SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended May 3, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-724
PHILLIPS-VAN HEUSEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1166910
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1290 Avenue of the Americas New York, New York 10104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (212) 541-5200
Indicate by check mark whether 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 registrant was required to file such reports), and (2) has
been subject to such filing requirement for the past 90 days.
Yes X No
The number of outstanding shares of common stock, par value $1.00 per
share, of Phillips-Van Heusen Corporation as of June 2, 1998: 27,192,372
shares.<PAGE>
PHILLIPS-VAN HEUSEN CORPORATION
INDEX
PART I -- FINANCIAL INFORMATION
Independent Accountants Review Report................................ 1
Condensed Consolidated Balance Sheets as of May 3, 1998 and
February 1, 1998...................................................... 2
Condensed Consolidated Statements of Operations for the thirteen weeks
ended May 3, 1998 and May 4, 1997..................................... 3
Condensed Consolidated Statements of Cash Flows for the thirteen
weeks ended May 3, 1998 and May 4, 1997............................... 4
Notes to Condensed Consolidated Financial Statements.................. 5-6
Management's Discussion and Analysis of Results of Operations
and Financial Condition............................................... 7-10
PART II -- OTHER INFORMATION
ITEM 6 - Exhibits and Reports on Form 8-K............................. 11-13
Signatures............................................................ 14
Exhibit--Acknowledgment of Independent Accountants.................... 15
Exhibit--Financial Data Schedule...................................... 16
<PAGE>
Independent Accountants Review Report
Stockholders and Board of Directors
Phillips-Van Heusen Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
Phillips-Van Heusen Corporation as of May 3, 1998, and the related condensed
consolidated statements of operations and cash flows for the thirteen week
periods ended May 3, 1998 and May 4, 1997. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which will
be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Phillips-Van Heusen Corporation
as of February 1, 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended (not presented
herein) and in our report dated March 10, 1998, except for the long-term debt
note, which is as of April 22, 1998, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of February
1, 1998, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
ERNST & YOUNG LLP
New York, New York
May 20, 1998
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<PAGE>
Phillips-Van Heusen Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
UNAUDITED AUDITED
May 3, February 1,
1998 1998
<S> <C> <C>
ASSETS
Current Assets:
Cash, including cash equivalents of $6,009 and $1,413 $ 12,694 $ 11,748
Trade receivables, less allowances of $2,769 and $2,911 101,901 88,656
Inventories 261,739 249,534
Other, including deferred taxes of $19,031 34,994 35,080
Total Current Assets 411,328 385,018
Property, Plant and Equipment 92,614 94,582
Goodwill 115,683 116,467
Other Assets, including deferred taxes of $44,659 and
$44,094 70,620 64,392
$690,245 $660,459
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 48,000 $ 7,900
Accounts payable 32,214 36,233
Accrued expenses 82,623 89,202
Total Current Liabilities 162,837 133,335
Long-Term Debt 249,349 241,004
Other Liabilities 65,262 65,815
Stockholders' Equity:
Preferred Stock, par value $100 per share; 150,000
shares authorized; no shares outstanding
Common Stock, par value $1 per share; 100,000,000
shares authorized; shares issued 27,188,644
and 27,179,244 27,189 27,179
Additional Capital 117,019 116,954
Retained Earnings 68,589 76,172
Total Stockholders' Equity 212,797 220,305
$690,245 $660,459
</TABLE>
See accompanying notes.
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<PAGE>
Phillips-Van Heusen Corporation
Condensed Consolidated Statements of Operations
Unaudited
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
May 3, May 4,
1998 1997
<S> <C> <C>
Net sales $295,765 $285,925
Cost of goods sold 193,257 186,957
Gross profit 102,508 98,968
Selling, general and administrative expenses 101,954 100,654
Year 2000 computer conversion expenses 2,000
Loss before interest, taxes and extraordinary item (1,446) (1,686)
Interest expense, net 5,466 4,932
Loss before taxes and extraordinary item (6,912) (6,618)
Income tax benefit 2,427 2,078
Loss before extraordinary item (4,485) (4,540)
Extraordinary loss on debt retirement (1,060)
Net loss $ (5,545) $ (4,540)
Basic and diluted net loss per share:
Loss before extraordinary item $ (0.16) $ (0.17)
Extraordinary loss (0.04)
Net loss per share $ (0.20) $ (0.17)
See accompanying notes.
</TABLE>
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<PAGE>
Phillips-Van Heusen Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited
(In thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
May 3, May 4,
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES:
Net Loss $ (5,545) $ (4,540)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 6,785 6,982
Equity income in Pyramid Sportswear (260) (228)
Deferred income taxes (565)
Changes in operating assets and liabilities:
Receivables (13,245) (5,398)
Inventories (12,205) (29,690)
Accounts payable and accrued expenses (10,428) (3,869)
Deferred landlord contributions (1,129) (1,382)
Other-net (1,264) (967)
Net Cash Used By Operating Activities (37,856) (39,092)
INVESTING ACTIVITIES:
Property, plant and equipment acquired (3,553) (3,354)
FINANCING ACTIVITIES:
Net proceeds from issuance of 9.5% senior
subordinated notes 145,104
Repayment of 7.75% senior notes (49,286)
Proceeds from revolving lines of credit 117,000 49,001
Payments on revolving lines of credit (168,500)
Exercise of stock options 75 105
Cash dividends (2,038) (2,030)
Net Cash Provided By Financing Activities 42,355 47,076
Increase In Cash 946 4,630
Cash at beginning of period 11,748 11,590
Cash at end of period $ 12,694 $ 16,220
See accompanying notes.
</TABLE>
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<PAGE>
PHILLIPS-VAN HEUSEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
GENERAL
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not contain all
disclosures required by generally accepted accounting principles for complete
financial statements. Reference should be made to the annual financial
statements, including the footnotes thereto, included in the Company's Annual
Report to Stockholders for the year ended February 1, 1998.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from the estimates.
The results of operations for the thirteen weeks ended May 3, 1998 and May 4,
1997 are not necessarily indicative of those for a full fiscal year due, in
part, to seasonal factors. The data contained in these financial statements
are unaudited and are subject to year-end adjustments; however, in the opinion
of management, all known adjustments (which consist only of normal recurring
accruals) have been made to present fairly the consolidated operating results
for the unaudited periods.
Certain reclassifications have been made to the condensed consolidated
financial statements for the thirteen weeks ended May 4, 1997 to present them
on a basis consistent with the thirteen weeks ended May 3, 1998.
INVENTORIES
Inventories are summarized as follows:
May 3, February 1,
1998 1998
Raw materials $ 14,325 $ 15,964
Work in process 14,509 15,216
Finished goods 232,905 218,354
Total $261,739 $249,534
Inventories are stated at the lower of cost or market. Cost for apparel
inventories, excluding certain sportswear inventories, is determined using the
last-in, first-out method (LIFO). Cost for footwear and certain sportswear
inventories is determined using the first-in, first-out method (FIFO).
Inventories would have been approximately $12,200 higher than reported at May
3, 1998 and February 1, 1998, if the FIFO method of inventory accounting had
been used for all apparel.
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The final determination of cost of sales and inventories under the LIFO method
can only be made at the end of each fiscal year based on inventory cost and
quantities on hand. Interim LIFO determinations are based on management's
estimates of expected year-end inventory levels and costs. Such estimates are
subject to revision at the end of each quarter. Since estimates of future
inventory levels and costs are subject to external factors, interim financial
results are subject to year-end LIFO inventory adjustments.
EXTRAORDINARY LOSS
On April 22, 1998, PVH issued $150 million of 9.5% senior subordinated notes
due May 1, 2008 and used the net proceeds to retire its intermediate term
7.75% senior notes and to repay a portion of the borrowings under its prior
revolving credit facility. On the same day, PVH refinanced its revolving
credit facility by entering into a new $325 million senior secured credit
facility. In connection therewith, the Company paid a yield maintenance
premium of $1.4 million and wrote off certain debt issue costs of $0.2
million. These items have been classified as an extraordinary loss, net of
tax benefit of $0.5 million, in the first quarter of 1998.
SEGMENT DATA
PVH manages and analyzes its operating results by its two vertically
integrated business segments: (i) Apparel and (ii) Footwear and Related
Products. In identifying its reportable segments under the provisions of FASB
Statement No. 131, "Disclosures about Segments of an Enterprise and Related
Information", PVH evaluated its operating divisions and product offerings.
Under the aggregation criteria of Statement No. 131, PVH aggregated the
results of its apparel divisions into the Apparel segment. This segment
derives revenues from marketing dresswear, sportswear and accessories,
principally under the brand names Van Heusen, Izod, Izod Club, Gant and
Geoffrey Beene. PVH's footwear business has been identified as the Footwear
and Related Products segment. This segment derives revenues from marketing
casual and weekend footwear, apparel and accessories under the Bass brand
name.
