of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of
or in connection with this Agreement or the transactions
contemplated hereby or thereby, whether or not an
Indemnified Party is a party thereto and whether or not the
transactions contemplated hereby are consummated, except to
the extent such claim, damage, loss, liability or expense
(i) is found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct
or (ii) arises from any legal proceeding brought against a
Lender by or on behalf of the Borrower in which such Lender
is found in a final, non-appealable judgment by a court of
competent jurisdiction to have failed to perform its
obligations under Section 2.01 hereof or (iii) arises from
any legal proceedings commenced against any Lender by any
other Lender or the Administrative Agent.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of
Default and (b) the making of the request or the granting of
the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Loans due and payable
pursuant to the provisions of Section 6.01, each Lender is
hereby authorized at any time and from time to time, to the
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fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Lender or any bank
controlling such Lender to or for the credit or the account
of the Borrower against any and all of the Obligations of
the Borrower now or hereafter existing under this Agreement,
irrespective of whether such Lender shall have made any
demand under this Agreement and although such obligations
may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such
Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section
are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such
Lender may have.
SECTION 8.06. Binding Effect. This Agreement
shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender
that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not
have the right to assign its rights or obligations hereunder
or any interest herein without the prior written consent of
the Lenders and the Lenders may assign their respective
rights or obligations hereunder or any interest herein only
in accordance with Section 8.07.
SECTION 8.07. Assignments and Participations.
(a) Each Lender may assign to one or more banks
or other entities all or a portion of its rights and
obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Loans
owing to it); provided, however, that (i) the parties to
each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $2,500, (ii) the Borrower
shall have consented to such assignment, such consent not to
be unreasonably withheld (such consent shall not be required
(x) if the Assignee shall be a Lender under this Agreement
at the time immediately preceding such assignment or (y) as
set forth in the last sentence of this subsection 8.07(a)),
(iii) the Commitment amount of the assigning Lender being
assigned shall in no event be less than the lesser of
(x) the entire Commitment of such Lender at such time or
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(y) $13,333,333.33 and (iv) such assignment shall be
effected contemporaneously with an assignment to the same
bank or other entity of a constant percentage of all of the
assigning Lender's rights and obligations under and in
respect of that certain five-year $100,000,000 Loan
Agreement dated as of even date herewith among the Borrower,
the Lenders, the Administrative Agent and the Arranger.
Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at
least five Business Days after the delivery thereof to the
Administrative Agent or, if so specified in such Assignment
and Acceptance, the date of acceptance thereof by the
Administrative Agent, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto, except that such Lender shall continue to be an
"Indemnified Party" under Section 8.04(b)). Notwithstanding
any of the foregoing or any other provision herein, any
Lender may at any time (without the consent of the Borrower
being required) assign all or any portion of its rights
under this Agreement including, without limitation, its
Loans, to (i) a Federal Reserve Bank as collateral in
accordance with Regulation A of the Board of Governors of
the Federal Reserve System and the applicable circular of
such Federal Reserve Bank or (ii) any Affiliate of such
Lender (provided, that for purposes of this Section 8.07(a)
only, the amount "5%" set forth in the definition of
"Affiliate" shall be deemed to be "51%"). In order to
facilitate an assignment to a Federal Reserve Bank in
accordance with clause (i) of the previous sentence, the
Borrower shall, at the request of the assigning Lender,
promptly execute and deliver to such assigning Lender a
note, in a form reasonably acceptable to the Administrative
Agent and the Borrower, evidencing the Loans made to the
Borrower by the assigning Lender hereunder.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender
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makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its
Subsidiaries or the performance or observance by the
Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at
its address referred to in Section 8.02 a copy of each
Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and its assignee,
the Administrative Agent shall, if such Assignment and
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Acceptance has been completed and is in substantially the
form of Exhibit A hereto and relates to an assignment that
complies with Section 8.07(a), (i) accept such Assignment
and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof
to the Borrower.
(e) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of
its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments and
the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement,
and (iv) no participant under such participation shall have
any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent
that such amendment, waiver or consent would reduce the
principal of or interest on the Loans or any fees or other
amounts payable hereunder, in each case to the extent
subject to such participation, or postpone any date fixed
for any payment of principal of or interest on the Loans or
any fees or other amounts payable hereunder, in each case to
the extent subject to such participation.
(f) Any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant,
any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided, however,
that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree
to preserve the confidentiality of any confidential
information relating to the Borrower received by it from
such Lender.
SECTION 8.08. Confidentiality. Each Lender
agrees to maintain any Confidential Information that it may
receive from the Borrower or one of its Subsidiaries
pursuant to this Agreement confidential and that it shall
not disclose such information to third parties without the
prior consent of the Borrower, except for disclosure:
(a) to legal counsel, accountants and other professional
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advisors to the Lender; (b) to regulatory officials having
jurisdiction over the Lender; (c) as required by law or
legal process or in connection with any legal proceeding to
which the Lender is a party or is otherwise subject; and
(d) to another financial institution in connection with a
disposition or proposed disposition of all or part of a
Lender's interests hereunder, whether by participation,
assignment or other transfer, which financial institution
shall have agreed in writing to be subject to the
confidentiality provisions of this Section 8.08.
SECTION 8.09. Governing Law; Submission to
Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
(b) The Borrower hereby expressly and irrevocably
agrees and consents that any suit, action or proceeding
arising out of or relating to this Agreement and the
transactions contemplated herein may be instituted by the
Administrative Agent or any Lender in any State or Federal
court sitting in the County of New York, State of New York,
United States of America and, by the execution and delivery
of this Agreement, the Borrower expressly waives any
objection that it may have now or hereafter to the laying of
the venue or to the jurisdiction of any such suit, action or
proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any
such suit, action or proceeding.
(c) The Borrower agrees that service of process
may be made on the Borrower by personal service of a copy of
the summons and complaint or other legal process in any such
suit, action or proceeding, or by registered or certified
mail (postage prepaid) to the address of the Borrower
specified in Section 8.02, or by any other method of service
provided for under the applicable laws in effect in the
State of New York.
(d) Nothing contained in subsections (b) or (c)
hereof shall preclude the Administrative Agent, the Arranger
or any Lender from bringing any suit, action or proceeding
arising out of or relating to this Agreement or the other
Loan Documents in the courts of any place where the Borrower
or any of the Borrower's property or assets may be found or
located. To the extent permitted by the applicable laws of
any such jurisdiction, the Borrower hereby irrevocably
submits to the jurisdiction of any such court and expressly
waives, in respect of any such suit, action or proceeding,
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the jurisdiction of any other court or courts which now or
hereafter, by reason of its present or future domicile, or
otherwise, may be available to it.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS
AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED
IN CONNECTION HEREWITH, THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ARRANGER AND EACH LENDER EACH HEREBY AGREES, TO
THE EXTENT PERMITTED BY LAW, THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING HERETO OR TO THE TRANSACTIONS
CONTEMPLATED HEREBY; AND THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ARRANGER AND EACH LENDER EACH HEREBY WAIVES, TO
THE EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY HAVE
THAT SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 8.10. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
REEBOK
INTERNATIONAL LTD.,
as Borrower
By: /S/ PAUL R. DUNCAN
Name: Paul R. Duncan
Title: Executive Vice President
and Chief Financial Officer
CREDIT SUISSE, as
Administrative Agent and as
Arranger
By: /S/ LYNN ALLEGAERT
Name: Lynn Allegaert
Title:Member of SeniorManagement
By: /S/ MATT MOSER
Name: Matt Moser
Title: Associate
Lenders:
CREDIT SUISSE
By: /S/ LYNN ALLEGAERT
Name: Lynn Allegaert
Title:Member of SeniorManagement
By: /S/ MATT MOSER
Name: Matt Moser
Title: Associate
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ABN AMRO BANK N.V.
By: /S/ JAMES E. DAVIS
Name: James E. Davis
Title: Vice President
By: /S/ E.O. MAY
Name: E.O. May
Title: GVP
CIBC, INC.
By: /S/ JUDITH DOMKOWSKI
Name: Judith Domkowski
Title: VP
CITIBANK, N.A.
By: /S/ W. DWIGHT RAIFORD
Name: W. Dwight Raiford
Title: V.P.
CREDIT LYONNAIS NEW YORK
BRANCH
By: /S/ ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Senior Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By: /S/ ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Authorized Signature
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ISTITUTO BANCARIO SAN PAOLO DI
TORINO
By: /S/ GERARD M. MCKENNA
Name: Gerard M. McKenna
Title: Vice President
STANDARD CHARTERED BANK
By: /S/ DAVID GODWIN
Name: David Godwin
Title: Vice President
THE BANK OF TOKYO TRUST
COMPANY
By: /S/ MICHAEL J. CRONIN
Name: Michael J. Cronin
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON
By: /S/ RICHARD D. HILL, JR.
Name: Richard D. Hill, Jr.
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By: /S/ LINDA M. HARRIS
Name: Linda M. Harris
Title: SVP
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$100,000,000
LOAN AGREEMENT
dated as of November 1, 1994
among
REEBOK INTERNATIONAL LTD.
as Borrower
and
THE BANKS NAMED HEREIN
as Lenders
and
CREDIT SUISSE
as Administrative Agent
and as Arranger
PAGE
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Certain Defined Terms ............................ 1
1.02 Computation of Time Periods ...................... 17
1.03 Accounting Terms ................................. 17
1.04 Construction ..................................... 17
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01 The Facility ..................................... 18
(a) Revolving Loans and Swing Line
Loans .............................. 18
(b) Bid Rate Loans ..................... 19
(c) Eurodollar Rate Loans .............. 23
(d) Authorized Persons ................. 23
(e) Notice Irrevocable ................. 23
(f) Funding ............................ 24
(g) Several Obligations ................ 24
(h) Use of Proceeds .................... 24
2.02 Interest ......................................... 25
(a) Base Rate Loans .................... 25
(b) Eurodollar Rate Loans .............. 25
(c) Bid Rate Loans ..................... 25
(d) Default Interest ................... 25
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Section Page
2.03 Conversion of Loans; Continuation of Eurodollar
Rate Loans ....................................... 26
(a) Optional Conversion;
Continuation ....................... 26
(b) Mandatory Conversion ............... 27
2.04 Fees ............................................. 27
(a) Facility Fee ....................... 27
(b) Administrative Agent's Fees ........ 28
(c) Payment; Fees Fully Earned ......... 28
2.05 Reduction of the Commitments; Prepayment and
Repayment ........................................ 28
(a) Optional Facility Reduction ........ 28
(b) Facility Termination ............... 29
(c) Optional Prepayment ................ 29
(d) Mandatory Prepayment ............... 29
(e) Repayment .......................... 29
2.06 Increased Costs, Etc. ............................ 30
(a) Increased Cost ..................... 30
(b) Capital ............................ 31
(c) Unavailability or Inadequacy of
Eurodollar Rate .................... 32
(d) Illegality ......................... 32
2.07 Taxes ............................................ 33
(a) No Withholding ..................... 33
(b) Other Taxes ........................ 34
(c) Indemnity .......................... 34
(d) Evidence of Payment ................ 35
(e) Change of Lending Office ......... 35
ii
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Section Page
(f) Survival of Covenant ............... 35
2.08 Replacement of Lender in Event of Adverse
Condition ........................................ 35
2.09 Payments ......................................... 36
(a) Time for Payment ................... 36
(b) Computation ........................ 36
(c) Distribution of Payments ........... 37
(d) Interest on Overdue Payment ........ 37
2.10 Sharing of Payments, Etc. ........................ 37
2.11 Compensation for Funding Losses .................. 38
2.12 Pro Rata Treatment ............................... 38
2.13 Evidence of Debt ................................. 39
ARTICLE III
CONDITIONS OF LENDING
3.01 Conditions Precedent to Initial Borrowing ........ 39
3.02 Conditions Precedent to Each Borrowing ........... 42
3.03 Determinations Under Section 3.01 ................ 43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of the Borrower ... 43
ARTICLE V
COVENANTS OF THE BORROWER
5.01 Affirmative Covenants ............................ 48
(a) Compliance with Laws, Etc. ......... 48
(b) Payment of Taxes, Etc. ............. 48
(c) Maintenance of Insurance ........... 48
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Section Page
(d) Preservation of Corporate
Existence, Etc. .................... 48
(e) Visitation Rights .................. 49
(f) Keeping of Books ................... 49
(g) Maintenance of Properties,
Etc. ............................... 49
(h) Transactions with Affiliates ....... 49
(i) Maintenance of Consolidated Net
Worth .............................. 49
(j) Maintenance of Leverage Ratio ...... 49
(k) Maintenance of Interest
Coverage Ratio ..................... 49
(l) Reporting Requirements ............. 50
5.02 Negative Covenants ............................... 52
(a) Liens, Etc. ........................ 53
(b) Mergers, Etc. ...................... 53
(c) Sales, Etc. of Assets .............. 53
(d) Change in Nature of Business ....... 54
(e) Compliance with ERISA .............. 55
(f) Accounting Changes ................. 55
ARTICLE VI
EVENTS OF DEFAULT
6.01 Events of Default ................................ 55
ARTICLE VII
THE ADMINISTRATIVE AGENT
7.01 Authorization and Action ......................... 59
7.02 Administrative Agent's Reliance, Etc. ............ 59
7.03 Credit Suisse and Affiliates ..................... 60
iv
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Section Page
7.04 Lender Credit Decision ........................... 60
7.05 Indemnification .................................. 60
7.06 Successor Administrative Agent ................... 61
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments, Etc. ................................. 62
8.02 Notices, Etc. .................................... 62
8.03 No Waiver; Remedies .............................. 63
8.04 Costs and Expenses ............................... 63
8.05 Right of Set-off ................................. 64
8.06 Binding Effect ................................... 65
8.07 Assignments and Participations ................... 65
8.08 Confidentiality .................................. 68
8.09 Governing Law; Submission to Jurisdiction ........ 69
8.10 Execution in Counterparts ........................ 70
v
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List of Schedules
Schedule I -- Domestic and Eurodollar
Lending Offices of Lenders;
Commitments
Schedule 4.01(b) -- Subsidiaries of the
Borrower
Schedule 4.01(h) -- Pending or Threatened
Litigation
Schedule 5.02(a) -- Existing Liens
List of Exhibits
Exhibit A -- Form of Assignment and
Acceptance
Exhibit B-1 -- Form of Notice of Borrowing
of Revolving Loans or Swing
Line Loans
Exhibit B-2 -- Form of Notice of Bid Rate
Borrowing
Exhibit C -- Form of Opinion of Ropes &
Gray, counsel to the
Borrower
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LOAN AGREEMENT
LOAN AGREEMENT dated as of November 1, 1994 (as
amended, supplemented or modified from time to time, this
"Agreement") among REEBOK INTERNATIONAL LTD., a
Massachusetts corporation (the "Borrower"), the banks and
financial institutions listed on the signature pages hereof
and any Additional Lender Agreement (as hereinafter defined)
(together with their respective permitted assignees, the
"Lenders"), and CREDIT SUISSE, a bank organized under the
laws of Switzerland ("Credit Suisse"), as Administrative
Agent for the Lenders (in such capacity, together with any
successor appointed pursuant to Article VII, the
"Administrative Agent"), and CREDIT SUISSE, as Arranger
("Arranger").
R E C I T A L S
WHEREAS, the Borrower has requested that the
Lenders make available to the Borrower revolving credit
loans in an aggregate principal amount not to exceed
$100,000,000 at any time outstanding to be used for general
corporate purposes of the Borrower and to provide working
capital for the Borrower, and the Lenders have agreed to
make such loans upon the terms and subject to the conditions
set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants and agreements contained herein,
the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in
this Agreement, each of the following terms shall have the
meaning ascribed thereto below (such meaning to be
applicable to both the singular and plural forms of the term
defined):
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"Affiliate" means, as to any Person, any other
Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person or is a
director or officer of such Person. For purposes of this
definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power (whether or not exercised) to vote 5% or more
of the securities having ordinary voting power for the
election of directors of such Person or to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by
contract or otherwise.
"Administrative Agent" has the meaning specified
in the preamble to this Agreement.