Sales for both segments occur principally in the United States. There are no
inter-segment sales. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition" for additional segment data.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
The following statements of operations and segment data show the Company's
results from ongoing operations:
<TABLE>
<CAPTION>
Statements of Operations
(In thousands) Thirteen Weeks Ended
May 3, May 4,
1998 1997
<S> <C> <C>
Net sales $295,765 $285,925
Cost of goods sold 193,257 186,957
Gross profit 102,508 98,968
Selling, general and administrative expenses 101,954 100,654
Income (loss) before year 2000 computer
conversion expenses, interest and taxes 554 (1,686)
Year 2000 computer conversion expenses (2,000)
Loss before interest and taxes (1,446) (1,686)
Interest expense, net 5,466 4,932
Loss before taxes (6,912) (6,618)
Income tax benefit 2,427 2,078
Loss from ongoing operations $ (4,485) $ (4,540)
Segment Data
Thirteen Weeks Ended
May 3, May 4,
1998 1997
Net sales-apparel $205,389 $193,298
Net sales-footwear and related products 90,376 92,627
Total net sales $295,765 $285,925
Operating income (loss)-apparel $ 3,226 $ (544)
Operating income-footwear and
related products 581 2,648
Total operating income 3,807 2,104
Corporate expenses (3,253) (3,790)
Income (loss) before Year 2000 computer
conversion expenses, interest and taxes $ 554 $ (1,686)
</TABLE>
Excluding Year 2000 computer conversion expenses (net of tax benefit), basic and
diluted net loss per share before extraordinary item for the thirteen weeks
ended May 3, 1998, would have been ($0.12).
-7-
<PAGE>
RESULTS OF OPERATIONS
Thirteen Weeks Ended May 3, 1998 Compared to Thirteen Weeks Ended
May 4, 1997
APPAREL
Net sales of the Apparel segment in the first quarter were $205.4 million in
1998 and $193.3 million last year, an increase of 6.3%. This increase is due
to a 19% increase in branded wholesale apparel sales, offset, in part, by the
impact of the planned reduction in the number of retail outlet stores operated
by the Company and the sale of the Company's private label sweater
manufacturing business in the fourth quarter of 1997.
Gross profit on apparel sales in the first quarter was 33.6% in 1998 compared
with 33.0% in the prior year, the fourth consecutive quarter of increased
gross profit in this segment. This improvement is primarily a function of the
changing mix in the Company's apparel business as evidenced by strong growth
in branded wholesale sales and the planned reduction/divestment of
underperforming businesses.
Selling, general and administrative expenses as a percentage of apparel sales
in the first quarter decreased to 32.0% this year from 33.2% last year. The
improved expense level relates principally to the Company's program of closing
underperforming retail outlet stores.
FOOTWEAR AND RELATED PRODUCTS
Net sales of the Footwear and Related Products segment in the first quarter
were $90.4 million in 1998 and $92.6 million last year, a decrease of 2.4%.
This decrease was expected as Bass' sales and gross margins continued to be
impacted by the unsuccessful repositioning in 1997 of the Bass brand to higher
price points.
Gross profit on footwear and related products sales in the first quarter was
36.8% in 1998 compared with 38.4% in the prior year. As noted above, this
decrease was expected. The Bass inventory position is now substantially
improved, and the Company believes that the impact of the unsuccessful
repositioning in 1997 should be behind it by the third quarter of 1998.
Selling, general and administrative expenses as a percentage of footwear and
related products sales in the first quarter were 36.1% this year compared with
35.6% last year. While expense levels were essentially flat, the lower volume
of sales caused the percentage relationship to net sales to increase.
INTEREST EXPENSE
Interest expense in the first quarter was $5.5 million in 1998 compared with
$4.9 million last year. This increase resulted from increased debt levels
associated with funding the Company's 1997 restructuring initiatives. On
April 22, 1998, the Company issued $150 million of 9.5% senior subordinated
notes due May 1, 2008, and used the net proceeds to retire its intermediate
term 7.75% senior notes and reduce its revolving credit debt. At the same
time, the Company re-syndicated and refinanced its revolving credit facility
with a new $325 million senior secured credit facility with a group of 12
banks. While these refinancings will increase the overall cost of the
-8-
<PAGE>
Company's borrowings, the Company believes they should provide a secure
financial base which will allow the Company to focus its attention on the
execution of its strategic business plan.
INCOME TAXES
Income taxes were estimated at a rate of 35.1% for the current year compared
with last year's first quarter rate of 31.4%. The increase relates
principally to the divestment in the fourth quarter of 1997 of the Company's
sweater manufacturing operations in Puerto Rico, which had provided income
that was exempt from Federal income taxes.
CORPORATE EXPENSES
Corporate expenses in the first quarter were $3.3 million in 1998 compared
with $3.8 million last year.
YEAR 2000
The Company incurred $2.0 million of computer conversion expenses in the first
quarter of 1998 in connection with making its computer systems Year 2000
compliant. The Company expects to incur additional Year 2000 computer
conversion expenses of approximately $6.5 million in the current year and $8.5
million in 1999. The Company is utilizing both internal and external
resources to remediate, or replace, and test the software for Year 2000
modifications, and anticipates completing the Year 2000 Project by June 30,
1999.
The cost of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's estimates. The
Company presently believes that the Year 2000 issue will not pose significant
operational problems for its computer systems. However, if such modifications
and conversions are not made, or are not completed timely, or the systems of
other companies on which the Company's systems and operations rely are not
converted on a timely basis, the Year 2000 issue could have a material adverse
impact on the Company's operations.
SEASONALITY
PVH's business is seasonal, with higher sales and income during its third and
fourth quarters, which coincide with PVH's two peak retail selling seasons:
the first running from the start of the back to school and fall selling
seasons beginning in August and continuing through September, and the second
being the Christmas selling season beginning with the weekend following
Thanksgiving and continuing through the week after Christmas.
Also contributing to the strength of the third quarter is the high volume of
fall shipments to wholesale customers which are generally more profitable than
spring shipments. The slower spring selling season at wholesale combines with
retail seasonality to make the first quarter particularly weak.
LIQUIDITY AND CAPITAL RESOURCES
The seasonal nature of PVH's business typically requires the use of cash to
fund a build-up in the Company's inventory in the first half of each year.
During the third and fourth quarters, the Company's higher level of sales
tends to reduce its inventory and generate cash from operations.
-9-
<PAGE>
Net cash used by operations in the first quarter totalled $37.9 million in
1998 and $39.1 million last year. The Company's seasonal inventory build-up
was less than in the prior year due principally to a lower Bass inventory
build-up than in the prior year. Partially offsetting the cash flow inventory
improvement was a larger increase in trade receivables, due to an increase in
wholesale sales, and a larger decrease in accrued expenses, due to spending
associated with the Company's 1997 restructuring initiatives.
Capital spending in the first quarter was $3.6 million in 1998 as compared
with $3.4 million last year. The Company anticipates a significant increase
in overall capital spending levels in 1998 due principally to the anticipated
consolidation of its New York City offices into one location.
On April 22, 1998, the Company issued $150 million of 9.5% senior subordinated
notes due May 1, 2008, and used the net proceeds to retire its intermediate
term 7.75% senior notes and reduce its revolving credit debt. At the same
time, the Company re-syndicated and refinanced its revolving credit facility
with a new $325 million senior secured credit facility with a group of 12
banks. While these refinancings will increase the overall cost of the
Company's borrowings, the Company believes they should provide a secure
financial base which will allow the Company to focus its attention on the
execution of its strategic business plan. The new revolving credit facility
also includes a letter of credit facility with a sub-limit of $250 million
provided, however, that the aggregate maximum amount outstanding under both
the revolving credit facility and the letter of credit facility is $325
million. The Company believes that its borrowing capacity under these
facilities is adequate for its peak seasonal needs in the foreseeable future.
In addition, the retirement of the Company's intermediate term 7.75% senior
notes eliminates all long-term debt repayment requirements for the next 10
years.