"Administrative Agent's Account" means the account
of the Administrative Agent maintained by the Administrative
Agent at its office at One Liberty Plaza, 165 Broadway, New
York, New York 10006, Account No. 904996602, Attention:
Loan Department/Ref.: Reebok.
"Administrative Agent's Fee" has the meaning
specified in Section 2.04(b).
"Agreement" has the meaning specified in the
preamble hereto.
"Applicable Lending Office" means, with respect to
each Lender, such Lender's Domestic Lending Office in the
case of a Base Rate Loan and such Lender's Eurodollar
Lending Office in the case of a Eurodollar Rate Loan (and
the office specified in writing by such Lender in the case
of a Bid Rate Loan).
"Applicable Margin" means (i) 0.225% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least AA- by S&P and Aa3 by Moody's, (ii) 0.26% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least A- by S&P and A3 by Moody's, (iii) 0.28% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least BBB+ by S&P and Baa1 by Moody's, (iv) 0.35% so long as
Senior Unsecured Debt of the Borrower shall be rated at
least BBB- by S&P and Baa3 by Moody's and (v) 0.60% at any
other time (including, without limitation, any time that
there shall be Senior Unsecured Debt of the Borrower
outstanding and not rated by both S&P and Moody's); provided
that if there shall be no Senior Unsecured Debt of the
Borrower outstanding at any time, the Applicable Margin
shall be determined by reference to the most recent
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previously existing ratings of Senior Unsecured Debt of the
Borrower.
"Arranger" has the meaning specified in the
preamble to this Agreement.
"Assignment and Acceptance" means an assignment
and acceptance made by a Lender and an assignee of such
Lender, and accepted by the Administrative Agent, in
substantially the form of Exhibit A hereto.
"Base Rate" means, on any date, a rate equal to
the higher of (a) the Federal Funds Rate plus one-half of
one percent (0.50%) per annum or (b) the rate of interest
per annum from time to time announced by the Administrative
Agent as its base lending rate for commercial loans made in
the United States, each as in effect on such date. The base
lending rate is not necessarily the lowest rate of interest
charged by the Administrative Agent in connection with
extensions of credit.
"Base Rate Loan" means a Loan that bears interest
as provided in Section 2.02(a).
"Bid Rate Borrowing" means a borrowing consisting
of Bid Rate Loans made on the same day pursuant to the same
Notice of Bid Rate Borrowing by each of the Lenders whose
offer to make one or more Bid Rate Loans as part of such
borrowing has been accepted by the Borrower under the
auction bidding procedure described in Section 2.01(b).
"Bid Rate Loan" means a loan by a Lender to the
Borrower resulting from the auction bidding procedure
described in Section 2.01(b).
"Board of Directors" of any corporation means the
Board of Directors of such corporation or a duly constituted
committee thereof having authority over matters to which the
action proposed to be taken or authorized relates.
"Borrower" has the meaning specified in the
preamble to this Agreement.
"Borrower's Account" means the account of the
Borrower maintained by the Borrower with Credit Suisse at
its office at One Liberty Plaza, 165 Broadway, New York, New
York 10006 Account No. 32878201.
"Borrowing" means a borrowing consisting of Loans
of the same Type having, in the case of Eurodollar Rate
Loans, the same Interest Period or Loans Continued as or
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Converted into Eurodollar Rate Loans having the same
Interest Period, on the same day.
"Business Day" means a day of the year on which
banks are not required or authorized to close in New York
City and, if the applicable Business Day relates to the
making of, Continuation of or Conversion into Eurodollar
Rate Loans, a day on which dealings also are carried on in
the London interbank market for deposits in United States
dollars.
"Capitalized Lease" means any lease of (or other
agreement conveying the right to use) property, whether
real, personal or mixed, by a Person, as lessee or
guarantor, which would, in conformity with GAAP, be required
to be accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" means all
obligations under Capitalized Leases of a Person that would,
in conformity with GAAP, be classified as liabilities on a
balance sheet of that Person.
"Closing Date" means November 1, 1994.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commitment" means, in the case of Revolving Loans
and Swing Line Loans, with respect to each Lender that is
signatory hereto, the amount set forth opposite such
Lender's name on Schedule I or, if such Lender has entered
into one or more Assignments and Acceptances, and with
respect to each other Lender, the amount set forth for such
Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as such Lender's
"Commitment", in each case as the same may be reduced
pursuant to Section 2.05.
"Commitment Termination Date" has the meaning
specified in Section 2.05(b).
"Confidential Information" means any non-public
information about the Borrower and/or any of its
Subsidiaries furnished by the Borrower and/or any of its
Subsidiaries to any Lender, other than any information which
(i) was publicly known or otherwise known to any such Lender
at the time of disclosure, (ii) subsequently becomes
publicly known through no act or omission of any such
Lender, or (iii) becomes known to any Lender otherwise than
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through disclosure by the Borrower and/or any of its
Subsidiaries to such Lender.
"Consolidated Current Assets" means, on any date
of determination thereof, all assets of the Borrower and its
Subsidiaries, on a consolidated basis, that, in accordance
with GAAP, are required to be classified as current assets
on such date, after deducting adequate reserves in each case
in which a reserve is proper in accordance with GAAP.
"Consolidated Current Liabilities" means, on any
date of determination thereof, all items that, in accordance
with GAAP, are required to be classified as current
liabilities of the Borrower and its Subsidiaries, on a
consolidated basis, on such date, including, without
limitation, the current portion of long-term Debt.
"Consolidated Interest Expense" means, for any
fiscal period of the Borrower, consolidated interest expense
of the Borrower and its Subsidiaries, including the portion
of Capitalized Leases attributable to interest in such
period, but without deduction or allowance for interest
income.
"Consolidated Net Income" means, for any fiscal
period of the Borrower, the consolidated net income (or
loss) of the Borrower and its Subsidiaries for such period
taken as a single accounting period determined in conformity
with GAAP, provided that there shall be excluded therefrom
(i) the income (or loss) of any Person (other than
Subsidiaries of the Borrower) in which any other Person
(other than the Borrower or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the
Borrower or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of or is merged
into or consolidated with the Borrower or any of its
Subsidiaries or that Person's assets are acquired by the
Borrower or its Subsidiaries and (iii) the income of any
Subsidiary of the Borrower to the extent that the
declaration or payment of dividends or similar distributions
by that Subsidiary is not at the time permitted by operation
of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
"Consolidated Net Worth" means, on any date of
determination thereof, the excess of Consolidated Total
Assets over Consolidated Total Liabilities, provided that
there shall be deducted therefrom, with respect to each
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Subsidiary that is not wholly-owned, directly or indirectly,
by the Borrower, an amount (if greater than zero) equal to
the product of (a) stockholders' equity of such Subsidiary
determined in conformity with GAAP multiplied by (b) the
percentage of common equity or its equivalent of such
Subsidiary not owned by the Borrower or another Subsidiary
of the Borrower, expressed as a decimal.
"Consolidated Total Assets" means, on any date of
determination thereof, total assets of the Borrower and its
Subsidiaries, determined in conformity with GAAP.
"Consolidated Total Liabilities" means, on any
date of determination thereof, total liabilities of the
Borrower and its Subsidiaries, determined in conformity with
GAAP, including without limitation, Debt, trade payables,
accrued liabilities and contingent liabilities, to the
extent required to be reflected as liabilities on a
consolidated balance sheet of the Borrower and its
Subsidiaries prepared in conformity with GAAP.
"Contingent Obligation" means, as to any Person,
any obligation, direct or indirect, contingent or otherwise,
of such Person (i) with respect to any Debt or other
obligation or liability of another Person, including without
limitation any direct or indirect guaranty of such Debt,
obligation or liability, endorsement (other than for
collection or deposit in the ordinary course of business)
thereof or discount or sale thereof by such Person with
recourse to such Person, or any other direct or indirect
obligation, by agreement or otherwise, to purchase or
repurchase any such Debt, obligation or liability or any
security therefor, or to provide funds for the payment or
discharge of any such Debt, obligation or liability (whether
in the form of loans, advances, stock purchases, capital
contributions or otherwise), (ii) to provide funds to
maintain working capital or equity capital of another Person
or otherwise to maintain the net worth, solvency or
financial condition of such other Person, (iii) to make
payment for any products, property, securities or services
regardless of delivery or non-delivery thereof, if the
purpose of any such agreement so to do is to provide
assurance that another Person's Debt, obligation or
liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders
of another Person's Debt, obligation or liability will be
protected (in whole or in part) against loss in respect
thereof, or (iv) otherwise to assure or hold harmless the
holders of Debt or other obligation or liability of another
Person against loss in respect thereof; provided, however,
that any guaranty or agreement in the nature of guaranty
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made by the Borrower in respect of obligations of a
Subsidiary of the Borrower under or in respect of a trade
letter of credit shall constitute a Contingent Obligation
only if and to the extent that (i) such obligations
constitute Debt of such Subsidiary or (ii) the Borrower's
obligations in respect of such guaranty are required to be
reflected as liabilities on a consolidated balance sheet of
the Borrower and its Subsidiaries prepared in accordance
with GAAP. The amount of any Contingent Obligation shall be
an amount equal to the amount of the Debt, obligation or
liability guaranteed or otherwise supported thereby, without
regard to any right of reimbursement, contribution or
indemnity.
"Continuation" or "Continue" each refers to the
continuation, upon expiration of an Interest Period with
respect thereto, of Eurodollar Rate Loans constituting part
of the same Borrowing as Eurodollar Rate Loans for a
successive Interest Period pursuant to Section 2.03.
"Conversion", "Convert" and "Converted" each
refers to a conversion of Loans of one Type into Loans of
the other Type pursuant to Section 2.03.
"Debt" of any Person means, without duplication,
(i) all obligations of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all
obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
and trade letters of credit (other than such letters of
credit included in "Debt" by operation of clause (vi)
hereof), and other similar accrued current liabilities in
respect of such obligations, arising in the ordinary course
of business; (iv) all Capitalized Lease Obligations of such
Person; (v) all obligations or liabilities of others secured
by a lien on any asset owned by such Person, whether or not
such obligation or liability is assumed by such Person;
(vi) all obligations of such Person, contingent or
otherwise, in respect of letters of credit or bankers'
acceptances to the extent that such obligations are required
to be reflected as liabilities on a consolidated balance
sheet of such Person prepared in accordance with GAAP, and
(vii) all Contingent Obligations reflected in footnotes to
the financial statements of such Person.
"Default" means any Event of Default or any event
that would, with the giving of notice or the lapse of time
or both, constitute an Event of Default.
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"Domestic Lending Office" means, with respect to
any Lender, the office of such Lender specified as its
"Domestic Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance or Additional
Lender Agreement pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative
Agent.
"EBIT" means, for any fiscal period of the
Borrower, Consolidated Net Income for such period plus the
sum of (a) Consolidated Interest Expense for such period,
(b) income tax expense of the Borrower and its Subsidiaries
for such period, (c) net extraordinary losses (added as a
positive number) included in such Consolidated Net Income,
and (d) other net losses (added as a positive number)
incurred in such period by the Borrower or any of its
Subsidiaries on the sale of assets other than asset sales in
the ordinary course of business, less the sum of (x) net
extraordinary gains included in Consolidated Net Income,
(y) net gains realized in such period by the Borrower or any
of its Subsidiaries on the sale of assets other than asset
sales in the ordinary course of business, and
(z) extraordinary non-cash credits included in determining
Consolidated Net Income.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for
purposes of Title IV of ERISA is a member of the Borrower's
controlled group, or under common control with the Borrower,
within the meaning of Section 414 of the Code and the
regulations promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day
notice requirement with respect thereto has been waived by
the PBGC; (b) the provision by the administrator of any Plan
of a notice of intent to terminate such Plan in a "distress
termination", pursuant to Section 4041 of ERISA; (c) the
cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by
the Borrower or an ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e) the
failure by the Borrower or any ERISA Affiliate to make a
required payment to a plan which gives rise to liability
under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan requiring the provision of security to
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such Plan, pursuant to Section 307 of ERISA; (g) the
institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition that would constitute grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan; or (h) the
failure to maintain the minimum funding standard required by
Section 412 of the Code with respect to any Plan for a plan
year, or the request or grant of a request for a waiver of
such standard under Section 412(d) of the Code with respect
to any Plan for a plan year.
"Eurocurrency Liabilities" has the meaning
assigned to that term in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to
any Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance or Additional
Lender Agreement pursuant to which it became a Lender (or,
if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period
for Eurodollar Rate Loans comprising part of the same
Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate of interest
determined by the Administrative Agent to be the arithmetic
average (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in United
States dollars are offered by the principal office of any
three (3) of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 a.m. (London
time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Loan comprising part of
such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period, by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period. The Eurodollar Rate
for each Interest Period for each Eurodollar Rate Loan
comprising part of the same Borrowing shall be determined by
the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from
the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions
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of Section 2.06. If three (3) Reference Banks shall be
unable or shall otherwise fail to provide notice of the
applicable rate as contemplated hereby, the Eurodollar Rate
shall be determined on the basis of the rate or rates
provided by the remaining Reference Bank or Reference Banks.
"Eurodollar Rate Loan" means a Loan that bears
interest as provided in Section 2.02(b).
"Eurodollar Rate Reserve Percentage" for any
Interest Period, with respect to each Eurodollar Rate Loan
comprising part of the same Borrowing, means the reserve
percentage (if any) applicable two Business Days before the
first day of such Interest Period under regulations issued
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes
deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined) having a term equal to
such Interest Period.
"Event of Default" has the meaning specified in
Section 6.01.
"Facility" means the aggregate amount of the
Lenders' Commitments as in effect from time to time.
"Facility Fee" has the meaning specified in
Section 2.04(a).
"Federal Funds Rate" means, on any day, the
arithmetic average of the rates quoted to the Administrative
Agent as the prevailing rate per annum (rounded upward to
the nearest whole multiple of 1/100 of 1%, if such average
is not such a multiple) bid at approximately 11:00 a.m. New
York time (or as soon thereafter as is practicable) on such
day by two or more New York Federal Funds dealers of
recognized standing, selected by the Administrative Agent,
for the purchase at face value of Federal Funds in the
secondary market with a maturity of one day.
"Fees" means, collectively, the Administrative
Agent's Fee and the Facility Fee and all other fees payable
to the Administrative Agent or the Arranger pursuant to
written agreement between the Borrower and the
Administrative Agent or the Arranger.
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"Fireman Group" has the meaning specified in
Section 6.01(h).
"GAAP" means generally accepted accounting
principles in the United States of America as in effect as
of the date of, and used in, the preparation of the audited
consolidated financial statements referred to in
Section 4.01(f), except that, with respect to the
preparation of any financial statement required to be
furnished pursuant to clause (ii) or (iii) of
Section 5.01(l), "GAAP" shall mean such principles in the
United States of America as in effect from time to time.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Initial Date" has the meaning specified in
Section 2.07(a).
"Insufficiency" means, with respect to any Plan,
the amount, if any, of its unfunded benefit liabilities
within the meaning of Section 4001(a)(18) of ERISA.
"Interest Coverage Ratio" means, for any period,
the ratio of (i) EBIT to (ii) Consolidated Interest Expense.
"Interest Period" means, for all Eurodollar Rate
Loans that are part of the same Borrowing, the period
commencing on the date of the making of such Eurodollar Rate
Loans or the date of the Conversion of Base Rate Loans into
such Eurodollar Rate Loans, and ending on the last day of
the period selected by the Borrower pursuant to the
provisions hereof and, thereafter upon Continuation of such
Eurodollar Rate Loans, each subsequent period commencing on
the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the
Borrower pursuant to the provisions hereof. The duration of
each Interest Period shall be one (1), two (2), three (3) or
six (6) months (or any other interest period if available
and agreed upon by the Borrower and the Administrative
Agent, but such interest period shall in no event exceed
twelve (12) months) as the Borrower may, upon notice
received by the Administrative Agent not later than 11:00
a.m. (New York City time) on the third Business Day prior to
the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest
Period that ends after the Commitment Termination
Date;
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(b) no more than fifteen (15) different
Interest Periods may be in effect at any one time;
(c) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such
extension would cause the last day of such
Interest Period to occur in the next succeeding
calendar month, the last day of such Interest
Period shall occur on the next preceding Business
Day; and
(d) whenever the first day of any Interest
Period occurs on a day in a calendar month for
which there is no numerically corresponding day in
the calendar month that succeeds such initial
calendar month by the number of months equal to
the number of months in such Interest Period, such
Interest Period shall end on the last Business Day
of such succeeding calendar month.
"Lenders" has the meaning specified in the
preamble to this Agreement.
"Leverage Ratio" means, on any date of
determination thereof, the ratio of (i) the aggregate
outstanding amount of Debt of the Borrower and its
Subsidiaries to (ii) Total Capitalization.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor and
any easement, right of way or other encumbrance on title to
real property.
"Loan" means a Revolving Loan, a Swing Line Loan
or a Bid Rate Loan.
"Margin Regulations" means Regulations G, T, U and
X of the Board of Governors of the Federal Reserve System
and any successor regulations thereto, as in effect from
time to time.
"Margin Stock" means "margin stock" as defined in
Regulation U.
"Moody's" means Moody's Investors Service, Inc.
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"Multiemployer Plan" means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA and subject to
Title IV thereof, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions,
such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA and subject
to Title IV thereof, that (a) is maintained by the Borrower
or an ERISA Affiliate and at least one Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained
previously, but is not currently maintained by the Borrower
or its ERISA Affiliates, and in respect of which the
Borrower or an ERISA Affiliate would still have liability
under Section 4064 or 4069 of ERISA in the event such plan
has been or were to be terminated.
"Notice of Bid Rate Borrowing" has the meaning
specified in Section 2.01(b).
"Notice of Borrowing of Revolving Loans or Swing
Line Loans" has the meaning specified in Section 2.01(a).
"Obligations" means all obligations of the
Borrower under or in respect of this Agreement, including,
without limitation, payment of principal, interest, Fees,
charges, expenses, attorneys' fees and disbursements,
indemnities and any other amounts payable by the Borrower
hereunder.
"Other Taxes" has the meaning specified in
Section 2.07(b).
"Parent" of any Person means any corporation,
partnership, joint venture, trust or estate as to which such
Person is a Subsidiary.
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor agency or entity performing
substantially the same functions.
"Permitted Liens" means (a) Liens for taxes,
assessments and governmental charges or levies to the extent
not required to be paid under Section 5.01(b) hereof;
(b) Liens arising by operation of law, such as
materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens, in each case
arising in the ordinary course of business securing
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obligations that are not overdue or which are being
contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained; (c) pledges
or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public
or statutory obligations; (d) easements, rights of way and
other encumbrances on title to real property that do not
render title to the property encumbered thereby unmarketable
or materially adversely affect the use of such property for
its present purposes; (e) deposits to secure the performance
of bids, trade contracts (other than for Debt), leases,
statutory obligations, surety and appeal bonds, performance
bonds and other obligations of like nature incurred in the
ordinary course of business; (f) Liens securing Debt
incurred to purchase, or finance the purchase of, property
or assets of the Borrower or any of its Subsidiaries,
provided that any such Lien is limited to the property or
assets acquired or financed and any subsequent improvements
thereto; (g) Liens on the Borrower's warehouse, distribution
and retail facilities located in Stoughton, Avon, and
Lancaster, Massachusetts; (h) other Liens securing Debt in a
principal amount that, at the time incurred, does not exceed
(together with the aggregate principal amount of any other
Debt secured by Liens permitted pursuant to this clause (h)
then outstanding) 5% of Consolidated Net Worth; and
(i) other Liens incidental to the conduct of the business of
the Borrower and its Subsidiaries or the ownership of any of
their respective assets and not incurred to secure Debt,
which Liens do not in any case materially detract from the
value of the property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of
its Subsidiaries; provided that no such Lien shall encumber
any capital stock of any Subsidiary of the Borrower other
than, to the extent such Liens arise by operation of law,
Liens described in clause (a) hereof.
"Person" means an individual, partnership,
corporation, joint stock company, trust (including a
business trust), unincorporated association, joint venture
or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pro Rata Share" means, as to any Lender, such
Lender's Commitment, expressed as a percentage of the
Facility, both as in effect from time to time.
"RBK Holdings" means RBK Holdings plc, a wholly-
owned subsidiary of the Borrower.
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"Reference Banks" means Credit Suisse, Citibank,
N.A., ABN AMRO Bank N.V., CIBC, Inc. and The First National
Bank of Boston.
"Register" has the meaning specified in
Section 8.07(c).
"Replacement Lender" has the meaning specified in
Section 2.08.
"Required Lenders" means at any time Lenders
(other than Affiliates of the Borrower) holding in excess of
50% of the Commitments (other than Commitments of Lenders
that are Affiliates of the Borrower) then in effect.
"Revolving Loan" has the meaning specified in
Section 2.01(a).
"S&P" means Standard & Poor's Corporation.
"Senior Unsecured Debt" means unsecured,
unenhanced, unsubordinated Debt of the Borrower from time to
time outstanding, having an original stated maturity of more
than one year from the date of issuance.
"Single Employer Plan" means a single employer
plan, as defined in Section 4001(a)(15) of ERISA and subject
to Title IV thereof, that (a) is maintained by the Borrower
or an ERISA Affiliate and no Person other than the Borrower
and its ERISA Affiliates or (b) was so maintained
previously, but is not currently maintained by the Borrower
or its ERISA Affiliates, and in respect of which the
Borrower or an ERISA Affiliate would still have liability
under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the
total amount of liabilities, including, without limitation,
the reasonably expected amount of such Person's obligations
with respect to contingent liabilities, (b) the present fair
salable value of the assets of such Person is not less than
the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to
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engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
"Stock Repurchase" means any repurchase of capital
stock of the Borrower or any warrants, rights or options to
acquire such capital stock made by the Borrower or any of
its Subsidiaries after the Closing Date, provided that any
such capital stock, warrants, rights or options so
repurchased shall immediately be cancelled (and may in
accordance with applicable law be returned to the status of
authorized and unissued capital stock of the Borrower) and
in no event shall any capital stock be held as treasury
stock; provided further however that the foregoing proviso
shall not apply with respect to shares of capital stock of
the Borrower having a value not in excess of 9,264,000
British Pounds that may be purchased by RBK Holdings
pursuant to Schedule VI of the share purchase agreement
dated 8 March 1991 between the Borrower and Pentland Group
plc.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of:
(a) the outstanding capital stock having
Voting Power to elect a majority of the Board of
Directors of such corporation (irrespective of
whether at the time capital stock of any other
class or classes of such corporation shall or
might have Voting Power upon the occurrence of any
contingency),
(b) the interest in the capital or profits
of such partnership or joint venture, or
(c) the beneficial interest of such trust or
estate,
is at the time directly or indirectly owned by such Person,
by such Person and one or more of its Subsidiaries or by one
or more of such Person's Subsidiaries.
"Swing Line Loan" has the meaning specified in
Section 2.01(a).
"Taxes" has the meaning specified in
Section 2.07(a).
"Total Capitalization" means, on any date of
determination thereof, the sum of (i) the aggregate
outstanding amount of Debt of the Borrower and its
Subsidiaries and (ii) the consolidated stockholders' equity
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of the Borrower and its Subsidiaries determined in
conformity with GAAP.
"Type" refers to the distinction between Revolving
Loans, Swing Line Loans and Bid Rate Loans.
"Voting Power" means, with respect to securities
issued by any Person, the combined voting power of all
securities of such Person which are issued and outstanding
at the time of determination and which are entitled to vote
in the election of directors of such Person, other than
securities having such power only by reason of the happening
of a contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA.
"Withdrawal Liability" has the meaning given such
term under Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In
this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting
terms not specifically defined herein shall be construed in
accordance with GAAP.
SECTION 1.04. Construction. References herein
to the plural form include the singular, and the singular
include the plural; the word "including" is not limiting;
and the word "or" is not exclusive. The words "hereof",
"herein", "hereby" and "hereunder" refer to this Agreement
as a whole and not to any particular provision of this
Agreement. Article, section, exhibit and schedule
references are to articles and sections of, and exhibits and
schedules to, this Agreement, unless otherwise expressly
indicated.
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ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Facility.
(a) Revolving Loans and Swing Line Loans. Each
Lender severally agrees, upon the terms and subject to the
conditions herein set forth, to make revolving loans (each a
"Revolving Loan") and swing line loans (each a "Swing Line
Loan") to the Borrower from time to time on any Business Day
during the period from the Closing Date until the Business
Day next preceding the Commitment Termination Date, each
such Loan to be in an amount that does not exceed such
Lender's Pro Rata Share of the Borrowing of which such Loan
is a part and that, together with the principal amount then
outstanding of all other Revolving Loans and Swing Line
Loans made by such Lender, does not exceed such Lender's
Commitment in effect at the time such Loan is made. The
aggregate principal amount outstanding of all Loans shall in
no event, at any time, exceed the then-effective Facility.
Revolving Loans shall be Eurodollar Rate Loans and Swing
Line Loans shall be Base Rate Loans.
(i) Each Borrowing of Revolving Loans or
Swing Line Loans shall be in an aggregate amount not less
than $10,000,000 and in integral multiples of $1,000,000 in
excess thereof, and shall consist of Loans of the same Type
made on the same day by the Lenders ratably according to
their respective Commitments. Within the limits of the
Facility and each Lender's Commitment, and subject to the
limits referred to above, the Borrower may borrow under this
Section 2.01(a), prepay pursuant to Section 2.05(c) and
reborrow under this Section 2.01(a).
(ii) Each Borrowing pursuant to this
Section 2.01(a) shall be made pursuant to notice, given not
later than 10:00 a.m. (New York City time) (A) in the case
of a Borrowing comprised of Revolving Loans, on the third
Business Day prior to the date of the proposed Borrowing,
and (B) in the case of a Borrowing comprised of Swing Line
Loans, on the Business Day on which the proposed Borrowing
is to be made, in either case given by the Borrower to the
Administrative Agent. The Administrative Agent shall give
to each Lender notice of receipt of a Notice of Borrowing of
Revolving Loans or Swing Line Loans promptly and, in any
event, no later than 12:00 noon (New York City time) in the
case of a Swing Line Loan and 3:00 p.m. (New York City time)
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in the case of a Revolving Loan on the date on which it is
received.
(iii) Each notice of a Borrowing of
Revolving Loans or Swing Line Loans pursuant to this Section
2.01(a) (a "Notice of Borrowing of Revolving Loans or Swing
Line Loans") shall be in substantially the form of Exhibit
B-1 hereto, specifying therein (A) the date of such
Borrowing, (B) the Type of Loans comprising such Borrowing,
(C) the aggregate amount of such Borrowing, and (D) in the
case of a Borrowing comprised of Revolving Loans, the
initial Interest Period for such Borrowing. In the case of
a proposed Borrowing comprised of Revolving Loans, the
Administrative Agent shall promptly notify each Lender of
the applicable interest rate under Section 2.02(b). Each
Lender shall, before 2:00 p.m. (New York City time) on the
date of each Borrowing, make available to the Administrative
Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of the Borrowing made
on such date. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make
such funds available to the Borrower by crediting the
Borrower's Account.
(b) Bid Rate Loans. Each Lender severally agrees
that the Borrower may make Bid Rate Borrowings pursuant to
this Section 2.01(b) from time to time on any Business Day
during the period from the date hereof until the Commitment
Termination Date in the manner set forth below; provided
that, following the making of each Bid Rate Borrowing, the
aggregate principal amount of all Loans then outstanding
shall not exceed the then-effective Facility.
(i) The Borrower may request a Bid Rate
Borrowing pursuant to this Section 2.01(b) by delivering to
the Administrative Agent, by telecopier, telex or cable,
confirmed immediately in writing, a notice of a Bid Rate
Borrowing (a "Notice of Bid Rate Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying the
date and aggregate amount of the proposed Bid Rate
Borrowing, the maturity date for repayment of each Bid Rate
Loan to be made as part of such Bid Rate Borrowing (which
maturity date shall not be later than the Commitment
Termination Date), the interest payment date or dates
relating thereto, and any other terms to be applicable to
such Bid Rate Borrowing, not later than 9:30 a.m. (New York
City time) (A) at least one Business Day prior to the date
of the proposed Bid Rate Borrowing, if the Borrower shall
specify in the Notice of Bid Rate Borrowing that the rates
of interest to be offered by the Lenders shall be fixed
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rates per annum and (B) at least four Business Days prior to
the date of the proposed Bid Rate Borrowing, if the Borrower
shall instead specify in the Notice of Bid Rate Borrowing
that the Eurodollar Rate shall be used by the Lenders as a
basis for determining the rates of interest to be offered by
them. The Administrative Agent shall in turn promptly
notify each Lender of each request for a Bid Rate Borrowing
received by it from the Borrower by sending such Lender a
copy of the related Notice of Bid Rate Borrowing.
(ii) Each Lender may, if, in its sole
discretion, it elects to do so, irrevocably offer to make
one or more Bid Rate Loans to the Borrower as part of such
proposed Bid Rate Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by
notifying the Administrative Agent (which shall give prompt
notice thereof to the Borrower), before 9:30 a.m. (New York
City time) (A) on the date of such proposed Bid Rate
Borrowing, in the case of a Notice of Bid Rate Borrowing
delivered pursuant to clause (A) of paragraph (i) above and
(B) three Business Days before the date of such proposed Bid
Rate Borrowing, in the case of a Notice of Bid Rate
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, of the minimum amount and maximum amount of each Bid
Rate Loan which such Lender would be willing to make as part
of such proposed Bid Rate Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section
2.01(b), exceed such Lender's Commitment), the rate or rates
of interest therefor and such Lender's Applicable Lending
Office with respect to such Bid Rate Loan; provided that if
the Administrative Agent in its capacity as a Lender shall,
in its sole discretion, elect to make any such offer, it
shall notify the Borrower of such offer before 9:15 a.m.
(New York City time) on the date on which notice of such
election is to be given to the Administrative Agent by the
other Lenders.
(iii) The Borrower shall, in turn, (A)
before 10:30 a.m. (New York City time) on the date of such
proposed Bid Rate Borrowing, in the case of a Notice of Bid
Rate Borrowing delivered pursuant to clause (A) of paragraph
(i) above and (B) before 10:30 a.m. (New York City time)
three Business Days before the date of such proposed Bid
Rate Borrowing, in the case of a Notice of Bid Rate
Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either:
(x) cancel such Notice of Bid Rate Borrowing
by giving the Administrative Agent notice to that
effect, or
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(y) accept one or more of the offers made by
any Lender or Lenders pursuant to paragraph (ii) above
(which acceptance shall be irrevocable) in its sole
discretion, by giving notice to the Administrative
Agent of the amount of each Bid Rate Loan (which amount
shall be equal to or greater than the minimum amount,
and equal to or less than the maximum amount, notified
to the Borrower by the Administrative Agent on behalf
of such Lender for such Bid Rate Loan pursuant to
paragraph (ii) above) to be made by each Lender as part
of such Bid Rate Borrowing (provided that the aggregate
amount of such Bid Rate Borrowing shall not exceed the
amount specified on the Notice of Bid Rate Borrowing
delivered by the Borrower pursuant to paragraph (i)
above), and reject any remaining offers made by Lenders
pursuant to paragraph (ii) above by giving the
Administrative Agent notice to that effect; provided
that acceptance of offers may only be made on the basis
of ascending rates for Bid Rate Borrowings of the same
type and duration for up to the maximum amounts offered
by Lenders; and provided further that if offers are
made by two or more Lenders for the same type of Bid
Rate Borrowing for the same duration and with the same
rate of interest, in an aggregate amount which is
greater than the amount requested, such offers shall be
accepted on a pro rata basis based on the maximum
amounts offered by such Lenders at such rate of
interest.
(iv) If the Borrower notifies the
Administrative Agent that such Bid Rate Borrowing is
cancelled pursuant to paragraph (iii)(x) above or if the
Borrower rejects any offers made by Lenders pursuant to
paragraph (iii)(y) above, such notification or rejection
shall be irrevocable.