* * *
*******************************************************************************
* *
* SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT *
* OF 1995 *
* *
* Forward-looking statements in this Form 10-Q report, including, without *
* limitation, statements relating to the Company's plans, strategies, *
* objectives, expectations and intentions, are made pursuant to the safe *
* harbor provisions of the Private Securities Litigation Reform Act of 1995. *
* Investors are cautioned that such forward-looking statements are inherently*
* subject to risks and uncertainties, many of which cannot be predicted with *
* accuracy, and some of which might not be anticipated, including, without *
* limitation, the following: (i) the Company's plans, strategies, objectives,*
* expectations and intentions are subject to change at any time at the *
* discretion of the Company; (ii) the levels of sales of the Company's *
* apparel and footwear products, both to its wholesale customers and in its *
* retail stores, and the extent of discounts and promotional pricing in which*
* the Company is required to engage; (iii) the Company's plans and results *
* of operations will be affected by the Company's ability to manage its *
* growth and inventory; and (iv) other risks and uncertainties indicated *
* from time to time in the Company's filings with the Securities and Exchange*
* Commission. *
*****************************************************************************
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<PAGE>
Part II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
3.1 Certificate of Incorporation (incorporated by reference to Exhibit
5 to the Company's Annual Report on Form 10-K for the fiscal year
ended January 29, 1977).
3.2 Amendment to Certificate of Incorporation, filed June 27, 1984
(incorporated by reference to Exhibit 3B to the Company's Annual
Report on Form 10-K for the fiscal year ended February 3, 1985).
3.3 Certificate of Designation of Series A Cumulative Participating
Preferred Stock, filed June 10, 1986 (incorporated by reference to
Exhibit A of the document filed as Exhibit 3 to the Company's
Quarterly Report as filed on Form 10-Q for the period ended May 4,
1986).
3.4 Amendment to Certificate of Incorporation, filed June 2, 1987
(incorporated by reference to Exhibit 3(c) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1988).
3.5 Amendment to Certificate of Incorporation, filed June 1, 1993
(incorporated by reference to Exhibit 3.5 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 30, 1994).
3.6 Amendment to Certificate of Incorporation, filed June 20, 1996
(incorporated by reference to Exhibit 3.1 to the Company's Report
on Form 10-Q for the period ended July 28, 1996).
3.7 By-Laws of Phillips-Van Heusen Corporation, as amended through
June 18, 1996 (incorporated by reference to Exhibit 3.2 to the
Company's Report on Form 10-Q for the period ended July 28, 1996).
4.1 Specimen of Common Stock certificate (incorporated by reference to
Exhibit 4 to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1981).
4.2 Preferred Stock Purchase Rights Agreement (the "Rights Agreement"),
dated June 10, 1986 between PVH and The Chase Manhattan Bank, N.A.
(incorporated by reference to Exhibit 3 to the Company's Quarterly
Report as filed on Form 10-Q for the period ended May 4, 1986).
4.3 Amendment to the Rights Agreement, dated March 31, 1987 between PVH
and The Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit 4(c) to the Company's Annual Report on Form 10-K for the
year ended February 2, 1987).
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<PAGE>
4.4 Supplemental Rights Agreement and Second Amendment to the Rights
Agreement, dated as of July 30, 1987, between PVH and The Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit (c)(4)
to the Company's Schedule 13E-4, Issuer Tender Offer Statement,
dated July 31, 1987).
4.5 Notice of extension of the Rights Agreement, dated June 5, 1996,
from Phillips-Van Heusen Corporation to The Bank of New York
(incorporated by reference to Exhibit 4.13 to the Company's report
on Form 10-Q for the period ended April 28, 1996).
4.6 Credit Agreement, dated as of April 22, 1998, among PVH, the group
of lenders party hereto, The Chase Manhattan Bank, as
Administrative Agent and Collateral Agent, and Citicorp USA, Inc.,
as Documentation Agent.
4.7 Indenture, dated as of April 22, 1998, with PVH as issuer and Union
Bank of California, N.A., as Trustee.
4.8 Indenture, dated as of November 1, 1993, between PVH and The Bank
of New York, as Trustee (incorporated by reference to Exhibit 4.01
to the Company's Registration Statement on Form S-3 (Reg. No. 33-
50751) filed on October 26, 1993).
*10.1 1987 Stock Option Plan, including all amendments through April 29,
1997 (incorporated by reference to Exhibit 10.1 to the Company's
report on Form 10-Q for the period ended May 4, 1997).
*10.2 1973 Employees' Stock Option Plan (incorporated by reference to
Exhibit 1 to the Company's Registration Statement on Form S-8 (Reg.
No. 2-72959) filed on July 15, 1981).
*10.3 Supplement to 1973 Employees' Stock Option Plan (incorporated by
reference to the Company's Prospectus filed pursuant to Rule 424(c)
to the Registration Statement on Form S-8 (Reg. No. 2-72959) filed
on March 31, 1982).
*10.4 Amendment to 1973 Employees' Stock Option Plan, effective as of
April 29, 1997 (incorporated by reference to Exhibit 10.12 to the
Company's report on Form 10-Q for the period ended May 4, 1997).
*10.5 Phillips-Van Heusen Corporation Special Severance Benefit Plan, as
amended as of April 16, 1996 (incorporated by reference to Exhibit
10.4 to the Company's Annual Report on Form 10-K for the fiscal
year ended January 28, 1996).
*10.6 Phillips-Van Heusen Corporation Capital Accumulation Plan
(incorporated by reference to the Company's Report on Form 8-K
filed on January 16, 1987).
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<PAGE>
*10.7 Phillips-Van Heusen Corporation Amendment to Capital Accumulation
Plan (incorporated by reference to Exhibit 10(n) to the Company's
Annual Report on Form 10-K for the fiscal year ended February 2,
1987).
*10.8 Form of Agreement amending Phillips-Van Heusen Corporation Capital
Accumulation Plan with respect to individual participants
(incorporated by reference to Exhibit 10(1) to the Company's
Annual Report on Form 10-K for the fiscal year ended January 31,
1988).
*10.9 Form of Agreement amending Phillips-Van Heusen Corporation Capital
Accumulation Plan with respect to individual participants
(incorporated by reference to Exhibit 10.8 to the Company's report
on Form 10-Q for the period ending October 29, 1995).
*10.10 Agreement amending Phillips-Van Heusen Corporation Capital
Accumulation Plan with respect to Bruce J. Klatsky (incorporated by
reference to Exhibit 10.13 to the Company's report on Form 10-Q for
the period ended May 4, 1997).
*10.11 Phillips-Van Heusen Corporation Supplemental Defined Benefit Plan,
dated January 1, 1991, as amended and restated on June 2, 1992
(incorporated by reference to Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31, 1993).
*10.12 Phillips-Van Heusen Corporation Supplemental Savings Plan,
effective as of January 1, 1991 and amended and restated as of
April 29, 1997 (incorporated by reference to Exhibit 10.10 to the
Company's report on Form 10-Q for the period ended May 4, 1997).
*10.13 Non-Incentive Stock Option Agreement, dated as of December 3, 1993,
between the Company and Bruce J. Klatsky (incorporated by reference
to Exhibit 10.12 to the Company's Annual Report on Form 10-K for
the fiscal year ended January 29, 1995).
*10.14 Phillips-Van Heusen Corporation 1997 Stock Option Plan, effective
as of April 29, 1997 (incorporated by reference to Exhibit 10.14 to
the Company's report on Form 10-Q for the period ending August 3,
1997).
*10.15 Phillips-Van Heusen Corporation Senior Management Bonus Program for
fiscal year 1997 (incorporated by reference to Exhibit 10.15 to the
Company's report on Form 10-Q for the period ending November 2,
1997).
15. Acknowledgement of Independent Accountants.
27. Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter ended May 3, 1998.
No reports have been filed on Form 8-K during the quarter covered by this
report.
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<PAGE>
SIGNATURES
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.
PHILLIPS-VAN HEUSEN CORPORATION
Registrant
June 16, 1998 /s/ Emanuel Chirico
Emanuel Chirico, Controller
Vice President and
Chief Accounting Officer
-14-
<PAGE>
Exhibit 15
May 20, 1998
Stockholders and Board of Directors
Phillips-Van Heusen Corporation
We are aware of the incorporation by reference in
(i) Post-Effective Amendment No. 2 to the Registration Statement (Form
S-8, No. 2-73803), which relates to the Phillips-Van Heusen Corporation
Employee Savings and Retirement Plan,
(ii) Registration Statement (Form S-8, No. 33-50841) and Registration
Statement (Form S-8, No. 33-59602), each of which relate to the
Phillips-Van Heusen Corporation Associates Investment Plan for Residents
of the Commonwealth of Puerto Rico,
(iii) Registration Statement (Form S-8, No. 33-59101), which relates to
the Voluntary Investment Plan of Phillips-Van Heusen Corporation
(Crystal Brands Division),
(iv) Post-Effective Amendment No. 4 to Registration Statement (Form S-8,
No. 2-72959), Post Effective Amendment No. 6 to Registration Statement
(Form S-8, No. 2-64564), and Post Effective Amendment No. 13 to
Registration Statement (Form S-8, No. 2-47910), each of which relate to
the 1973 Employee's Stock Option Plan of Phillips-Van Heusen
Corporation, and
(v) Registration Statement (Form S-8, No. 33-38698), Post-Effective
Amendment No. 1 to Registration Statement (Form S-8, No. 33-24057) and
Registration Statement (Form S-8, No. 33-60793), each of which relate to
the Phillips-Van Heusen Corporation 1987 Stock Option Plan,
(vi) Registration Statement (Form S-8, No. 333-29765) which relates to
the Phillips-Van Heusen Corporation 1997 Stock Option Plan.
of our report dated May 20, 1998 relating to the unaudited condensed
consolidated interim financial statements of Phillips-Van Heusen Corporation
which are included in its Form 10-Q for the thirteen week period ended
May 3, 1998.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a
part of the registration statements or post-effective amendments prepared or
certified by accountants within the meaning of Section 7 or 11 of the
Securities Act of 1933.
ERNST & YOUNG LLP
New York, New York
-15-
CONFORMED COPY
CREDIT AGREEMENT
dated as of
April 22, 1998
among
PHILLIPS-VAN HEUSEN CORPORATION,
as Borrower,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent and Collateral Agent,
and
CITICORP USA, INC.,
as Documentation Agent
___________________________
CHASE SECURITIES INC.,
as Arranger
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . 1
SECTION 1.02. Classification of Loans and Borrowings. . . 16
SECTION 1.03. Terms Generally . . . . . . . . . . . . . . 16
SECTION 1.04. Accounting Terms; GAAP. . . . . . . . . . . 6
ARTICLE II
The Credits
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . 17
SECTION 2.02. Loans and Borrowings. . . . . . . . . . . . 17
SECTION 2.03. Requests for Borrowings . . . . . . . . . . 17
SECTION 2.04. Swingline Loans . . . . . . . . . . . . . . 18
SECTION 2.05. Letters of Credit . . . . . . . . . . . . . 19
SECTION 2.06. Funding of Borrowings . . . . . . . . . . . 23
SECTION 2.07. Interest Elections. . . . . . . . . . . . . 23
SECTION 2.08. Termination and Reduction of Commitments. . 24
SECTION 2.09. Repayment of Loans; Evidence of Debt. . . . 25
SECTION 2.10. Prepayment of Loans . . . . . . . . . . . . 25
SECTION 2.11. Fees. . . . . . . . . . . . . . . . . . . . 26
SECTION 2.12. Interest. . . . . . . . . . . . . . . . . . 27
SECTION 2.13. Alternate Rate of Interest. . . . . . . . . 27
SECTION 2.14. Increased Costs . . . . . . . . . . . . . . 28
SECTION 2.15. Break Funding Payments. . . . . . . . . . . 28
SECTION 2.16. Taxes . . . . . . . . . . . . . . . . . . . 29
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs . . . . . . . . . . . 30
SECTION 2.18. Mitigation Obligations; Replacement of Lenders 1
<PAGE>
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers. . . . . . . . . . . . 32
SECTION 3.02. Authorization; Enforceability . . . . . . . 32
SECTION 3.03. Governmental Approvals; No Conflicts. . . . 32
SECTION 3.04. Financial Condition; No Material Adverse
Change. . . . . . . . . . . . . . . . . . 32
SECTION 3.05. Properties. . . . . . . . . . . . . . . . . 33
SECTION 3.06. Litigation and Environmental Matters. . . . 33
SECTION 3.07. Compliance with Laws and Agreements . . . . 34
SECTION 3.08. Investment and Holding Company Status . . . 34
SECTION 3.09. Taxes . . . . . . . . . . . . . . . . . . . 34
SECTION 3.10. ERISA . . . . . . . . . . . . . . . . . . . 34
SECTION 3.11. Disclosure. . . . . . . . . . . . . . . . . 34
SECTION 3.12. Subsidiaries. . . . . . . . . . . . . . . . 35
SECTION 3.13. Insurance . . . . . . . . . . . . . . . . . 35
SECTION 3.14. Labor Matters . . . . . . . . . . . . . . . 35
SECTION 3.15. Solvency. . . . . . . . . . . . . . . . . . 35
SECTION 3.16. Security Documents. . . . . . . . . . . . . 35
SECTION 3.17. Federal Reserve Regulations . . . . . . . . 36
SECTION 3.18. Senior Indebtedness . . . . . . . . . . . . 36
SECTION 3.19. Year 2000 . . . . . . . . . . . . . . . . . 36
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. . . . . . . . . . . . . . . 36
SECTION 4.02. Each Credit Event . . . . . . . . . . . . . 39
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information. 40
SECTION 5.02. Notices of Material Events. . . . . . . . . 41
SECTION 5.03. Information Regarding Collateral. . . . . . 41
SECTION 5.04. Existence; Conduct of Business. . . . . . . 42
SECTION 5.05. Payment of Obligations. . . . . . . . . . . 42
SECTION 5.06. Maintenance of Properties . . . . . . . . . 42
<PAGE>
SECTION 5.07. Insurance . . . . . . . . . . . . . . . . . 42
SECTION 5.08. Books and Records, Inspection and Audit
Rights. . . . . . . . . . . . . . . . . . 42
SECTION 5.09. Compliance with Laws. . . . . . . . . . . . 42
SECTION 5.10. Use of Proceeds and Letters of Credit . . . 42
SECTION 5.11. Additional Subsidiaries . . . . . . . . . . 43
SECTION 5.12. Further Assurances. . . . . . . . . . . . . 43
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities . . 44
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . 45
SECTION 6.03. Fundamental Changes . . . . . . . . . . . . 45
SECTION 6.04. Investments, Loans, Advances, Guarantees
and Acquisitions. . . . . . . . . . . . . 46
SECTION 6.05. Asset Sales . . . . . . . . . . . . . . . . 47
SECTION 6.06. Sale and Lease-Back Transactions. . . . . . 47
SECTION 6.07. Hedging Agreements. . . . . . . . . . . . . 48
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. . . . . . . . . . . . . . . 48
SECTION 6.09. Transactions with Affiliates. . . . . . . . 48
SECTION 6.10. Restrictive Agreements. . . . . . . . . . . 49
SECTION 6.11. Amendment of Material Documents . . . . . . 49
SECTION 6.12. Capital Expenditures. . . . . . . . . . . . 49
SECTION 6.13. Leverage Ratio. . . . . . . . . . . . . . . 49
SECTION 6.14. Consolidated Net Interest Expense
Coverage Ratio . . . . . . . . . . . . . 50
SECTION 6.15. Current Asset Coverage Ratio. . . . . . . . 50
SECTION 6.16. Fiscal Year . . . . . . . . . . . . . . . . 50
SECTION 6.17 Subsidiaries. . . . . . . . . . . . . . . . 50
ARTICLE VII
Events of Default. . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII
The Administrative Agent and the Collateral Agent. . . . . . 52
<PAGE>
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . 54
SECTION 9.02. Waivers; Amendments . . . . . . . . . . . . 54
SECTION 9.03. Expenses; Indemnity; Damage Waiver. . . . . 55
SECTION 9.04. Successors and Assigns. . . . . . . . . . . 56
SECTION 9.05. Survival. . . . . . . . . . . . . . . . . . 58
SECTION 9.06. Counterparts; Integration; Effectiveness. . 58
SECTION 9.07. Severability. . . . . . . . . . . . . . . . 59
SECTION 9.08. Right of Set-off. . . . . . . . . . . . . . 59
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process. . . . . . . . . . . . 59
SECTION 9.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . 60
SECTION 9.11. Headings. . . . . . . . . . . . . . . . . . 60
SECTION 9.12. Confidentiality . . . . . . . . . . . . . . 60
SECTION 9.13. Interest Rate Limitation. . . . . . . . . . 60
ECTION 9.14. Release of Collateral . . . . . . . . . . . 61
SCHEDULES:
Schedule 1.01(a) -- Mortgaged Properties
Schedule 1.01(b) -- Existing Letters of Credit
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.16(d) -- Mortgage Filing Offices
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Borrower's Counsel
Exhibit C -- Form of Opinion of Local Counsel
Exhibit D -- Form of Guarantee Agreement
Exhibit E -- Form of Indemnity, Subrogation and
Contribution Agreement
<PAGE>
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Mortgage
Exhibit I -- Form of Issuing Bank Report
<PAGE>
CREDIT AGREEMENT dated as of April 22,
1998, among PHILLIPS-VAN HEUSEN CORPORATION, a
Delaware corporation, the LENDERS party hereto,
THE CHASE MANHATTAN BANK, as Administrative
Agent and Collateral Agent, and CITICORP USA,
INC., as Documentation Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms have the meanings specified below:
"ABR", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan
Bank, in its capacity as administrative agent for the Lenders
hereunder.