(v) If the Borrower accepts one or more of
the offers made by any Lender or Lenders pursuant to
paragraph (iii)(y) above, the Administrative Agent shall in
turn promptly notify (A) each Lender that has made an
accepted offer as described in paragraph (ii) above, of the
date and aggregate amount of such Bid Rate Borrowing and
that any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower,
(B) each Lender that is to make a Bid Rate Loan as part of
such Bid Rate Borrowing, of the amount of each Bid Rate Loan
to be made by such Lender as part of such Bid Rate
Borrowing, and (C) each Lender that is to make a Bid Rate
Loan as part of such Bid Rate Borrowing, upon receipt, that
the Administrative Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in
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Article III. Each Lender that is to make a Bid Rate Loan as
part of such Bid Rate Borrowing shall, before 1:00 P.M. (New
York City time) on the date of such Bid Rate Borrowing
specified in the notice received from the Administrative
Agent pursuant to clause (A) of the preceding sentence or
any later time when such Lender shall have received notice
from the Administrative Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its
Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02 such Lender's portion of
such Bid Rate Borrowing, in same day funds. Upon
fulfillment of the applicable conditions set forth in
Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's
aforesaid address. Promptly after each Bid Rate Borrowing,
the Administrative Agent will notify each Lender of the
amount of the Bid Rate Borrowing and will also notify each
Lender that made an offer the range of rates offered and the
accepted rate (provided that such information shall not
include the name of any bank that made an offer if such
offer was accompanied by a written instruction to the
Administrative Agent not to disclose such Bank's name).
(vi) The Borrower agrees to pay to the
Administrative Agent for the Administrative Agent's account
an auction fee as agreed with the Administrative Agent for
each Notice of Bid Rate Borrowing delivered by the Borrower
to the Administrative Agent pursuant to this Section
2.01(b), whether or not a Bid Rate Borrowing is made
pursuant thereto.
(vii) Each Bid Rate Borrowing shall be in an
aggregate amount of not less than $10,000,000 and in integral
multiples of $1,000,000 in excess thereof.
(viii) Within the limits of the Facility, and on
the conditions set forth in this Section 2.01(b), the Borrower
may from time to time borrow under this Section 2.01(b), repay or
prepay pursuant to Section 2.05(c) or (d) below, and reborrow
under this Section 2.01(b).
(ix) The Borrower shall repay to the
Administrative Agent for the account of each Lender which has
made a Bid Rate Loan, on the maturity date of each Bid Rate Loan
(such maturity date being that specified by the Borrower for
repayment of such Bid Rate Loan in the related Notice of Bid Rate
Borrowing delivered pursuant to subsection (b)(i) above), the
then unpaid principal amount of such Bid Rate Loan.
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(x) The Borrower shall pay interest on the unpaid
principal amount of each Bid Rate Loan from the date of such Bid
Rate Loan to the date the principal amount of such Bid Rate Loan
is repaid in full, at the rate of interest for such Bid Rate
Loan specified by the Lender making such Bid Rate Loan in its
notice with respect thereto delivered pursuant to subsection
(b)(ii) above, payable on the interest payment date or dates
specified by the Borrower for such Bid Rate Loan in the related
Notice of Bid Rate Borrowing delivered pursuant to subsection
(b)(i) above.
(c) Eurodollar Rate Loans. Anything in
Section 2.01(a) to the contrary notwithstanding, the
Borrower may not select a Eurodollar Rate Loan if (i) the
aggregate amount of such Borrowing is less than $10,000,000,
(ii) the obligation of the Lenders to make Eurodollar Rate
Loans, or to Continue Loans as or Convert Loans into
Eurodollar Rate Loans, then is suspended pursuant to Section
2.06(c) or (d) or (iii) after giving effect to such
Borrowing, the aggregate number of different Interest
Periods for outstanding Eurodollar Rate Loans is greater
than fifteen (15).
(d) Authorized Persons. The Borrower shall
notify the Administrative Agent in writing of the names of
its officers and employees authorized to request Loans on
behalf of the Borrower and shall provide the Administrative
Agent with a specimen signature of each such officer or
employee. The Administrative Agent shall be entitled to
rely conclusively on such officer's or employee's authority
to request Loans on behalf of the Borrower until the
Administrative Agent receives written notice to the
contrary. The Administrative Agent shall have no duty to
verify the authenticity of the signature appearing on any
Notice of Borrowing.
(e) Notice Irrevocable. Each Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing relating to a Borrowing that is
to be comprised of Eurodollar Rate Loans, the Borrower shall
indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of
Borrowing of Revolving Loans or Swing Line Loans or
acceptance of an offer made by any Lender pursuant to a
Notice of Bid Rate Borrowing for such Borrowing the
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applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Loan to be made by such
Lender as part of such Borrowing if such Loan, as a result
of such failure, is not made on such date.
(f) Funding. Unless the Administrative Agent
shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of
such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in
accordance with Section 2.01(b)(ii), and the Administrative
Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and
to the extent that such Lender shall not have so made such
ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to pay or repay to
the Administrative Agent, forthwith on demand, such
corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is paid or repaid to the
Administrative Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to Loans comprising
such Borrowing and (ii) in the case of such Lender, an
interest rate per annum equal to the Administrative Agent's
cost of funds advanced to the Borrower, as certified to such
Lender by the Administrative Agent. If such Lender shall
pay to the Administrative Agent such corresponding amount,
such amount so paid shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
(g) Several Obligations. Each Lender's
obligation to make Loans hereunder is several and not joint.
The failure of any Lender to make the Loan to be made by it
as part of any Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Loan on the
date of such Borrowing, but no Lender shall be responsible
for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(h) Use of Proceeds. The proceeds of the Loans
shall be used by the Borrower solely (i) to pay fees and
expenses incurred in connection herewith, (ii) to finance
its working capital requirements and (iii) for its general
corporate purposes, including without limitation the
refinancing of existing indebtedness. No part of the
proceeds of any Loan shall be used directly or indirectly
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for the purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any Margin Stock, or maintaining
or extending credit to others for such purpose or for any
other purpose, in any manner that violates the Margin
Regulations.
SECTION 2.02. Interest. The Borrower shall pay
interest on the unpaid principal amount of each Loan owing
to each Lender from the date such Loan is made until the
principal amount thereof is paid in full, at the following
rates per annum:
(a) Base Rate Loans. Each Base Rate Loan shall
bear interest at a rate per annum equal to the Base Rate in
effect from time to time, payable quarterly in arrears on
the first Business Day of each January, April, July and
October during such period and on the date such Base Rate
Loan (or a portion thereof, in which case interest shall be
paid on such date in respect of such portion) is repaid on
the Commitment Termination Date or prepaid pursuant to
Section 2.05(d).
(b) Eurodollar Rate Loans. Each Eurodollar Rate
Loan shall bear interest at a rate per annum equal at all
times during each Interest Period for such Loan to the sum
of (i) the Eurodollar Rate for such Interest Period for such
Loan plus (ii) the Applicable Margin, payable on the last
day of such Interest Period and, if such Interest Period has
a duration of six (6) months or more, on the day during such
Interest Period that is three (3) months after the first day
of such Interest Period and, if applicable, the day that is
three (3) months after the last interest payment date during
such Interest Period (or, if such day is not a Business Day,
on the next succeeding Business Day).
(c) Bid Rate Loans. Each Bid Rate Loan shall
bear interest as specified in Section 2.01(b)(x).
(d) Default Interest. Notwithstanding
Section 2.02(a), (b) or (c), upon the occurrence and during
the continuation of (i) an Event of Default, other than an
Event of Default described in Section 6.01(a), and upon
notice to the Borrower from the Administrative Agent that
the rate of interest specified in this Section 2.02(d) shall
apply, commencing on the date of such notice and thereafter
until such Event of Default is cured or waived in accordance
with the terms hereof, or (ii) an Event of Default described
in Section 6.01(a), interest on the unpaid principal amount
of each Loan shall accrue at a rate per annum equal at any
time to the rate of interest otherwise in effect at such
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time pursuant to Section 2.02(a), (b) or (c) plus 2% per
annum.
SECTION 2.03. Conversion of Loans; Continuation
of Eurodollar Rate Loans.
(a) Optional Conversion; Continuation. The
Borrower may, on any Business Day, by notice given to the
Administrative Agent not later than 11:00 a.m. (New York
City time) on the third Business Day prior to such Business
Day and subject to the provisions of Section 2.06, Convert
all or any portion of the Revolving Loans or Swing Line
Loans comprising the same Borrowing into Loans of the other
Type; provided, however, that (i) any Conversion of
Revolving Loans into Swing Line Loans shall be made on, and
only on, the last day of an Interest Period then applicable
to such Revolving Loans unless the Borrower pays or
reimburses to each Lender on the proposed Conversion date,
pursuant to Section 2.11, any loss, cost, expense or
liability incurred by such Lender as a result of such
Conversion made on any date other than the last date of the
applicable Interest Period, (ii) any Conversion of Swing
Line Loans into Revolving Loans shall be in an amount not
less than the minimum amount specified in Section 2.01(c),
and (iii) no Conversion of any Loans shall result in more
Interest Periods for outstanding Revolving Loans than
permitted under Section 2.01(c). The Borrower also may, by
notice given to the Administrative Agent not later than
11:00 a.m. (New York City time) on the third Business Day
prior to the Business Day on which an Interest Period with
respect to a Borrowing of Eurodollar Rate Loans will expire,
Continue all or any portion of such Revolving Loans equal to
$10,000,000 or an integral multiple of $1,000,000 in excess
of that amount as Eurodollar Rate Loans, and thereupon a
succeeding Interest Period in respect of such Eurodollar
Rate Loans shall commence on the expiration date of the
Interest Period then applicable thereto. Notwithstanding
any other provision hereof, the Borrower shall not have the
right to Convert Swing Line Loans into Revolving Loans or to
Continue Loans as Eurodollar Rate Loans if, on the date of
any such proposed Conversion or Continuation, a Default has
occurred and is continuing. Each such notice of Conversion
or Continuation shall, within the restrictions specified
above, specify (A) the date of such Conversion or
Continuation, (B) the Loans to be Converted or Continued and
(C) if a Conversion is into Eurodollar Rate Loans, and with
respect to a Continuation of Eurodollar Rate Loans, the
duration of the initial or successive Interest Period for
such Loans. Each notice of Conversion or Continuation shall
be irrevocable and binding on the Borrower.
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(b) Mandatory Conversion. (i) On the date on
which the aggregate unpaid principal amount of Eurodollar
Rate Loans comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than
$10,000,000, such Eurodollar Rate Loans shall automatically
Convert into Base Rate Loans.
(ii) If a Default occurs and is continuing
on the last day of an Interest Period applicable to a
Borrowing of Eurodollar Rate Loans, then (A) such Eurodollar
Rate Loans automatically shall Convert into Base Rate Loans
on the last day of such Interest Period, and the Borrower
shall not have the right to continue such Loans as
Eurodollar Rate Loans and select a succeeding Interest
Period with respect thereto and, subject to Section 2.09
hereof, any such selection of a succeeding Interest Period
theretofore made pursuant to the terms hereof shall be null
and void, and (B) the obligation of the Lenders to make, or
to Convert Loans into, Eurodollar Rate Loans shall be
suspended; provided, however, that each Eurodollar Rate Loan
automatically shall be Converted into a Base Rate Loan
immediately upon the Loans (or any of them) being declared
to be due and payable, or becoming due and payable, pursuant
to Section 6.01.
(iii) If the Borrower shall fail to Continue
any Eurodollar Rate Loans in accordance with the provisions
contained in this Section 2.03, the Administrative Agent
will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Loan will automatically,
on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Loan.
SECTION 2.04. Fees.
(a) Facility Fee. The Borrower agrees to pay to
the Administrative Agent, for the ratable accounts of the
Lenders, a facility fee (the "Facility Fee") on the average
daily Commitment of each Lender, whether used or unused,
from the date hereof, in the case of each Lender that is
signatory hereto, and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the
Commitment Termination Date, at the rate of (i) 0.1% per
annum so long as Senior Unsecured Debt of the Borrower shall
be rated at least AA- by S&P and Aa3 by Moody's, (ii) 0.115%
per annum so long as Senior Unsecured Debt of the Borrower
shall be rated at least A- from S&P and A3 by Moody's,
(iii) 0.145% per annum so long as Senior Unsecured Debt of
the Borrower shall be rated at least BBB+ by S&P and Baa1 by
Moody's, (iv) 0.20% per annum so long as Senior Unsecured
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Debt of the Borrower shall be rated at least BBB- by S&P and
Baa3 by Moody's and (v) 0.275% per annum at any other time
(including, without limitation, any time that there shall be
Senior Unsecured Debt of the Borrower outstanding and not
rated by both S&P and Moody's); provided that if there shall
be no Senior Unsecured Debt of the Borrower outstanding at
any time, the Facility Fee shall be determined by reference
to the most recent previously existing ratings of Senior
Unsecured Debt of the Borrower. The Facility Fee shall be
payable quarterly in arrears on the last Business Day of
each December, March, June and September, and on the
Commitment Termination Date.
(b) Administrative Agent's Fees. The Borrower
shall pay to the Administrative Agent, for its own account,
annually in advance on the Closing Date and each anniversary
of such date, a fee (the "Administrative Agent's Fee") in
the amount agreed in writing between the Borrower and the
Administrative Agent.
(c) Payment; Fees Fully Earned. All Fees shall
be payable to the Administrative Agent or the Arranger, as
the case may be, for its own account or the account of the
Lenders, as the case may be, at the Administrative Agent's
Account, in immediately available funds. All Fees shall be
fully earned on the date such Fees become payable pursuant
hereto and, when paid, shall be non-refundable, except that,
with respect only to the Administrative Agent's Fee, if the
Administrative Agent resigns or is removed pursuant to
Section 7.06, the retiring Administrative Agent shall return
to the Borrower a portion of the annual Administrative
Agent's Fee equal to (i) the amount of the Administrative
Agent's Fee actually paid to the retiring Administrative
Agent in respect of the year in which the Administrative
Agent resigns or is removed multiplied by (ii) a fraction,
the numerator of which is the number of days from the
effective date of resignation or removal to the next
succeeding anniversary of the Closing Date, and the
denominator is 360.
SECTION 2.05. Reduction of the Commitments;
Prepayment and Repayment.
(a) Optional Facility Reduction. The Borrower
shall have the right, upon at least ten (10) Business Days'
notice to the Administrative Agent, to terminate in whole or
reduce ratably in part the unused portions of the
Commitments of the Lenders, provided that each partial
reduction shall be in the aggregate amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof.
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(b) Facility Termination. (i) The Facility
shall be terminated on the date (the "Commitment Termination
Date") that is the earlier of (x) the date which is five (5)
years after the Closing Date and (y) the date upon which the
Borrower terminates in whole the Commitments of the Lenders
in accordance with Section 2.05(a).
(c) Optional Prepayment. The Borrower may, upon
at least three (3) Business Days' notice to the
Administrative Agent (or, in the case of Swing Line Loans,
same day notice on any Business Day) stating a proposed
prepayment date and aggregate principal amount to be
prepaid, and if such notice is given the Borrower shall on
such date, prepay, in whole or in part in the aggregate
amount stated in such notice, the outstanding principal
amount of all of the Loans comprising part of the same
Borrowing or Borrowings, without penalty or premium;
provided, however, that, unless the entire outstanding
principal amount of the Loans is then prepaid and the
Facility is terminated in connection therewith, each partial
prepayment shall be in an aggregate principal amount not
less than $10,000,000 and in an integral multiple of
$1,000,000 in excess thereof; and provided, further, that no
such prepayment of a Eurodollar Rate Loan or a Bid Rate Loan
shall be made other than on the last day of the Interest
Period therefor or the maturity date for repayment of such
Bid Rate Loan, unless such a prepayment on such other day is
accompanied by payment or reimbursement to each Lender,
pursuant to Section 2.11, of any loss, cost, expense or
liability incurred by such Lender as a result of such
prepayment on any date other than the last date of the
applicable Interest Period or the maturity date for
repayment of such Bid Rate Loan.