"Administrative Questionnaire" means an
Administrative Questionnaire in a form supplied by the
Administrative Agent.
"Affiliate" means, with respect to a specified
Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate
per annum equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of
such change in the Prime Rate, the Base CD Rate or the Federal
Funds Effective Rate, respectively.
<PAGE>
"Applicable Percentage" means, with respect to any
Lender, the percentage of the total Commitments represented by
such Lender's Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon
the Commitments most recently in effect, giving effect to any
assignments.
"Applicable Rate" means, subject to the second
paragraph of this definition, for any day with respect to any ABR
Loan or Eurodollar Loan or with respect to the commitment fees
payable hereunder, as applicable, the applicable rate per annum
set forth below under the caption "ABR Spread", "Eurodollar
Spread" or "Commitment Fee Rate", as applicable, based upon (a)
the Consolidated Net Interest Expense Coverage Ratio for the
period of four consecutive fiscal quarters of the Borrower most
recently ended as of such day and (b) the Ratings as of such day:
Consolidated
Net Interest S&P/Moody's ABR Eurodollar Commitment
Category Expense Ratings Spread Spread Fee Rate
Coverage
Ratio
1 Less than Lower than 1.00% 2.00% 0.05%
2.00 to 1.00 BB- or Ba3
2 Equal to or Equal to or 0.05% 1.50% 0.40%
greater than better than
2.00 to 1.00 BB- or Ba3
but less than but lower than
3.00 to 1.00 BB or Ba2
3 Equal to or Equal to or 0.25% 1.25% 0.35%
greater than better than BB
3.00 to 1.00 or Ba2 but
but less than lower than
3.75 to 1.00 BB+ or Ba1
4 Equal to or Equal to or 0.00% 1.00% 0.30%
greater than better than
3.75 to 1.00 BB+ or Ba1
but less than but lower than
4.75 to 1.00 BBB- or Baa3
5 Equal to or Equal to or 0.00% 0.75% 0.25%
greater than better than
4.75 to 1.00 BBB- or Baa3
2
<PAGE>
Notwithstanding anything to the contrary set forth above, until
the delivery to the Administrative Agent, pursuant to Section
5.01(b), of the Borrower's consolidated financial statements for
the Borrower's first full fiscal quarter ending after the
Effective Date, the "Applicable Rate" shall be the applicable rate
per annum set forth in Category 3.
For purposes of the foregoing, (a) the Applicable
Rate shall be determined at any time by reference to the more
favorable to the Borrower of (i) the Ratings at such time and
(ii) the Consolidated Net Interest Expense Coverage Ratio in
effect at such time, (b) the Consolidated Net Interest Expense
Coverage Ratio as described above shall be determined as of the
end of each fiscal quarter of the Borrower's fiscal year based
upon the Borrower's consolidated financial statements delivered
pursuant to Section 5.01(a) or (b), (c) each change in the
Applicable Rate resulting from a change in the Consolidated Net
Interest Expense Coverage Ratio shall be effective during the
period commencing on and including the third day (such day, the
"Applicable Rate Determination Date") after the date of delivery
to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date
immediately preceding the effective date of the next such change,
provided that the Consolidated Net Interest Expense Coverage Ratio
shall be deemed to be in Category 1 (i) at any time that an Event
of Default has occurred and is continuing or (ii) at the option of
the Administrative Agent or the Required Lenders, if the Borrower
fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 5.01(a) or (b), during the
period from the expiration of the time for delivery thereof until
such consolidated financial statements are delivered, (d) if the
Ratings established by Moody's and S&P shall fall within different
Categories, the Applicable Rate shall be based on the higher of
the two Ratings unless one of the two Ratings is two or more
Categories lower than the other, in which case the Applicable Rate
shall be determined by reference to the Category next above that
of the lower of the two Ratings, (e) if any Rating established by
Moody's or S&P shall be changed (other than as a result of a
change in the rating system of either Moody's or S&P), such change
shall be effect as of the date on which such change is first
announced publicly by the rating agency making such change, (f) if
the rating system of either Moody's or S&P shall change, the
Borrower and the Lenders shall negotiate in good faith to amend
the references to specific ratings in this definition to reflect
such changed rating system and (g) if either Moody's or S&P shall
cease to be in the business of rating corporate debt obligations,
the Borrower and the Lenders shall negotiate in good faith to
agree upon a substitute rating agency and to amend the references
to specific ratings in this definition to reflect the ratings used
by such substitute rating agency and, pending such agreement, the
Applicable Rate shall be determined on the basis of the Ratings
provided by the other rating agency and the Consolidated Net
Interest Expense Coverage Ratio.
"Applicable Rate Determination Date" has the
meaning assigned to such term in the definition of the term
"Applicable Rate".
3
<PAGE>
"Assessment Rate" means, for any day, the annual
assessment rate in effect on such day that is payable by a member
of the Bank Insurance Fund classified as "well-capitalized" and
within supervisory subgroup "B" (or a comparable successor risk
classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars
at the offices of such member in the United States, provided that
if, as a result of any change in any law, rule or regulation, it
is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as
shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A
or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month
Secondary CD Rate multiplied by the Statutory Reserve Rate plus
(b) the Assessment Rate.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrower" means Phillips-Van Heusen Corporation, a
Delaware corporation.
"Borrowing" means (a) Revolving Loans of the same
Class and Type made, converted or continued on the same date and,
in the case of Eurodollar Loans, having a common Interest Period,
or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower
for a Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a
Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to remain closed,
provided that, when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are
not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" means, for any period, (a)
the additions to property, plant and equipment and other capital
expenditures of the Borrower and its consolidated Subsidiaries
that are (or would be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance
4
<PAGE>
with GAAP and (b) Capital Lease Obligations incurred by the
Borrower and its consolidated Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et
seq.
"Change in Control" means (a) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as
currently in effect) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly
or indirectly, of more than 30% of the total ordinary voting power
of the capital stock of the Borrower, (b) occupation of a majority
of the seats on the Board of Directors of the Borrower by Persons
who were neither (i) nominated by the Board of Directors of the
Borrower nor (ii) appointed by directors so nominated, (c) the
occurrence of any change in control or similar event (however
denominated) with respect to the Borrower under and as defined in
the Subordinated Debt Documents or any other indenture or
agreement in respect of Material Indebtedness to which the
Borrower or a Subsidiary is a party or (d) the acquisition of
direct or indirect Control of the Borrower by any Person or group.
"Change in Law" means (a) the adoption of any law,
rule or regulation after the date of this Agreement, (b) any
change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date
of this Agreement or (c) compliance by any Lender or any Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office
of such Lender or by such Lender's or such Issuing Bank's holding
company, if any) with any request, guideline or directive (whether
or not having the force of law) of any Governmental Authority made
or issued after the date of this Agreement.
"Class", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are Revolving Loans or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
5
<PAGE>
"Collateral" means any and all "Collateral", as
such term is defined in any applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as
such term is defined in the Security Agreement.
"Commitment" means, with respect to each Lender,
the aggregate commitment of such Lender to make Revolving Loans
and to acquire participations in Letters of Credit and Swingline
Loans hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.08 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant
to Section 9.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment,
as applicable. The initial aggregate amount of the Lenders'
Commitments is $325,000,000.
"Consolidated EBITDA" means, for any
four-fiscal-quarter period, Consolidated Net Income for such
period, plus, without duplication and to the extent deducted from
revenues in determining Consolidated Net Income for such period,
the sum of (a) the aggregate amount of Consolidated Net Interest
Expense for such period, (b) the aggregate amount of income tax
expense for such period, (c) all amounts attributable to
depreciation and amortization for such period, (d) a one-time,
non-recurring restructuring charge of $132,700,000 taken in 1997,
(e) one-time, non-recurring charges not to exceed $8,500,000,
$8,000,000 and $3,500,000 taken or to be taken in fiscal years
1998, 1999 and 2000, respectively, in connection with the
Borrower's "Year 2000 Project" (as such term is defined in the
confidential offering memorandum prepared in connection with the
private placement of the Subordinated Debt) and (f) premiums not
to exceed $1,100,000 paid in connection with the redemption by the
Borrower of its 7.85% Series A Senior Notes Due 2002, 7.02% Series
B Senior Notes Due 1999 and 7.75% Series C Senior Notes Due 2002,
all as determined on a consolidated basis with respect to the
Borrower and the Subsidiaries in accordance with GAAP.