(d) Mandatory Prepayment. The Borrower shall,
on each Business Day, prepay an aggregate principal amount
of the Loans comprising part of the same Borrowing or
Borrowings equal to the amount by which the aggregate
principal amount of the Loans then outstanding exceeds the
Facility in effect on such Business Day (after giving effect
to any reductions in the Facility on such Business Day
pursuant to the terms hereof). Payments of such amounts
shall be applied first to outstanding Swing Line Loans,
second to outstanding Revolving Loans and third to Bid Rate
Loans.
(e) Repayment. The outstanding principal amount
of the Loans, and accrued interest thereon, shall be repaid
in full on the Commitment Termination Date.
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SECTION 2.06. Increased Costs, Etc.
(a) Increased Cost. Except as to taxes, levies,
imposts, deductions, charges or withholdings, if either (i)
the introduction of or any change (other than any change by
way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in
the interpretation of any law or regulation or (ii) the
compliance by any Lender or its Eurodollar Lending Office
with any guideline or request from any central bank or other
governmental authority, in any case introduced, changed,
interpreted or requested after the date hereof (whether or
not having the force of law), shall either (x) impose,
modify or deem applicable any reserve, special deposit or
similar requirement against assets held by, or deposits in
or for the account of, any Lender or (y) impose on any
Lender or any Person controlling such Lender any other
condition relating to this Agreement or such Lender or such
Person or the Eurodollar Rate Loans made by such Lender, and
the result of any event referred to in clause (i) or (ii)
shall be to increase the cost to any Lender or any Person
controlling such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans, then the
Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such
Lender such additional amounts as may be required to
compensate such Lender or such Person for such increased
cost; provided, however, that such Lender shall designate a
different Eurodollar Lending Office if, in the sole judgment
of the Lender, such designation would reduce such additional
amounts payable to such Lender by the Borrower and would
not, in the sole judgment of such Lender, be disadvantageous
in any manner to such Lender or any Person controlling such
Lender and provided further that (A) each Lender shall use
its best efforts to notify the Borrower and the
Administrative Agent as to the existence of any change of
circumstance described above in this subsection (a) as
promptly as practical after such Lender gains knowledge
thereof and is able to determine that such change will
result in increased costs hereunder, but the failure to give
such notice shall not (subject to clause (B) below) affect
the right of any Lender to any payment to which it would
otherwise be entitled hereunder and (B) the Borrower shall
not be obligated to compensate such Lender for any costs
incurred for any period after the Lender gains knowledge of
the change of circumstance and is able to determine that
such change will result in increased costs and prior to the
date that is sixty (60) days before the date upon which
notice of such change is first given to Borrower as required
by clause (A) above. A certificate as to the amount of such
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increased cost and the manner of computation thereof,
submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest
error.
(b) Capital. If any Lender determines that the
adoption or effectiveness after the date of this Agreement
of any treaty, law, rule, regulation or guideline in regard
to capital adequacy, or any change after the date of this
Agreement in, or in the application of, any such treaty,
law, rule, regulation or guideline (whether or not in effect
on the date of this Agreement and whether or not then
scheduled or anticipated to take effect thereafter), or any
change after the date of this Agreement in the
interpretation or administration thereof by any central bank
or other governmental or monetary authority charged with the
interpretation or administration thereof, or compliance by
the Lender or either of its Applicable Lending Offices or
any Person controlling the Lender with any interpretation,
directive, request, order or decree introduced after the
date of this Agreement in regard to capital adequacy
(whether or not having the force of law) by any such central
bank or other governmental or monetary authority has or
would have the effect of reducing the rate of return on the
capital of or maintained by the Lender or any Person
controlling the Lender as a consequence of the Lender's
Loans or Commitment hereunder, and other loans or
commitments of this type, by increasing the amount of
capital required or expected to be maintained by such Lender
or any Person controlling such Lender, to a level below that
which the Lender or such Person could have achieved but for
such adoption, effectiveness, change or compliance (taking
into account the Lender's or such Person's policies with
respect to capital adequacy), then the Borrower shall, from
time to time, pay to the Lender, upon demand by such Lender
(with a copy of such demand to the Administrative Agent),
such additional amounts as may be specified by such Lender
as being sufficient to compensate such Lender for such
reduction in return, to the extent that the Lender
determines such reduction to be attributable to the
existence, issuance or maintenance of its Loans or
Commitment; provided that (A) each Lender shall use its best
efforts to notify the Borrower and the Administrative Agent
as to the existence of any change of circumstance described
above in this subsection (b) as promptly as practical after
such Lender gains knowledge thereof and is able to determine
that such change will result in additional amounts
hereunder, but the failure to give such notice shall not
(subject to clause (B) below) affect the right of any Lender
to any payment to which it would otherwise be entitled
hereunder and (B) the Borrower shall not be obligated to
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compensate such Lender for any such reduction attributable
to any period after the Lender gains knowledge of the change
of circumstance and is able to determine that such change
will result in increased costs and prior to the date that is
sixty (60) days before the date upon which notice of such
change is first given to Borrower as required by clause (A)
above. A certificate as to such amounts submitted to the
Borrower by such Lender shall be conclusive and binding for
all purposes, absent manifest error.
(c) Unavailability or Inadequacy of Eurodollar
Rate. If, with respect to any proposed borrowing or
Continuation of, or Conversion of Base Rate Loans into,
Eurodollar Rate Loans, (i) each Reference Bank notifies the
Administrative Agent that it has determined that, for any
reason, appropriate quotations are not available to it in
the London interbank market for purposes of determining the
Eurodollar Rate, or (ii) Required Lenders notify the
Administrative Agent that the Eurodollar Rate for the
Interest Period proposed to be applicable to such Loans will
not adequately reflect the cost to such Lenders of making,
funding or maintaining such Eurodollar Rate Loans for such
Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon (x) each
Eurodollar Rate Loan proposed to be Continued will
automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Loan and (y) the
obligation of the Lenders to make, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that, in the
case of clause (i), the Administrative Agent has, and, in
the case of clause (ii), Required Lenders have, determined
that the circumstances causing such suspension no longer
exist.
(d) Illegality. Notwithstanding any other
provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation
shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans
hereunder, then, on notice thereof and demand therefor by
such Lender to the Borrower through the Administrative
Agent, (i) each Eurodollar Rate Loan will automatically,
upon such demand, Convert into a Base Rate Loan and (ii) the
obligation of the Lenders to make, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower that such
Lender has determined that the circumstances causing such
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suspension no longer exist. Before giving any such notice
and demand to the Administrative Agent pursuant to this
Section 2.06(d), such Lender shall designate a different
Eurodollar Lending Office if such designation would avoid
the need for giving such notice and demand and would not, in
the judgment of such Lender, be otherwise disadvantageous to
such Lender.
SECTION 2.07. Taxes.
(a) No Withholding. Any and all payments by the
Borrower hereunder shall be made free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, (i) in the
case of each Lender and the Administrative Agent, taxes
imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender
or the Administrative Agent (as the case may be) is
organized or any political subdivision or taxing authority
thereof or therein, (ii) in the case of each Lender, taxes
imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's principal office or
Applicable Lending Office or any political subdivision or
taxing authority thereof or therein and (iii) in the case of
each Lender, United States withholding tax payable with
respect to payments hereunder under laws (including, without
limitation, any statute, treaty, ruling, determination or
regulation) in effect on the Initial Date, but not excluding
any United States withholding tax payable as a result of any
change in (including, without limitation, any change in
interpretation thereof) such laws occurring after the
Initial Date (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). For purposes of this
Section 2.07, the term "Initial Date" shall mean, in the
case of each Lender signatory hereto, the Closing Date and,
in the case of each Lender other than a Lender signatory
hereto, the date of the Assignment and Acceptance or the
Additional Lender Agreement, as the case may be, pursuant to
which it becomes a Lender. If the Borrower shall be
required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the
Administrative Agent, (x) the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional
sums payable under this Section 2.07) such Lender or the
Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such
deductions been made, (y) the Borrower shall make such
deductions and (z) the Borrower shall pay the full amount
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deducted to the relevant taxation authority or other
authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different
Applicable Lending Office if, in the sole judgment of the
Lender, such designation would avoid the need for, or reduce
the amount of, any Taxes required to be deducted from or in
respect of any sum payable hereunder to any Lender or the
Administrative Agent and would not, in the sole judgment of
such Lender, be otherwise disadvantageous in any manner to
such Lender or contrary to its policies. Notwithstanding
the foregoing, the Borrower shall have no obligation to pay
any amount to or for the account of any Lender or the
Administrative Agent on account of any Taxes pursuant to
this Section 2.07 to the extent such amount results from the
failure of any Lender or the Administrative Agent to deliver
to the Borrower and the Administrative Agent, on or before
the date payment is due by the Borrower to such Lender or
the Administrative Agent, two (2) duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, or
any successor applicable form, as the case may be,
certifying that the Lender or the Administrative Agent is
entitled to receive such payments without deduction or
withholding of United States Federal income taxes, if either
such form or successor form would be applicable.
(b) Other Taxes. In addition to making all
payments to be made hereunder free and clear of Taxes, the
Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes,
charges or similar levies (which shall not, in any event,
include any transfer or other Taxes that arise or are
incurred or imposed solely as a result of transfer or
assignment by a Lender of all or any portion of its Loans or
its Commitment) that arise from any payment made hereunder
or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").
(c) Indemnity. The Borrower will indemnify,
within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written
demand therefor, each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.07)
paid by such Lender or the Administrative Agent (as the case
may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally assessed.
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(d) Evidence of Payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish
to the Administrative Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt
evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder, the Borrower will furnish
to the Administrative Agent, at such address, a certificate
from each appropriate taxing authority, or an opinion of
counsel acceptable to the Administrative Agent, in either
case stating that such payment is exempt from or not subject
to Taxes; provided, however, that such certificate or
opinion need only be given if: (i) the Borrower makes any
payment from any account located outside the United States,
or (ii) the payment is made by a payor that is not a United
States Person. For purposes of this Section 2.07, the terms
"United States" and "United States Person" shall have the
meanings set forth in Section 7701 of the Code.
(e) Change of Lending Office. If a Lender shall
change its Applicable Lending Office, such Lender shall not
be entitled to receive any greater payment under this
Section 2.07 than such Lender would have been entitled to
receive if it had not changed its Applicable Lending Office,
unless such change was made at the request of the Borrower
or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Survival of Covenant. Without prejudice to
the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower
contained in this Section 2.07 shall survive the payment in
full of principal and interest hereunder.
SECTION 2.08. Replacement of Lender in Event of
Adverse Condition. In the event the Borrower becomes
obligated to pay additional amounts to any Lender pursuant
to Section 2.06 or 2.07 as a result of any condition
described therein, then, unless such Lender theretofore has
removed or cured the condition creating the obligation to
pay such additional amounts, the Borrower may designate
another bank that is acceptable to the Administrative Agent
and Required Lenders (such bank herein being referred to as
a "Replacement Lender") to purchase the Loans and assume the
Commitment of such Lender and such Lender's rights
hereunder, without recourse to or warranty by, or expense
to, such Lender for a purchase price equal to the
outstanding principal amount of the Loans payable to such
Lender plus any accrued but unpaid interest on such Loans
and accrued but unpaid Facility Fees in respect of that
Lender's Commitment, and upon such purchase and execution
hereof by such Replacement Lender, such Lender shall no
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longer be a party hereto or have any rights hereunder, and
the Replacement Lender shall succeed to the rights of such
Lender hereunder.
SECTION 2.09. Payments.
(a) Time for Payment. (i) The Borrower shall
make each payment hereunder not later than 1:00 p.m. (New
York City time) on the day when due in U.S. Dollars to the
Administrative Agent at the Administrative Agent's Account
in immediately available funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or Facility
Fees ratably (other than payable pursuant to Section
2.06(a), 2.06(b) or 2.07) to the Lenders for the account of
their Applicable Lending Offices, and like funds relating to
the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the
terms of this Agreement, provided that if such funds are
received by the Administrative Agent prior to 1:00 p.m. (New
York time) on any Business Day and are not distributed to
any Lender by the Administrative Agent on the same Business
Day, the Administrative Agent shall pay to such Lender
interest thereon at the Federal Funds Rate for each day
until such funds are so distributed. Upon its acceptance of
an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.
(ii) Whenever any payment hereunder shall be
stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in
the computation of payment of interest, as the case may be;
provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans to be made
in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(b) Computation. All computations of interest
in respect of Eurodollar Rate Loans shall be made by the
Administrative Agent on the basis of a year of 360 days, and
computations of interest in respect of Base Rate Loans and
Fees shall be made by the Administrative Agent on the basis
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of a year of 365 days or 366 days, as the case may be, in
each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for
which such interest or Fees are payable. Each determination
by the Administrative Agent hereunder shall be conclusive
and binding for all purposes, absent manifest error.
(c) Distribution of Payments. Unless the
Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to
any Lender hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender on such due date an amount
equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender shall
repay to the Administrative Agent forthwith on demand such
amount distributed to such Lender together with interest
thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the interest
rate per annum certified by the Administrative Agent to such
Lender to be the Administrative Agent's cost of funds with
respect to such payment made to such Lender.
(d) Interest on Overdue Payment. Interest on
any past due payment shall be payable on demand.
SECTION 2.10. Sharing of Payments, Etc. If any
Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans owing to it (other
than pursuant to Section 2.06(a), 2.06(b) or 2.07) in excess
of its ratable share of payments on account of the Loans
obtained by all the Lenders, such Lender shall so notify the
Administrative Agent and forthwith purchase from the other
Lenders such participations in the Loans owing to them as
shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender
shall repay to the purchasing Lender the purchase price to
the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of
(i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by
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the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to
this Section 2.10 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right
of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in
the amount of such participation.
SECTION 2.11. Compensation for Funding Losses.
In addition to the amounts required to be paid by the
Borrower pursuant to Sections 2.06 and 2.07 hereof, the
Borrower shall pay to any Lender, upon demand by such
Lender, such amount or amounts as the Lender determines is
or are necessary to compensate it for any loss, cost,
expense or liabilities incurred (including, without
limitation, any loss, cost or expense incurred by reason of
the liquidation or redeployment of deposits, provided that
such loss, cost or expenses shall be determined by reference
to the cost to such Lender of such deposits and not by
reference to the rate of interest borne by the Eurodollar
Rate Loans or Bid Rate Loans paid, prepaid or Converted) by
it as a result of any payment, prepayment or Conversion of a
Eurodollar Rate Loan or Bid Rate Loan for any reason
(including, without limitation, upon a mandatory prepayment
pursuant to Section 2.05(d) or by reason of an acceleration
pursuant to Section 6.01 hereof) on a date other than the
last day of an Interest Period applicable to such Eurodollar
Rate Loan or the maturity date for repayment of such Bid
Rate Loan.
SECTION 2.12. Pro Rata Treatment. Except to the
extent otherwise provided herein, (i) each Borrowing of
Swing Line Loans or Revolving Loans shall be requested from
the Lenders, pro rata according to their respective
Commitments, (ii) each termination or reduction of the
Facility shall be applied pro rata to the respective
Commitments of the Lenders, (iii) each payment or prepayment
by the Borrower of principal of any Swing Line Loans or
Revolving Loans shall be made for the account of the Lenders
pro rata according to the aggregate outstanding amount of
their respective Swing Line Loans or Revolving Loans, and
(iv) each payment by the Borrower of interest on the Swing
Line Loans, Revolving Loans and Facility Fees shall be made
for the account of the Lenders pro rata according to the
outstanding principal amount of their respective Swing Line
Loans or Revolving Loans and their respective Commitments,
respectively.
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SECTION 2.13. Evidence of Debt.
(a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from
each Loan owing to such Lender from time to time, including
the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, the Type of Loans
comprising such Borrowing and any Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Administrative Agent
from the Borrower hereunder, and each Lender's share
thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest
error.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make the
initial Loan or Loans hereunder is subject to the following
conditions precedent, and the acceptance by the Borrower of
the proceeds of such initial Loan or Loans shall constitute
a representation and warranty by the Borrower that all of
such conditions (other than any such conditions that are
waived in writing by the Lenders in accordance with the
terms hereof) were satisfied on and as of the date of such
initial Loan or Loans:
(a) There shall exist no action, suit,
investigation, litigation or proceeding pending or, except
as disclosed in Schedule 4.01(h) hereto, threatened before
any court, governmental agency or arbitrator (i) against or
affecting the Borrower or any of its Subsidiaries or their
respective assets or properties, in which there is a
reasonable possibility of an adverse determination that
could have a material adverse effect on the business,
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condition (financial or otherwise), operations, performance
or properties of the Borrower, or the Borrower and its
Subsidiaries, taken as a whole, or on the ability of the
Borrower to perform its Obligations hereunder, or
(ii) against the Borrower or the Administrative Agent (or,
as a condition only to any Lender's obligation hereunder,
such Lender) that seeks to enjoin or purports to affect the
legality, validity or enforceability of this Agreement or
the consummation of the transactions contemplated hereby or
materially adversely affect the rights of the Borrower or
the Administrative Agent (or such Lender) hereunder.
(b) (i) All governmental and third party
consents and approvals necessary in connection with this
Agreement or the consummation of the transactions
contemplated hereby shall have been obtained (without the
imposition of any conditions which are not acceptable to the
Lenders) and shall remain in effect; and (ii) no law or
regulation shall, in the judgment of the Lenders, restrain,
prevent or impose materially adverse conditions upon this
Agreement or the consummation of the transactions
contemplated hereby.
(c) The Borrower shall have paid all Fees that
are due and expenses (as provided in Section 8.04 and as
otherwise agreed between the Borrower and the Administrative
Agent, the Arranger or any Lender) of the Administrative
Agent, the Arranger and the Lenders.
(d) The Administrative Agent shall have received
on or before the Closing Date the following (each dated the
Closing Date, unless otherwise specified), in form and
substance satisfactory to the Administrative Agent (unless
otherwise specified):
(i) certified copies of the resolutions of
the Board of Directors of the Borrower approving this
Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement;
(ii) a copy of the articles of organization
of the Borrower and each amendment thereto, certified as of
a recent date prior to the Closing Date by the Secretary of
State of The Commonwealth of Massachusetts as being a true
and correct copy thereof;
(iii) a copy of (x) a certificate or
certificates of the Secretary of State of The Commonwealth
of Massachusetts, dated as of a recent date prior to the
Closing Date, listing the charter and all amendments thereto
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of the Borrower on file in his or her office and certifying
that (A) such amendments are the only amendments to the
Borrower's charter on file in his or her office, and (B) the
Borrower is duly incorporated and in good standing under the
laws of such state and (y) a certificate of the
Massachusetts Department of Revenue as to the tax good
standing of the Borrower under the laws of Massachusetts (or
a certificate of an officer of the Borrower regarding same
in form and substance reasonably satisfactory to the
Administrative Agent to be followed by a certificate of the
Massachusetts Department of Revenue as soon as practicable);
(iv) a certificate of the Borrower, signed
on behalf of the Borrower by its President or any Vice
President and the Clerk or any Assistant Clerk, dated the
Closing Date, certifying as to (A) the absence of any
amendments to the articles of organization of the Borrower
since the date of the Secretary of State's certificate
referred to in Section 3.01(d)(iii), (B) a true and correct
copy of the bylaws of the Borrower as in effect on the
Closing Date, (C) the due organization and good standing of
the Borrower as a corporation under the laws of its state of
incorporation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower, (D) the truth in
all material respects of the representations and warranties
contained herein, (E) the absence of any event occurring and
continuing, or resulting from the Borrowing(s) (if any), on
the Closing Date that constitutes a Default and (F) as to
satisfaction of the conditions precedent specified in
Sections 3.01(e) and (f);
(v) a certificate of the Clerk or any
Assistant Clerk of the Borrower certifying as to (A) the
adoption of resolutions by the Board of Directors of the
Borrower in the form attached thereto authorizing and
approving this Agreement, and that such resolutions have not
been rescinded, modified or amended and remain in full force
and effect, and (B) the names and true signatures of the
officers of the Borrower authorized to sign this Agreement
and the other documents to be delivered hereunder;
(vi) duly executed copies of this Agreement,
in number sufficient for all of the Lenders;
(vii) such financial, business and other
information regarding the Borrower and its Subsidiaries as
the Lenders shall have reasonably requested, including,
without limitation, (A) information as to possible
contingent liabilities, tax information, environmental
information, obligations under ERISA, collective bargaining
agreements and other arrangements with employees and
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(B) audited consolidated financial statements for the period
ended December 31, 1993 for the Borrower and its
Subsidiaries;
(viii) a favorable opinion of Ropes & Gray,
counsel to the Borrower, in substantially the form of
Exhibit C and hereby given upon the express instructions of
the Borrower, and as to such other matters as any Lender
through the Administrative Agent may reasonably request; and
(ix) a favorable opinion of Gibson, Dunn &
Crutcher, counsel to the Administrative Agent and the
Lenders, as to such matters as the Administrative Agent may
request.
(e) As of the Closing Date, there shall have
occurred no material adverse change in the business,
condition (financial or otherwise), operations, performance
or properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, since December 31, 1993.
(f) As of the Closing Date, all availability of
funds and the commitments by the lenders under the
$175,000,000 Credit Agreement dated as of December 7, 1992
among the Borrower, the lenders party thereto, Credit
Suisse, as Agent, and Credit Suisse First Boston Limited, as
Syndication Agent, shall have been fully cancelled and
terminated and any and all amounts outstanding thereunder
shall have been repaid in full.
SECTION 3.02. Conditions Precedent to Each
Borrowing. The obligation of each Lender to make a Loan
(including the initial Loan or Loans) on the occasion of
each Borrowing shall be subject to the prior satisfaction on
the Closing Date of the conditions identified in Section
3.01 and also subject to the following conditions precedent,
and the acceptance by the Borrower of the proceeds of Loans
made shall constitute a representation and warranty by the
Borrower, that all of such conditions (other than any such
conditions that are waived in accordance with the terms
hereof) were satisfied on the date of such Borrowing:
(a) The representations and warranties contained
herein shall be true and correct in all material respects on
and as of the date of such Borrowing, both before and after
giving effect to such Borrowing and to the application of
the proceeds therefrom, as though made on and as of such
date;
(b) No event shall have occurred and be
continuing, or circumstance shall exist, or would result
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from such Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
(c) After giving effect to such Borrowing, the
aggregate principal amount of Loans then outstanding shall
not exceed the Facility; and
(d) The Administrative Agent shall have received
such other approvals, opinions, documents or information as
Required Lenders or the Administrative Agent may have
reasonably requested.
SECTION 3.03. Determinations Under Section 3.01.
For purposes of determining compliance with the conditions
specified in Section 3.01, each Lender shall be deemed to
have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated hereby shall
have received notice from such Lender prior to the initial
Borrowing specifying its objection thereto and either such
objection shall not have been withdrawn by notice to the
Administrative Agent to that effect or such Lender shall not
have made available to the Administrative Agent such
Lender's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
the Borrower. The Borrower represents and warrants as
follows:
(a) The Borrower (i) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) is duly
qualified or licensed as a foreign corporation and is in
good standing in each jurisdiction in which it owns or
leases property or in which the conduct of its business
requires it to so qualify or be licensed (except where the
failure to so qualify or be licensed would not have a
material adverse effect on the Borrower and its
Subsidiaries, taken as a whole) and (iii) has all requisite
corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted
and as proposed to be conducted. All of the outstanding
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capital stock of the Borrower has been validly issued and is
fully paid and non-assessable.
(b) Set forth on Schedule 4.01(b) hereto is a
complete and accurate list of all of the Subsidiaries of the
Borrower, showing as to each such Subsidiary, as of the date
hereof, the jurisdiction of its incorporation, the number of
shares of each class of capital stock authorized and the
number outstanding, the percentage of the outstanding shares
of each such class owned (directly or indirectly) by the
Borrower, and the number of shares covered by all
outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof. All of the
outstanding capital stock of each such Subsidiary has been
validly issued, is fully paid and non-assessable and all of
such capital stock that is reflected on Schedule 4.01(b) as
being owned (directly or indirectly) by the Borrower is
owned by the Borrower or one or more of its Subsidiaries
free and clear of all Liens, except Permitted Liens
described in clause (a) of the definition thereof. Each
such Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified or
licensed as a foreign corporation and is in good standing in
each jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify
or be licensed (except where the failure to so qualify or be
licensed would not have a material adverse effect on the
Borrower and its Subsidiaries, taken as a whole) and
(iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by
the Borrower of this Agreement and the consummation of the
transactions contemplated hereby are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's
articles of organization or by-laws, (ii) violate any law,
rule, regulation (including, without limitation, Regulation
G, T, U or X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award of any court or other governmental
authority, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust or lease, or any other
instrument binding on or affecting the Borrower, any of its
Subsidiaries or any of their properties, the contravention,
violation, conflict, breach, or default with, of or under
which could have a material adverse effect on the business,
condition (financial or otherwise), operations, performance
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or properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, or on the ability of the
Borrower to perform its Obligations hereunder or (iv) result
in or require the creation or imposition of any Lien upon or
with respect to any of the properties of the Borrower or any
of its Subsidiaries. Neither the Borrower nor any of its
Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which would be
reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or of the Borrower
and its Subsidiaries, taken as a whole.
(d) No authorization or approval or other action
by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is
required for the due execution, delivery and performance by
the Borrower of this Agreement or for the consummation of
the transactions contemplated thereby or hereby, except for
authorizations, approvals, actions, notices and filings
which have been duly obtained, taken, given or made and are
in full force and effect.
(e) This Agreement has been executed and
delivered by the Borrower and constitutes the legal, valid
and binding obligation of the Borrower, enforceable against
it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally or by application of
general principles of equity.
(f) The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 1993, and
the related consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the fiscal year
then ended, certified by Ernst & Young, and the unaudited
consolidated balance sheet of the Borrower and its
Subsidiaries as at June 30, 1994, and the related
consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the fiscal quarter then
ended, each fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as at such
date and the consolidated results of the operations of the
Borrower and its Subsidiaries for such fiscal period ended
on such date, all in accordance with GAAP applied on a
consistent basis.
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(g) No information, exhibit or report furnished
by the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or
pursuant to the terms of this Agreement, as such
information, exhibit or report has been amended,
supplemented or superseded by any other information, exhibit
or report later delivered to the same parties receiving such
information, exhibit or report, contained any material
misstatement of fact or omitted to state a material fact or
any fact necessary to make the statements contained therein,
in light of circumstances in which made, not misleading.
(h) Except as disclosed in Schedule 4.01(h)
hereto, there is no action, suit, investigation, litigation
or proceeding affecting the Borrower or any of its
Subsidiaries pending or, to the best knowledge of the
Borrower, threatened before any court, governmental agency
or arbitrator (i) that would be reasonably likely to have a
material adverse effect on the business, condition
(financial or otherwise), operations, performance or
properties of the Borrower or of the Borrower and its
Subsidiaries, taken as a whole, or (ii) that purports to
affect the legality, validity or enforceability of this
Agreement or the consummation of the transactions
contemplated thereby or hereby.
(i) The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or
carrying Margin Stock, and no proceeds of any Loan will be
used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying
any Margin Stock in violation of the Margin Regulations.
(j) No ERISA Event has occurred which resulted in
a material liability that is not being contested in good faith
by appropriate proceedings or has not been satisfied with
respect to any Plan with an Insufficiency in excess of
$5,000,000. Each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code.
(k) Neither the Borrower nor any ERISA Affiliate
has incurred any unpaid Withdrawal Liability, or is
reasonably expected to incur any Withdrawal Liability, to
any Multiemployer Plan, which is or would not be contested
in good faith by appropriate proceedings, in an amount in
excess of $5,000,000.
(l) Neither the business nor the properties of
the Borrower or any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor
dispute, or other casualty (whether or not covered by
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insurance) that would be reasonably likely to have a
material adverse effect on the business, condition
(financial or otherwise), operations, performance or
properties of the Borrower or the Borrower and its
Subsidiaries, taken as a whole.
(m) The operations and properties of the Borrower
and each of its Subsidiaries comply in all material respects
with all applicable laws, rules and regulations, including,
without limitation, all applicable environmental laws
(except to the extent that failure to so comply would not
have a material adverse effect upon the Borrower and its
Subsidiaries, taken as a whole).
(n) Neither the Borrower nor any of its
Subsidiaries is a party to any contract or any indenture,
loan or credit agreement or lease or subject to any charter
or corporate restriction that would be reasonably likely, in
light of the circumstances prevailing on the date of this
Agreement, to have a material adverse effect on the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or the Borrower
and its Subsidiaries, taken as a whole, or on the ability of
the Borrower to perform its obligations hereunder.
(o) The Borrower and each of its Subsidiaries has
filed, or there has been filed on its behalf, all tax
returns (Federal, State, local and foreign) required to be
filed prior to the date of the making of this representation
and warranty and has paid all taxes shown thereon to be due,
including interest, additions to taxes and penalties, or
provided adequate reserves for payment thereof, if failure
to pay such taxes could have a material adverse effect on
the Borrower or the Borrower and its Subsidiaries, taken as
a whole.
(p) Neither the Borrower nor any of its
Subsidiaries is an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the
making of the Loans nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of
the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(q) The Borrower is, individually and together
with its Subsidiaries, Solvent.
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as
any Revolving Loan, Swing Line Loan or Bid Rate Loan shall
remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and
cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules and regulations,
including, without limitation, all applicable environmental
laws.
(b) Payment of Taxes, Etc. Pay and discharge,
and cause each of its Subsidiaries to pay and discharge,
before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which
appropriate reserves are maintained in accordance with GAAP.
(c) Maintenance of Insurance. Maintain, and
cause each of its Subsidiaries to maintain, insurance with
responsible and reputable insurance companies or
associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc.
Preserve and maintain, and (except as permitted under
Section 5.02(b) or 5.02(c)) cause each of its Subsidiaries
to preserve and maintain, its corporate existence, rights
and franchises; provided, however, that neither the Borrower
nor any Subsidiary shall be required to preserve any right
or franchise if the Board of Directors of the Borrower or
such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may
be, and the loss thereof is not disadvantageous in any
material respect to the Borrower or the Lenders.
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(e) Visitation Rights. At any reasonable time
and from time to time, upon reasonable prior notice, permit
the Administrative Agent or any of the Lenders or agents or
representatives thereof, to the extent reasonably requested,
to examine and make copies of and abstracts from the records
and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and any of
its Subsidiaries with any of their officers or directors and
with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of
its Subsidiaries to keep, proper books of record and
account, in which appropriate entries shall be made of all
financial transactions and the assets and business of the
Borrower and each Subsidiary to the extent necessary to
permit the preparation of the financial statements required
to be delivered hereunder.
(g) Maintenance of Properties, Etc. Except to
the extent expressly permitted by this Agreement, maintain
and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its properties that are used or useful
in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct or
engage in, and cause each of its Subsidiaries to conduct,
any transaction otherwise permitted hereunder with any of
their respective Affiliates (other than the Borrower or any
of its Subsidiaries) on terms that are fair and reasonable
and no less favorable to the Borrower or such Subsidiary
(considered as a whole in conjunction with all other
existing arrangements and relationships with such Affiliate)
than it would obtain in a comparable arms'-length
transaction with a Person not an Affiliate.
(i) Maintenance of Consolidated Net Worth.
Maintain a Consolidated Net Worth, determined as of the end
of each fiscal quarter of the Borrower, of not less than
$600,000,000.
(j) Maintenance of Leverage Ratio. Maintain a
Leverage Ratio, determined as of the end of each fiscal
quarter of the Borrower, of not more than 0.50 to 1.00.
(k) Maintenance of Interest Coverage Ratio.
Maintain an Interest Coverage Ratio, determined as of the
end of each fiscal quarter for the period of four (4) fiscal
quarters then ended, of not less than 3:1.