"Consolidated Net Interest Expense" means, for any
four-fiscal-quarter period, (a) the sum of (i) interest expense
(net of interest income), both expensed and capitalized (including
the interest component in respect of Capital Lease Obligations),
accrued or paid by the Borrower and the Subsidiaries during such
period and (ii) the aggregate amount of letter of credit fees paid
during such period, minus (b) all amounts attributable to the
amortization of financing fees related to the Transactions for
such period, all determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Interest Expense Coverage Ratio"
means, with respect to any period, the ratio of (a) Consolidated
6
<PAGE>
EBITDA for such period to (b) Consolidated Net Interest Expense
for such period, all determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period,
net income or loss of the Borrower and the Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP,
provided that there shall be excluded from such net income or loss
(a) the income of any Person in which any other Person (other than
the Borrower or any of the Subsidiaries or any director holding
qualifying shares in compliance with applicable law) has a joint
interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of the
Subsidiaries by such Person during such period and (b) the income
(or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or
any of the Subsidiaries or the date that Person's assets are
acquired by the Borrower or any of the Subsidiaries.
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. The terms
"Controlling" and "Controlled" have meanings correlative thereto.
"Current Asset Coverage Ratio" means, for the
Borrower and the Subsidiaries on a consolidated basis at any date,
the ratio of, without duplication, (a) the sum of the aggregate
amount of (i) inventory and trade accounts receivable (as such
amounts appear on the balance sheet of the Borrower most recently
delivered to the Administrative Agent and each Lender pursuant to
Section 5.01) (less the amount of applicable reserves determined
in accordance with GAAP) and (ii) the Trade Letters of Credit
outstanding to (b) the sum of the aggregate amount of (i) the
Debentures outstanding (as such amount appears on the balance
sheet of the Borrower most recently delivered to the
Administrative Agent and each Lender pursuant to Section 5.01) and
(ii) the Loans, the Trade Letters of Credit and any unreimbursed
LC Disbursements outstanding hereunder on such date.
"Debentures" means the 7-3/4% Debentures Due 2023
of the Borrower issued under the Debentures Indenture.
"Debentures Indenture" means the Indenture dated as
of November 1, 1993, by and between the Borrower and The Bank of
New York, as Trustee, governing the Debentures.
"Debentures Trustee" means The Bank of New York, as
Trustee under the Debentures Indenture, and its successors in such
capacity.
7
<PAGE>
"Default" means any event or condition that
constitutes an Event of Default or that upon notice, lapse of time
or both would, unless cured or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and
proceedings and the environmental matters disclosed in Schedule
3.06.
"dollars" or "$" refers to lawful money of the
United States of America.
"Effective Date" means the date on which the
conditions specified in Section 4.01 are satisfied (or waived in
accordance with Section 9.02).
"Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or
entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural
resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and
safety matters.
"Environmental Liability" means any liability,
contingent or otherwise (including any liability for damages,
natural resource damage, costs of environmental remediation,
administrative oversight costs, fines, penalties or indemnities),
of the Borrower or any Subsidiary directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) that, together with the Borrower, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414
of the Code.
"ERISA Event" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which
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the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan;
(d) the incurrence by the Borrower or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or
to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer
Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of
ERISA.
"Eurodollar", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such
term in Article VII.
"Excluded Taxes" means, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other
recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction (or any political
subdivision thereof or taxing authority therein) under the laws of
which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any
other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.18(b)), any withholding
tax that (i) is in effect and would apply to amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office),
except to the extent that such Foreign Lender (or its assignor, if
any) would have been entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from
the Borrower with respect to any withholding tax pursuant to
Section 2.16(a) or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Existing Credit Agreement" means the Credit
Agreement dated as of December 16, 1993, as amended, among the
Borrower, the financial institutions named therein and Bankers
Trust Company, as agent.
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"Existing Issuing Bank" means each Lender that is
listed on Schedule 1.01(b) as an issuer of an Existing Letter of
Credit, in each case for so long as any Existing Letter of Credit
issued by such Existing Issuing Bank shall remain outstanding.
"Existing Letter of Credit" means any letter of
credit that (a) was issued under the Existing Credit Agreement by
an Existing Issuing Bank, (b) is outstanding on the Effective Date
and (c) is listed in Schedule 1.01(b).
"Federal Funds Effective Rate" means, for any day,
the weighted average (rounded upwards, if necessary, to the next
1/100 of 1%) of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations
for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means the chief financial
officer, principal accounting officer, treasurer or controller of
the Borrower.
"Foreign Lender" means any Lender that is organized
under the laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is
organized under the laws of a jurisdiction other than the United
States of America or any State thereof or the District of
Columbia.
"GAAP" means generally accepted accounting
principles in the United States of America.
"Governmental Authority" means the government of
the United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor")
means, without duplication, any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether
10
<PAGE>
directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of
the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation, provided that the term
"Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee
Agreement, substantially in the form of Exhibit D, made by the
Subsidiary Loan Parties in favor of the Collateral Agent for the
benefit of the Secured Parties.
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated
pursuant to any Environmental Law, including any material listed
as a hazardous substance under Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate
protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds
(other than bonds of the type referred to in clause (d) of the
definition of the term "Permitted Encumbrance"), debentures, notes
or similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such
Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the
ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Lien on property owned or acquired by such Person, whether or not
the Indebtedness secured thereby has been assumed, (f) all
Guarantees by such Person of Indebtedness of others, (g) all
Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all
obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any
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<PAGE>
partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded
Taxes.
"Indemnity, Subrogation and Contribution
Agreement" means the Indemnity, Subrogation and Contribution
Agreement, substantially in the form of Exhibit E, among the
Borrower, the Subsidiary Loan Parties and the Administrative
Agent.
"Information Memorandum" means the Confidential
Information Memorandum dated March 1998 relating to the Borrower
and the Transactions.
"Interest Election Request" means a request by the
Borrower to convert or continue a Revolving Borrowing in
accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to
any ABR Loan (other than a Swingline Loan), the last day of each
January, April, July and October, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to
the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three
months' duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months' duration after
the first day of such Interest Period and (c) with respect to any
Swingline Loan, the day that such Loan is required to be repaid.
"Interest Period" means, with respect to any
Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter,
as the Borrower may elect, provided that (a) if any Interest
Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on
the next preceding Business Day and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.
For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be
the effective date of the most recent conversion or continuation
of such Borrowing.
"Issuing Bank" means (a) any Existing Issuing Bank,
(b) the Primary Issuing Bank and (c) any other Lender designated
by the Borrower from time to time with the consent of the
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Administrative Agent (which consent shall not be unreasonably
withheld) and such Lender, provided that the total number of
Issuing Banks at any time under this Agreement shall not exceed
five. Each Issuing Bank may, with the consent of the Borrower
(which consent shall not be unreasonably withheld), arrange for
one or more Letters of Credit to be issued by Affiliates of such
Issuing Bank, in which case the term "Issuing Bank" shall include
any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"LC Availability Period" means the period from and
including the Effective Date to but excluding the earlier of (a)
the date that is five Business Days prior to the Maturity Date and
(b) the date of termination of the Commitments.
"LC Disbursement" means a payment made by any
Issuing Bank pursuant to a Letter of Credit issued by such Issuing
Bank.
"LC Exposure" means, at any time, the sum of (a)
the aggregate undrawn amount of all outstanding Letters of Credit
at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower
at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01
and any other Person that shall have become a party hereto
pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit
(whether a Stand-by Letter of Credit or a Trade Letter of Credit)
issued or deemed to have been issued pursuant to this Agreement,
including each Existing Letter of Credit.
"Leverage Ratio" means, with respect to any period,
the ratio of (a) Total Debt as of the last day of such period to
(b) Consolidated EBITDA for such period, all determined on a
consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750
of the Telerate Service (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided
on such page of such Service, as determined by the Administrative
Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period,
as the rate for dollar deposits with a maturity comparable to such
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Interest Period. In the event that such rate is not available at
such time for any reason, then the "LIBO Rate" with respect to
such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as
any of the foregoing) relating to such asset and (c) in the case
of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" means this Agreement, the Letters
of Credit, the Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement and the Security Documents.
"Loan Parties" means the Borrower and the
Subsidiary Loan Parties.
"Loans" means the loans made by the Lenders to the
Borrower pursuant to this Agreement.
"Margin Stock" has the meaning assigned to such
term in Regulation U.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, operations, properties,
condition (financial or otherwise), contingent liabilities or
material agreements of the Borrower and the Subsidiaries taken as
a whole, (b) the ability of any Loan Party to perform its
obligations under any Loan Document or (c) the rights of or
benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other
than the Loans and Letters of Credit), or obligations in respect
of one or more Hedging Agreements, of any one or more of the
Borrower and the Subsidiaries in an outstanding aggregate
principal amount exceeding $5,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the
obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower
or such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.