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(l) Reporting Requirements. Furnish to the
Administrative Agent for distribution to the Lenders:
(i) as soon as possible and in any event
within three (3) days after the Borrower knows or has reason
to know of the occurrence of any Default, a statement of the
chief financial officer of the Borrower setting forth
details of such Default and the action that the Borrower
proposes to take with respect thereto;
(ii) 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 Borrower, commencing
with the quarter ended September 30, 1994, an unaudited
consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and unaudited
consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and
ending with the end of such quarter, setting forth in each
case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year (to the
extent that comparative figures were prepared for such
previous period), all in reasonable detail and duly
certified (subject to normal year-end audit adjustments and
the absence of footnotes) by the chief financial officer of
the Borrower as having been prepared in accordance with
GAAP, provided, that for purposes of this
Section 5.01(l)(ii) the Borrower shall furnish to the
Administrative Agent with copies for each Lender the
Borrower's report on Form 10-Q filed with the Securities and
Exchange Commission, together with (A) a certificate of said
officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the
Borrower proposes to take with respect thereto, and (B) a
schedule, certified by such officer, in reasonable detail,
of the computations used by the Borrower in determining, as
of the end of such fiscal quarter, compliance with the
covenants contained in Sections 5.01(i), (j) and (k) and
5.02(c) and (d);
(iii) as soon as available and in any event
within 90 days after the end of each fiscal year of the
Borrower, a copy of the consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal
period or year and consolidated statements of income,
retained earnings and cash flows of the Borrower and its
Subsidiaries for such period or fiscal year, in each case
certified without material adverse qualification, by Ernst &
Young or other independent public accountants of recognized
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standing acceptable to the Administrative Agent, provided,
that for purposes of this Section 5.01(l)(iii), the Borrower
shall furnish to the Administrative Agent with copies for
each Lender the Borrower's Annual Report on Form 10-K filed
with the Securities and Exchange Commission, together with
(A) a certificate of such accounting firm stating that in
the course of the regular audit of the financial statements
of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with GAAP,
such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the
opinion of such accounting firm, a Default has occurred and
is continuing, a statement as to the nature thereof, and
(B) a schedule, certified by the chief financial officer of
the Borrower, in form and substance satisfactory to the
Administrative Agent of the computations used by the
Borrower in determining, as of the end of such fiscal period
or year, compliance with the covenants contained in
Sections 5.01(i), (j) and (k) and 5.02 (c) and (d);
(iv) in the event of any change in GAAP from
the date of the financial statements referred to in Section
4.01(f) and upon delivery of any financial statement
required to be furnished under clauses (ii) or (iii) of this
Section 5.01(l), a statement of reconciliation conforming
any information contained in such financial statements
required to be furnished under clause (ii) or (iii) of this
Section 5.01(l) with GAAP as in effect on the date of the
financial statements referred to in Section 4.01(f);
(v) as soon as available and in any event no
later than 45 days after the end of each fiscal year of the
Borrower, financial projections prepared by management of
the Borrower, in form and substance satisfactory to the
Administrative Agent, of selected financial data (consisting
of earnings before interest and taxes, working capital
items, capital expenditures and depreciation) for the year
in which such projections are delivered and for each year
thereafter during the term of this Agreement;
(vi) promptly and in any event within 15
Business Days after the Borrower or any ERISA Affiliate
knows or has reason to know that any ERISA Event has
occurred, a statement of the chief financial officer of the
Borrower describing such ERISA Event and the action, if any,
that the Borrower or such ERISA Affiliate proposes to take
with respect thereto;
(vii) promptly and in any event within 10
Business Days after receipt thereof by the Borrower or any
ERISA Affiliate, copies of each notice from the PBGC stating
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its intention to terminate any Plan or to have a trustee
appointed to administer any Plan with an Insufficiency in
excess of $5,000,000;
(viii) promptly and in any event within 10
Business Days after receipt thereof by the Borrower or any
ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal
Liability by any Multiemployer Plan which liability is in
excess of $5,000,000, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any
Multiemployer Plan or (C) the amount of liability incurred,
or that may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause
(A) or (B) which liability is in excess of $5,000,000;
(ix) 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 Borrower or any of its Subsidiaries of the
type described in Section 4.01(h);
(x) promptly after the sending or filing
thereof, copies of all such proxy statements, financial
statements and reports that the Borrower or any of its
Subsidiaries sends to its public stockholders, if any, and
copies of all regular, periodic and special reports, and all
registration statements, that the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be
substituted therefor, or with any national securities
exchange;
(xi) promptly after the furnishing thereof,
copies of any statement or report furnished to any other
holder of the securities of the Borrower or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this
Section 5.01(l); and
(xii) such other information in respect of the
business, condition (financial or otherwise), operations,
performance or properties of the Borrower or any of its
Subsidiaries as any Lender may from time to time reasonably
request.
SECTION 5.02. Negative Covenants. So long as any
Revolving Loan, Swing Line Loan or Bid Rate Loan shall
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remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will not, without the written
consent of the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create,
incur, assume or suffer to exist, any Lien, or enter into
any agreement with any other Person not to create any Lien,
on or with respect to any of its properties of any
character, whether now owned or hereafter acquired (other
than, (i) in the case of the Borrower, capital stock of RBK
Holdings owned by it and capital stock of the Borrower
acquired in a Stock Repurchase and (ii) in the case of RBK
Holdings or any other Subsidiary of the Borrower, capital
stock of the Borrower owned by it), or sign or file, or
permit any of its Subsidiaries to sign or file, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its
Subsidiaries, as debtor, or sign, or permit any of its
Subsidiaries to sign, any security agreement authorizing any
secured party thereunder to file such financing statement,
or sell or assign, or permit any of its Subsidiaries to sell
or assign, any accounts, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Permitted Liens; and
(ii) Liens existing on the Closing Date and
described on Schedule 5.02(a).
(b) Mergers, Etc. Merge with or into or
consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its
assets or, except to the extent permitted by Section 5.02(c)
or Section 5.02(d), acquire all or substantially all of the
assets of any Person that is not principally engaged, at the
time of such acquisition, in the business of sporting goods,
leisure products, sports or fitness clubs, sports or leisure
services, footwear or sportswear apparel, or permit any of
its Subsidiaries to do so, except that any of the Borrower's
Subsidiaries may merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to, the Borrower or any of
its wholly-owned Subsidiaries, provided that at the time
thereof and after giving effect thereto no Default exists.
(c) Sales, Etc. of Assets. Sell, lease,
transfer or otherwise dispose of, or permit any of its
Subsidiaries to sell, lease, transfer or otherwise dispose
of, any of its assets (other than (i) in the case of the
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Borrower, capital stock of RBK Holdings owned by it and
capital stock of the Borrower acquired in a Stock Repurchase
and (ii) in the case of RBK Holdings or any other Subsidiary
of the Borrower, capital stock of the Borrower owned by it),
except (i) in the ordinary course of its business, (ii) in
connection with a transaction permitted by Section 5.02(b),
(iii) sales or other transfers of assets to the Borrower or
any of its wholly-owned Subsidiaries provided that at the
time thereof and giving effect thereto no Default exists and
provided, further, that the Borrower shall, at all times
after the Closing Date, directly own and operate, itself and
not through its interest in any Subsidiary, the United
States domestic Reebok fitness footwear and apparel business
and have a valid and enforceable license or other right to
use, and do business under, the name "Reebok"; provided,
however, that this Section 5.02(c) shall not apply, and the
Borrower and its Subsidiaries shall not be prohibited hereby
from selling, leasing, transferring or otherwise disposing
of assets, if at the end of the fiscal quarter most recently
ended prior to the consummation of any proposed sale, lease,
transfer or other disposition of assets and, to the best of
the Borrower's knowledge, on the date of consummation
thereof, the Leverage Ratio was and is less than 0.50 and
there exists on such date of consummation, both before and
after giving effect to such sale, lease, transfer or other
disposition, no Default; provided, further, that,
notwithstanding the foregoing provision, the first and
second provisos to clause (iii) of this Section 5.02(c)
shall at all times continue to apply and be in full force
and effect in respect of any proposed sale, lease, transfer
or other disposition of any of its assets by the Borrower to
any of its Subsidiaries.
(d) Change in Nature of Business. Except in
connection with a sale, lease, transfer or other disposition
of assets permitted under Section 5.02(c)(iii), make, or
permit any of its Subsidiaries to make, any material change
in the nature of the Borrower's business (considered on a
consolidated basis) as carried on at the date hereof,
provided, however, that the Borrower and its Subsidiaries
may invest, in any fiscal year, up to, but not in excess of,
an amount equal to 20% of Consolidated Total Assets, as
determined at the end of the fiscal quarter ended
immediately prior to the date on which any such investment
is proposed to be made, to acquire capital stock of, or all
or any substantial portion of the assets of, any other
Person, or of any division or line of business of any other
Person, which Person, or division of such Person, is engaged
in, or such line of business constitutes, a line or lines of
business other than sporting goods, sports or fitness clubs,
sports or leisure services, leisure products, footwear,
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sportswear apparel or sports, health or fitness television
or other media programming or one or more television
networks carrying primarily such programming.
(e) Compliance with ERISA. (i) Terminate, or
permit any ERISA Affiliate to terminate, any Plan so as to
result in any material liability of the Borrower or any
ERISA Affiliate to the PBGC or (ii) permit to exist any
occurrence of any Reportable Event (as defined in Title IV
of ERISA), or any other event or condition, that presents a
material risk of such a termination by the PBGC of any Plan
which would result in material liability of the Borrower or
any ERISA Affiliate to the PBGC.
(f) Accounting Changes. Make or permit, or
permit any of its Subsidiaries to make or permit, any change
in accounting policies affecting the presentation of
financial statements or reporting practices, except as
required or permitted by GAAP.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal
of any Loan when the same becomes due and payable, or fail
to pay, and such failure shall continue for three (3)
Business Days, any interest on any Loan or any Fees or other
amounts payable hereunder to the Administrative Agent or any
Lender when the same becomes due and payable; or
(b) Any representation or warranty made by the
Borrower under or in connection herewith shall prove to have
been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section
5.01(c), 5.01(d), 5.01(i), 5.01(j), 5.01(k), or 5.02 of this
Agreement; or
(ii) The Borrower shall fail to perform any
other term, covenant or agreement contained herein on its
part to be performed or observed if such failure shall
remain unremedied for 30 days after written notice thereof
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shall have been given to the Borrower by the Administrative
Agent; or
(d) The Borrower or any of its Subsidiaries shall
fail to pay any principal of, premium or interest on or any
other amount payable in respect of any Debt that is
outstanding in a principal amount of at least $10,000,000 in
the aggregate (but excluding Debt outstanding hereunder) of
the Borrower or such Subsidiary (as the case may be), when
the same becomes due and payable (whether, by scheduled
maturity, required prepayment, acceleration, demand or
otherwise); or any other event shall occur or condition
shall exist under any agreement or instrument relating to
any such Debt, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the
maturity of such Debt, or any such Debt shall be declared to
be due and payable or required to be prepaid, redeemed,
purchased or defeased (other than by a regularly scheduled
required prepayment, redemption, purchase or defeasance), or
an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the
stated maturity thereof, or the principal of any such Debt
is not repaid in full upon the maturity thereof or in full
or in part pursuant to any regularly scheduled required
prepayment, redemption, repurchase or defeasance; or
(e) (i) The Borrower or any of its Subsidiaries
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; (ii) any proceeding shall be
instituted by the Borrower or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property; (iii) there shall be
commenced against the Borrower or any of its Subsidiaries
any proceeding referred to in clause (ii) which results in
the entry of an order for relief or any such adjudication or
appointment or remains undismissed, undischarged or unbonded
for a period of 45 days; or (iv) the Borrower or any of its
Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this Section 6.01(e);
or
(f) Any judgment or order for the payment of
money in excess of $10,000,000 that is not covered by
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insurance shall be rendered against the Borrower or any of
its Subsidiaries and there shall be any period of 30
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect, unless such judgment or
order shall have been vacated or satisfied, or dismissed or
bonded pending appeal, or, in the case of a judgment or
order the entire amount of which is covered by insurance, is
the subject of a binding agreement with the plaintiff and
the insurer covering payment therefor; or
(g) Any non-monetary judgment or order shall be
rendered against the Borrower or any of its Subsidiaries
that is reasonably likely to have a material adverse effect
on (i) the business, condition (financial or otherwise),
operations, performance or properties of the Borrower or of
the Borrower and its Subsidiaries, taken as a whole,
(ii) the ability of the Borrower to perform its obligations
hereunder, or (iii) the rights and remedies of the
Administrative Agent or the Lenders hereunder, and there
shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect unless
such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or
(h) Any Person or group of related Persons (other
than (i) RBK Holdings, only with respect to stock treated as
treasury stock and (ii) Paul Fireman and his immediate
family or his estate, heirs, executor, administrator or
personal representative or a trust for the benefit of any of
them or a corporation that is wholly-owned, beneficially and
of record, by one or more of them, in either case so long as
one or more of such Persons has the sole right to vote stock
so held (collectively, the "Fireman Group")) shall at any
time, for any reason, (A) beneficially own, directly or
indirectly, 30% (or, if higher, the percentage of the
outstanding capital stock of the Borrower owned at the
applicable time by the Fireman Group) or more of the
outstanding capital stock of the Borrower having voting
power under ordinary circumstances to elect the Board of
Directors of the Borrower or (B) have the power, directly or
indirectly, to direct or cause the direction of the
management and policies of the Borrower; or
(i) Any ERISA Event shall have occurred with
respect to a Plan and (i) liability arising from or relating
to such ERISA Event shall not be paid within 30 days after
such occurrence unless the same is disputed in good faith by
appropriate proceedings and (ii) the sum (determined as of
the date of occurrence of such ERISA Event) of such unpaid
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liability and all other unpaid liabilities arising from or
relating to ERISA Events which shall have occurred or exist
with respect to any Plan is equal to or greater than
$10,000,000; or
(j) Any of Borrower or any of its ERISA
Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan that is not satisfied within 30
days after the same becomes due (unless the same is timely
disputed in good faith by appropriate proceedings) and the
sum (determined as of the date of such notification) of such
amount and all other amounts required to be paid to
Multiemployer Plans by such ERISA Affiliates in satisfaction
of unpaid Withdrawal Liabilities (determined as of the date
of such notification) exceeds $10,000,000; or
(k) The Borrower or any ERISA Affiliate shall
have committed a failure described in Section 302(f)(1) of
ERISA and the amount determined under Section 302(f)(3) of
ERISA is equal to or greater than $10,000,000;
then, and in any such event (other than such an event
described in Section 6.01(e) with respect to the Borrower),
the Administrative Agent (i) shall at the request, or may
with the consent, of the Required Lenders, by notice to the
Borrower, declare the Commitment of each Lender to make
Loans to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower,
declare the Loans, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and
payable, and thereupon the Loans, all such interest and all
such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the
Borrower. If an Event of Default occurs under
Section 6.01(e) with respect to the Borrower, then the
Commitments shall automatically and immediately terminate,
and the obligation of the Lenders to make any Loan
hereunder, thereupon shall cease, and the unpaid principal
amount of and any accrued interest on all of the Loans
automatically shall become due and payable, without
presentment, demand, protest, notice or other requirements
of any kind, all of which are hereby expressly waived by the
Borrower.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each
Lender hereby appoints and authorizes the Administrative
Agent to take such action as Administrative Agent on its
behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not
expressly provided for hereby (including, without
limitation, enforcement or collection of the Debt resulting
from the Loans), the Administrative Agent shall not be
required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and
such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not
be required to take any action that exposes the
Administrative Agent to personal liability or that is
contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender (i)
prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement, and (ii) a copy of
any such notice given by the Borrower, if such Lender so
requests.
SECTION 7.02. Administrative Agent's Reliance,
Etc. Neither the Administrative Agent, the Arranger or any
of their directors, officers, Administrative Agents or
employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection herewith,
except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the
Lender that made any Loan as the holder of the Debt
resulting therefrom until the Administrative Agent receives
and accepts an Assignment and Acceptance entered into by
such Lender, as assignor, and its assignee, as provided in
Section 8.07; (ii) may consult with legal counsel,
independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) and
the Arranger make no warranty or representation to any
Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in
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connection herewith; (iv) and the Arranger shall not have
any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions
hereof on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower;
(v) and the Arranger shall not be responsible to any Lender
for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value hereof or any other
instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect hereof by
acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy,
cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 7.03. Credit Suisse and Affiliates.