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"Maturity Date" means April 22, 2003.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust,
assignment of leases and rents, leasehold mortgage or other
security document granting a Lien on any Mortgaged Property to
secure the Obligations. Each Mortgage shall be satisfactory in
form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel
of real property and the improvements thereto owned by a Loan
Party and identified on Schedule 1.01(a), and includes each other
parcel of real property and improvements thereto with respect to
which a Mortgage is granted pursuant to Section 5.11 or 5.12.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Note Purchase Agreements" means the Note Purchase
Agreements, dated as of October 1, 1992, as amended, originally
between the Borrower and each of the following purchasers: The
Equitable Life Assurance Society of the United States, Equitable
Variable Life Insurance Company, UNUM Life Insurance Company of
America, Nationwide Life Insurance Company, Employers Life
Insurance Company of Wausau and Lutheran Brotherhood.
"Obligations" has the meaning assigned to such term
in the Security Agreement.
"Other Taxes" means any and all current or future
recording, stamp, documentary, excise, transfer, sales, property
or similar taxes, charges or levies arising from any payment made
under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor
entity performing similar functions.
"Perfection Certificate" means a certificate in the
form of Annex 1 to the Security Agreement or any other form
approved by the Collateral Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section
5.04;
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(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed
by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than
30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary
course of business in compliance with workers'
compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety
and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment liens in respect of judgments that do
not constitute an Event of Default under clause (k) of
Article VII;
(f) easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by
law, granted or arising in the ordinary course of
business that do not secure any monetary obligations and
do not materially detract from the value of the affected
property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
(g) any interest of a landlord in or to property of
the tenant imposed by law, arising in the ordinary
course of business and securing lease obligations that
are not overdue by more than 60 days or are being
contested in compliance with Section 5.05, or any
possessory rights of a lessee to the leased property
under the provisions of any lease permitted by the terms
of this Agreement; and
(h) Liens of a collection bank arising in the
ordinary course of business under Sec. 4-208 of the
Uniform
Commercial Code in effect in the relevant jurisdiction,
provided that the term "Permitted Encumbrances" shall not include
any Lien securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of
America), in each case maturing within one year from the
date of acquisition thereof;
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(b) investments in commercial paper maturing within
270 days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit,
banker's acceptances and time deposits maturing within
180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the
United States of America or any State thereof that has a
combined capital and surplus and undivided profits of
not less than $500,000,000;
(d) fully collateralized repurchase agreements with
a term of not more than 30 days for securities described
in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause
(c) above; and
(e) shares of funds registered under the Investment
Company Act of 1940, as amended, that have assets of at
least $500,000,000 and invest only in obligations
described in clauses (a) through (d) above to the extent
that such shares are rated by Moody's or S&P in one of
the two highest rating categories assigned by such
agency for shares of such nature.
"Person" means any natural person, corporation,
limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement,
substantially in the form of Exhibit F, among the Borrower, the
Subsidiaries party thereto and the Collateral Agent for the
benefit of the Secured Parties.
"Primary Issuing Bank" means (a) The Chase
Manhattan Bank, in its capacity as issuer of Letters of Credit
hereunder, and (b) any Lender or Lenders becoming its successor or
successors in such capacity as provided in Section 2.05(i).
"Prime Rate" means the rate of interest per annum
publicly announced from time to time by The Chase Manhattan Bank
as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being
effective.
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"Pyramid Partners" means Pyramid Partners AB, a
Swedish corporation.
"Ratings" means the rating by each of S&P and
Moody's applicable to the Borrower's senior, unsecured,
non-credit-enhanced long-term debt for borrowed money (or, in the
absence of such rated debt, the corporate credit ratings
established by S&P and Moody's for the Borrower).
"Register" has the meaning set forth in Section
9.04.
"Regulation T" means Regulation T of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as
from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Related Parties" means, with respect to any
specified Person, such Person's Affiliates and the respective
directors, officers, employees, agents and advisors of such Person
and such Person's Affiliates.
"Release" has the meaning set forth in Section
101(22) of CERCLA.
"Required Lenders" means, at any time, Lenders
having Revolving Exposures and unused Commitments representing
more than 50% of the sum of the total Revolving Exposures and
unused Commitments at such time.
"Restricted Payment" means any dividend or other
distribution (whether in cash, securities or other property) with
respect to any shares of any class of capital stock of the
Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any such
shares of capital stock of the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such shares of
capital stock of the Borrower or any Subsidiary.
"Revolving Availability Period" means the period
from and including the Effective Date to but excluding the earlier
of the Maturity Date and the date of termination of the
Commitments.
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"Revolving Exposure" means, with respect to any
Lender at any time, the sum of the outstanding principal amount of
such Lender's Revolving Loans and its LC Exposure and Swingline
Exposure at such time.
"Revolving Loan" means a loan made pursuant to
Section 2.01.
"S&P" means Standard & Poor's Ratings Service.
"Secured Parties" has the meaning assigned to such
term in the Security Agreement.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit G, among the Borrower, the
Subsidiary Loan Parties and the Collateral Agent for the benefit
of the Secured Parties.
"Security Documents" means the Security Agreement,
the Pledge Agreement, the Mortgages and each other security
agreement, mortgage or other instrument or document executed and
delivered pursuant to Section 5.11 or 5.12 to secure any of the
Obligations.
"Senior Notes" means the 7.85% Series A Senior
Notes Due 2002 of the Borrower, the 7.02% Series B Senior Notes
Due 1999 of the Borrower and the 7.75% Series C Senior Notes Due
2002 of the Borrower issued pursuant to the Note Purchase
Agreements.
"Stand-by LC Disbursement" means a payment made by
any Issuing Bank pursuant to a Stand-by Letter of Credit issued by
such Issuing Bank.
"Stand-by LC Exposure" means, at any time, the sum
of (a) the aggregate undrawn amount of all outstanding Stand-by
Letters of Credit at such time plus (b) the aggregate amount of
all Stand-by LC Disbursements that have not yet been reimbursed by
or on behalf of the Borrower at such time.
"Stand-by Letter of Credit" means a Letter of
Credit other than a Trade Letter of Credit.
"Statutory Reserve Rate" means a fraction
(expressed as a decimal), the numerator of which is the number one
and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a
decimal established by the Board to which the Administrative Agent
is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000
with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding
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(currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time
to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Debt" means (a) the unsecured
subordinated notes to be issued by the Borrower on or prior to the
Effective Date in the aggregate principal amount of $150,000,000
and (b) the Indebtedness represented thereby.
"Subordinated Debt Documents" means the indenture
under which the Subordinated Debt is issued and all other
instruments, agreements and other documents evidencing or
governing the Subordinated Debt or providing for any Guarantee or
other right in respect thereof.
"subsidiary" means, with respect to any Person (the
"parent") at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which
would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as
any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests
are, as of such date, owned, controlled or held, or (b) that is,
as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower,
provided that the term "Subsidiary" shall not include (a) Pyramid
Partners prior to such time as the Borrower shall own, directly or
indirectly, more than 50% of the share capital of Pyramid Partners
and (b) Productos Textilos S.A., a Honduras joint venture.
"Subsidiary Loan Party" means any Subsidiary that
is not a Foreign Subsidiary.
"Swingline Exposure" means, at any time, the
aggregate principal amount of all Swingline Loans outstanding at
such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Percentage of the total Swingline Exposure at
such time.
"Swingline Lender" means The Chase Manhattan Bank,
in its capacity as lender of Swingline Loans hereunder.
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"Swingline Loan" means a loan made pursuant to
Section 2.04.
"Taxes" means any and all current or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.
"Three-Month Secondary CD Rate" means, for any day,
the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day is not a
Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day)
or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00
a.m., New York City time, on such day (or, if such day is not a
Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Debt" means, as of any date of
determination, without duplication, (a) the aggregate principal
amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, determined on a consolidated basis in
accordance with GAAP (other than (i) Indebtedness of the type
referred to in clause (h) of the definition of the term
"Indebtedness", except to the extent of any unreimbursed drawings
thereunder, and (ii) the aggregate principal amount of Revolving
Loans and Swingline Loans outstanding as of such date), plus (b)
the average principal amount of Revolving Loans and Swingline
Loans outstanding as of the last day of each fiscal month of the
Borrower during the 12-fiscal-month period immediately preceding
or ending on such date, provided that for purposes of calculating
the amounts determined pursuant to this clause (b) as of the last
day of each of the fiscal quarters of the Borrower ending July
1998, October 1998 and January 1999, the principal amount of
Revolving Loans and Swingline Loans outstanding as of the end of
August 1997, September 1997, October 1997, November 1997, December
1997, January 1998, February 1998, March 1998 and April 1998 shall
be deemed to be $67,200,000, $83,200,000, $85,200,000,
$68,400,000, $400,000, $7,900,000, $66,300,000, $60,400,000 and
$74,400,000, respectively.