With respect to its Commitment and the Loans made by it,
Credit Suisse shall have the same rights and powers
hereunder as any other Lender and may exercise the same as
though it were not the Administrative Agent and the
Arranger; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Credit Suisse in its
individual capacity. Credit Suisse and its Affiliates may
accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do
business with or own securities of the Borrower or any such
Subsidiary, all as if Credit Suisse were not the
Administrative Agent and the Arranger and without any duty
to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each
Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or the Arranger or
any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or the
Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not
taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree
to indemnify the Administrative Agent and the Arranger (to
the extent not promptly reimbursed by the Borrower), ratably
according to the respective principal amounts of the Loans
then owing to each of them (or if no Loans are at the time
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outstanding or if any Loans are then owing to Persons that
are not Lenders, ratably according to the respective amounts
of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against the Administrative Agent or
the Arranger in any way relating hereto or arising hereunder
or any action taken or omitted by the Administrative Agent
or the Arranger hereunder; provided, however, that no Lender
shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Administrative Agent's or the Arranger's gross negligence or
willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent or
the Arranger promptly upon demand for its ratable share of
any costs and expenses payable by the Borrower under Section
8.04, to the extent that the Administrative Agent or the
Arranger is not promptly reimbursed for such costs and
expenses by the Borrower.
SECTION 7.06. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor
Administrative Agent, which shall be a Lender or, if no
Lender consents to act as Administrative Agent hereunder, a
financial institution approved by the Borrower, and as to
which the Borrower will not unreasonably withhold its
approval. If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the laws of
(or having a lending branch within) the United States of
America or of any State thereof and having a combined
capital and surplus of at least $50,000,000 which is
acceptable to the Borrower, and as to which the Borrower
will not unreasonably withhold its approval. Upon the
acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged
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from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this
Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to
any departure by the Borrower therefrom, shall in any event
be effective unless the same shall be in writing and such
amendment, waiver or consent shall be consented to in one or
more writings signed by or consented to by the Required
Lenders, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by or
consented to by all the Lenders, do any of the following:
(i) waive any of the conditions specified in (x) Section
3.01, (y) in the case of the initial Borrowing,
Section 3.02, or (z) Section 3.03, (ii) change the
definition of the term "Required Lenders", the percentage of
the Commitments or of the aggregate unpaid principal amount
of the Loans, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action
hereunder, (iii) amend this Section 8.01, (iv) increase the
Commitments of the Lenders or subject the Lenders to any
additional obligations, (v) reduce the principal of, or
interest on, the Loans or any fees or other amounts payable
hereunder or (vi) postpone any date fixed for any payment of
principal of, or interest on, the Loans or any fees or other
amounts payable hereunder; provided, however, that no
amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under this
Agreement.
SECTION 8.02. Notices, Etc. All notices, demands
and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy, telex or cable
communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered:
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if to the Borrower: Reebok International Ltd.
100 Technology Center Drive
Stoughton, Massachusetts 02072
Attn: Treasurer
if to any Lender
signatory hereto: at its Domestic Lending Office
specified opposite its name on
Schedule I hereto
if to any other Lender: at its Domestic Lending Office
specified in the Assignment and
Acceptance pursuant to which it
became a Lender
if to the 12 East 49th Street
Administrative Agent: New York, New York 10017
Attention: Administrative
Assistant -- Syndications
Department, Credit Suisse/Ref.:
Reebok
or, as to each party, at such other address as shall be
designated by such party in a written notice to the other
parties. All such notices and communications shall be
effective (i) when received, if mailed or delivered, or
(ii) when delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to
the cable company, respectively, except that notices and
communications to the Administrative Agent pursuant to
Article II, III or VII shall not be effective until received
by the Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on
the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The
Borrower agrees to pay on demand (i) all reasonable out-of-
pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery,
administration, modification and amendment hereof
(including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and
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expenses and (B) the reasonable fees and expenses of counsel
for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection
or preservation of rights or interests, hereunder and with
respect to negotiations with the Borrower regarding any
Default or any events or circumstances that may give rise to
a Default), (ii) all reasonable out-of-pocket costs and
expenses of the Arranger in connection herewith, including,
without limitation, expenses of the type described in
clauses (i)(A) and (i)(B) above, and (iii) all costs and
expenses of the Administrative Agent and the Lenders in
connection with the enforcement hereof, whether in any
action, suit or litigation, any bankruptcy, insolvency or
other similar proceeding affecting creditors' rights
generally or otherwise (including, without limitation, the
reasonable fees and expenses of counsel for the
Administrative Agent and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold
harmless the Administrative Agent and each Lender and each
of their Affiliates and their respective officers,
directors, employees, Administrative Agents and advisors
(each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses
of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of
or in connection with this Agreement or the transactions
contemplated hereby or thereby, whether or not an
Indemnified Party is a party thereto and whether or not the
transactions contemplated hereby are consummated, except to
the extent such claim, damage, loss, liability or expense
(i) is found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct
or (ii) arises from any legal proceeding brought against a
Lender by or on behalf of the Borrower in which such Lender
is found in a final, non-appealable judgment by a court of
competent jurisdiction to have failed to perform its
obligations under Section 2.01 hereof or (iii) arises from
any legal proceedings commenced against any Lender by any
other Lender or the Administrative Agent.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of
Default and (b) the making of the request or the granting of
the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Loans due and payable
pursuant to the provisions of Section 6.01, each Lender is
hereby authorized at any time and from time to time, to the
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fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Lender or any bank
controlling such Lender to or for the credit or the account
of the Borrower against any and all of the Obligations of
the Borrower now or hereafter existing under this Agreement,
irrespective of whether such Lender shall have made any
demand under this Agreement and although such obligations
may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such
Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section
are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such
Lender may have.
SECTION 8.06. Binding Effect. This Agreement
shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender
that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not
have the right to assign its rights or obligations hereunder
or any interest herein without the prior written consent of
the Lenders and the Lenders may assign their respective
rights or obligations hereunder or any interest herein only
in accordance with Section 8.07.
SECTION 8.07. Assignments and Participations.
(a) Each Lender may assign to one or more banks
or other entities all or a portion of its rights and
obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Loans
owing to it); provided, however, that (i) the parties to
each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $2,500, (ii) the Borrower
shall have consented to such assignment, such consent not to
be unreasonably withheld (such consent shall not be required
(x) if the Assignee shall be a Lender under this Agreement
at the time immediately preceding such assignment or (y) as
set forth in the last sentence of this subsection 8.07(a)),
(iii) the Commitment amount of the assigning Lender being
assigned shall in no event be less than the lesser of
(x) the entire Commitment of such Lender at such time or
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<PAGE>
(y) $6,666,666.66 and (iv) such assignment shall be effected
contemporaneously with an assignment to the same bank or
other entity of a constant percentage of all of the
assigning Lender's rights and obligations under and in
respect of that certain 364-day $200,000,000 Credit
Agreement dated as of even date herewith among the Borrower,
the Lenders, the Administrative Agent and the Arranger.
Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at
least five Business Days after the delivery thereof to the
Administrative Agent or, if so specified in such Assignment
and Acceptance, the date of acceptance thereof by the
Administrative Agent, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto, except that such Lender shall continue to be an
"Indemnified Party" under Section 8.04(b)). Notwithstanding
any of the foregoing or any other provision herein, any
Lender may at any time (without the consent of the Borrower
being required) assign all or any portion of its rights
under this Agreement including, without limitation, its
Loans, to (i) a Federal Reserve Bank as collateral in
accordance with Regulation A of the Board of Governors of
the Federal Reserve System and the applicable circular of
such Federal Reserve Bank or (ii) any Affiliate of such
Lender (provided, that for purposes of this Section 8.07(a)
only, the amount "5%" set forth in the definition of
"Affiliate" shall be deemed to be "51%"). In order to
facilitate an assignment to a Federal Reserve Bank in
accordance with clause (i) of the previous sentence, the
Borrower shall, at the request of the assigning Lender,
promptly execute and deliver to such assigning Lender a
note, in a form reasonably acceptable to the Administrative
Agent and the Borrower, evidencing the Loans made to the
Borrower by the assigning Lender hereunder.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender
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<PAGE>
makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its
Subsidiaries or the performance or observance by the
Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based
on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at
its address referred to in Section 8.02 a copy of each
Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and its assignee,
the Administrative Agent shall, if such Assignment and
67
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<PAGE>
Acceptance has been completed and is in substantially the
form of Exhibit A hereto and relates to an assignment that
complies with Section 8.07(a), (i) accept such Assignment
and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof
to the Borrower.
(e) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of
its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments and
the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement,
and (iv) no participant under such participation shall have
any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent
that such amendment, waiver or consent would reduce the
principal of or interest on the Loans or any fees or other
amounts payable hereunder, in each case to the extent
subject to such participation, or postpone any date fixed
for any payment of principal of or interest on the Loans or
any fees or other amounts payable hereunder, in each case to
the extent subject to such participation.
(f) Any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 8.07, disclose to the
assignee or participant or proposed assignee or participant,
any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided, however,
that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree
to preserve the confidentiality of any confidential
information relating to the Borrower received by it from
such Lender.
SECTION 8.08. Confidentiality. Each Lender
agrees to maintain any Confidential Information that it may
receive from the Borrower or one of its Subsidiaries
pursuant to this Agreement confidential and that it shall
not disclose such information to third parties without the
prior consent of the Borrower, except for disclosure:
(a) to legal counsel, accountants and other professional
68
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<PAGE>
advisors to the Lender; (b) to regulatory officials having
jurisdiction over the Lender; (c) as required by law or
legal process or in connection with any legal proceeding to
which the Lender is a party or is otherwise subject; and
(d) to another financial institution in connection with a
disposition or proposed disposition of all or part of a
Lender's interests hereunder, whether by participation,
assignment or other transfer, which financial institution
shall have agreed in writing to be subject to the
confidentiality provisions of this Section 8.08.
SECTION 8.09. Governing Law; Submission to
Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
(b) The Borrower hereby expressly and irrevocably
agrees and consents that any suit, action or proceeding
arising out of or relating to this Agreement and the
transactions contemplated herein may be instituted by the
Administrative Agent or any Lender in any State or Federal
court sitting in the County of New York, State of New York,
United States of America and, by the execution and delivery
of this Agreement, the Borrower expressly waives any
objection that it may have now or hereafter to the laying of
the venue or to the jurisdiction of any such suit, action or
proceeding, and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any
such suit, action or proceeding.
(c) The Borrower agrees that service of process
may be made on the Borrower by personal service of a copy of
the summons and complaint or other legal process in any such
suit, action or proceeding, or by registered or certified
mail (postage prepaid) to the address of the Borrower
specified in Section 8.02, or by any other method of service
provided for under the applicable laws in effect in the
State of New York.
(d) Nothing contained in subsections (b) or (c)
hereof shall preclude the Administrative Agent, the Arranger
or any Lender from bringing any suit, action or proceeding
arising out of or relating to this Agreement or the other
Loan Documents in the courts of any place where the Borrower
or any of the Borrower's property or assets may be found or
located. To the extent permitted by the applicable laws of
any such jurisdiction, the Borrower hereby irrevocably
submits to the jurisdiction of any such court and expressly
waives, in respect of any such suit, action or proceeding,
69
PAGE
<PAGE>
the jurisdiction of any other court or courts which now or
hereafter, by reason of its present or future domicile, or
otherwise, may be available to it.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS
AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED
IN CONNECTION HEREWITH, THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ARRANGER AND EACH LENDER EACH HEREBY AGREES, TO
THE EXTENT PERMITTED BY LAW, THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING HERETO OR TO THE TRANSACTIONS
CONTEMPLATED HEREBY; AND THE BORROWER, THE ADMINISTRATIVE
AGENT, THE ARRANGER AND EACH LENDER EACH HEREBY WAIVES, TO
THE EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY HAVE
THAT SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 8.10. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of
this Agreement.
70
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
REEBOK
INTERNATIONAL LTD.,
as Borrower
By: /S/ PAUL R. DUNCAN
Name: Paul R. Duncan
Title: Executive Vice President
and Chief Financial Officer
CREDIT SUISSE, as
Administrative Agent and as
Arranger
By: /S/ LYNN ALLEGAERT
Name: Lynn Allegaert
Title:Member of SeniorManagement
By: /S/ MATT MOSER
Name: Matt Moser
Title: Associate
Lenders:
CREDIT SUISSE
By: /S/ LYNN ALLEGAERT
Name: Lynn Allegaert
Title:Member of SeniorManagement
By: /S/ MATT MOSER
Name: Matt Moser
Title: Associate
71
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<PAGE>
ABN AMRO BANK N.V.
By: /S/ JAMES E. DAVIS
Name: James E. Davis
Title: Vice President
By: /S/ E.O. MAY
Name: E.O. May
Title: GVP
CIBC, INC.
By: /S/ JUDITH DOMKOWSKI
Name: Judith Domkowski
Title: VP
CITIBANK, N.A.
By: /S/ W. DWIGHT RAIFORD
Name: W. Dwight Raiford
Title: V.P.
CREDIT LYONNAIS NEW YORK
BRANCH
By: /S/ ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Senior Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By: /S/ ROBERT IVOSEVICH
Name: Robert Ivosevich
Title: Authorized Signature
72
PAGE
<PAGE>
ISTITUTO BANCARIO SAN PAOLO DI
TORINO
By: /S/ GERARD M. MCKENNA
Name: Gerard M. McKenna
Title: Vice President
STANDARD CHARTERED BANK
By: /S/ DAVID GODWIN
Name: David Godwin
Title: Vice President
THE BANK OF TOKYO TRUST
COMPANY
By: /S/ MICHAEL J. CRONIN
Name: Michael J. Cronin
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON
By: /S/ RICHARD D. HILL, JR.
Name: Richard D. Hill, Jr.
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By: /S/ LINDA M. HARRIS
Name: Linda M. Harris
Title: SVP
73
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<PAGE>
REEBOK INTERNATIONAL LTD.
(Amounts in Thousands, Except Per Share Data)
Exhibit 11 - Statement RE: Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
__________________ ________________
1994 1993 1994 1993
____ ____ ____ ____
<S> <C> <C> <C> <C>
Primary
________________________________
Average shares outstanding 81,968 85,630 82,626 87,199
Net effect of dilutive stock options 2,123 1,276 1,978 1,918
_______ _______ ________ ________
Total 84,091 86,906 84,604 89,117
======= ======= ======== ========
Net income $84,655 $63,933 $201,452 $172,730
======= ======= ======== ========
Per share amount $ 1.01 $ 0.74 $ 2.38 $ 1.94
======= ======= ======== ========
Fully Diluted
________________________________
Average shares outstanding 81,968 85,630 82,626 87,199
Net effect of dilutive stock options 2,228 1,276 2,228 1,965
_______ _______ ________ ________
Total 84,196 86,906 84,854 89,164
======= ======= ======== ========
Net income $84,655 $63,933 $201,452 $172,730
======= ======= ======== ========
Per share amount $ 1.01 $ 0.74 $ 2.37 $ 1.94
======= ======= ======== ========
</TABLE>
PAGE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1994 CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000770949
<NAME> REEBOK INTERNATIONAL LTD.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 97,038
<SECURITIES> 0
<RECEIVABLES> 695,090
<ALLOWANCES> 50,309
<INVENTORY> 518,367
<CURRENT-ASSETS> 1,352,422
<PP&E> 263,832
<DEPRECIATION> 114,426
<TOTAL-ASSETS> 1,643,245
<CURRENT-LIABILITIES> 522,679
<BONDS> 134,863
<COMMON> 1,176
0
0
<OTHER-SE> 961,275
<TOTAL-LIABILITY-AND-EQUITY> 1,643,245
<SALES> 2,571,267
<TOTAL-REVENUES> 2,571,267
<CGS> 1,550,641
<TOTAL-COSTS> 1,550,641
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,757
<INCOME-PRETAX> 324,922
<INCOME-TAX> 123,470
<INCOME-CONTINUING> 201,452
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 201,452
<EPS-PRIMARY> 2.38
<EPS-DILUTED> 2.37
</TABLE>