"Trade Letter of Credit" means any Letter of Credit
that (a) is issued in support of trade obligations incurred in the
ordinary course of business and (b) includes, as a condition to
drawing thereunder, the presentation to the applicable Issuing
Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of such Issuing Bank, to create a
valid and perfected security interest in the goods covered
thereby.
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"Transactions" means the execution, delivery and
performance by each Loan Party of the Loan Documents to which it
is to be a party, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder and the
issuance of the Subordinated Debt and the use of the proceeds
thereof.
"Type", when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or
on the Loans comprising such Borrowing, is determined by reference
to the Adjusted LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan, as such terms are defined in Part I
of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and
Borrowings. For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a "Revolving Loan") or
by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
"Eurodollar Revolving Loan"). Borrowings also may be classified
and referred to by Class (e.g., a "Revolving Borrowing") or by
Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g.,
a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of
terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set
forth herein), (b) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (c) the
words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as
otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in
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effect from time to time, provided that, if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required
Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms
and conditions set forth herein, each Lender agrees to make
Revolving Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount
that will not result in such Lender's Revolving Exposure exceeding
such Lender's Commitment. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each
Loan (other than a Swingline Loan) shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders
ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it
shall not relieve any other Lender of its obligations hereunder,
provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make
Loans as required.
(b) Subject to Section 2.13, each Revolving
Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Borrower may request in accordance herewith.
Notwithstanding anything to the contrary contained herein, all
Borrowings made on the Effective Date shall be ABR Borrowings.
Each Swingline Loan shall be an ABR Loan. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan,
provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
(c) At the commencement of each Interest Period
for any Eurodollar Borrowing, such Borrowing shall be in an
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aggregate amount that is an integral multiple of $100,000 and not
less than $5,000,000. At the time that each ABR Revolving
Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $100,000 and not less than
$1,000,000 provided that an ABR Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the
total Commitments or that is required to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.05(e). Each
Swingline Loan shall be in an amount that is an integral multiple
of $100,000 and not less than $200,000, provided that a Swingline
Loan may be in an aggregate amount that is, subject to Section
2.04(a) and Section 2.05(b), equal to the entire unused balance of
the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Borrowings of more than one Type and Class may be
outstanding at the same time, provided that there shall not at any
time be more than a total of 10 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to
elect to convert or continue, any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To
request a Revolving Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case
of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date
of the proposed Borrowing, provided that any such notice of an ABR
Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e) may be given not
later than 12:00 noon, New York City time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing
Request in a form approved by the Administrative Agent and signed
by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) subject to the second sentence of Section
2.02(b), whether such Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the
initial Interest Period to be applicable thereto, which
shall be a period contemplated by the definition of the
term "Interest Period"; and
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(v) the location and number of the Borrower's
account to which funds are to be disbursed, which shall
comply with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurodollar
Revolving Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender's Loan to be made
as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to
the terms and conditions set forth herein, the Swingline Lender
agrees to make Swingline Loans to the Borrower from time to time
during the Revolving Availability Period, in an aggregate
principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans
exceeding $10,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the total Commitments, provided that the
Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower
shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 2:00 p.m., New York City
time, on the day of a proposed Swingline Loan. Each such notice
shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and amount of the requested Swingline
Loan. The Administrative Agent will promptly advise the Swingline
Lender of any such notice received from the Borrower. The
Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of
the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the
applicable Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice
given to the Administrative Agent not later than 2:00 p.m., New
York City time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the
Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the
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Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees that
its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in
the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender
the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender
from the Borrower (or other party on behalf of the Borrower) in
respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by
the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender,
as their interests may appear. The purchase of participations in
a Swingline Loan pursuant to this paragraph shall not relieve the
Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General.
Subject to and upon the terms and conditions set forth herein, (i)
each of the Existing Letters of Credit shall, upon the initial
funding of Loans on the Effective Date and without any further
action on the part of the applicable Issuing Bank or any other
Person, be deemed for all purposes to have been issued by such
Issuing Bank on the Effective Date as a Letter of Credit
hereunder, (ii) each Issuing Bank agrees to issue, amend, renew or
extend Letters of Credit for the account of the Borrower from time
to time during the LC Availability Period, provided that (and upon
issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension
(A) the LC Exposure shall not exceed $250,000,000, (B) the
Stand-by LC Exposure shall not exceed $25,000,000 and (C) the
total Revolving Exposures shall not exceed the total Commitments
and (iii) the Borrower may request the issuance of, and each
Issuing Bank will issue, Letters of Credit for the Borrower's
account, in a form reasonably acceptable to the applicable Issuing
Bank, at any time and from time to time during the LC Availability
Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted
by the Borrower to, or entered into by the Borrower with, an
Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
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(b) Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions. To request the issuance of a Trade
Letter of Credit (or the amendment, renewal or extension of an
outstanding Trade Letter of Credit), the Borrower shall transmit
by electronic communication (or hand deliver or telecopy) to the
applicable Issuing Bank a notice requesting the issuance of a
Trade Letter of Credit, or identifying the Trade Letter of Credit
to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a
Business Day), the date on which such Trade Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section),
the amount of such Trade Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Trade Letter of
Credit. To request the issuance of a Stand-by Letter of Credit
(or the amendment, renewal or extension of an outstanding Stand-by
Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so
have been approved by the applicable Issuing Bank) to the
applicable Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Stand-by
Letter of Credit, or identifying the Stand-by Letter of Credit to
be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a
Business Day), the date on which such Stand-by Letter of Credit is
to expire (which shall comply with paragraph (c) of this Section),
the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Stand-by Letter
of Credit. With respect to any Letter of Credit, if requested by
the applicable Issuing Bank, the Borrower also shall submit a
letter of credit application on such Issuing Bank's standard form
in connection with any request for a Letter of Credit.
(c) Expiration Date. Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i)
the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one
year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
(d) Participations. By the issuance (or, in the
case of the Existing Letters of Credit, deemed issuance) of a
Letter of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) and without any further action on the part of
the applicable Issuing Bank or the Lenders, such Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the applicable Issuing
Bank, such Lender's Applicable Percentage of each LC Disbursement
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made by such Issuing Bank and not reimbursed by the Borrower on
the date due as provided in paragraph (e) of this Section, or of
any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including
any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the applicable Issuing Bank
shall make any LC Disbursement in respect of a Letter of Credit,
the Borrower shall reimburse such LC Disbursement by paying to the
applicable Issuing Bank an amount equal to such LC Disbursement
not later than the close of business on the date that such LC
Disbursement is made, if the Borrower shall have received notice
of such LC Disbursement prior to 10:00 a.m., New York City time,
on such date, or, if such notice has not been received by the
Borrower prior to 10:00 a.m., New York City time, on such date,
then not later than the close of business on (i) the Business Day
that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or
(ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received
prior to 10:00 a.m., New York City time, on the day of receipt,
provided that the Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section
2.03 or 2.04 that such LC Disbursement be reimbursed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan. If the Borrower fails to
make such payment when due, the applicable Issuing Bank shall
notify the Administrative Agent, which shall notify each Lender of
the applicable LC Disbursement, the payment then due from the
Borrower in respect thereof and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice,
each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.06 with respect to Loans made by
such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the applicable Issuing Bank the
amounts so received by it from the Lenders. Promptly following
receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the applicable Issuing Bank or,
to the extent that Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and
such Issuing Bank as their interests may appear. Any payment made
by a Lender pursuant to this paragraph to reimburse any Issuing
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Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Loan as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's
obligation to reimburse LC Disbursements as provided in paragraph
(e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with
the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any
term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein
being untrue or inaccurate in any respect, (iii) payment by the
applicable Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event
or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right
of set-off against, the Borrower's obligations hereunder. None of
the Administrative Agent, the Lenders, any Issuing Bank or any of
their Related Parties shall have any liability or responsibility
by reason of or in connection with the issuance or transfer of any
Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to
in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence
arising from causes beyond the control of such Issuing Bank,
provided that the foregoing shall not be construed to excuse the
applicable Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to
the extent permitted by applicable law) suffered by the Borrower
that are caused by such Issuing Bank's failure to exercise care
when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of the applicable
Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of
Credit, the applicable Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice
or information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict
compliance with the terms of such Letter of Credit.
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(g) Disbursement Procedures. Each Issuing Bank
shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a
Letter of Credit. The applicable Issuing Bank shall promptly
notify the Borrower by electronic communication, or by telephone
(confirmed by telecopy), of such demand for payment and whether
such Issuing Bank has made or will make an LC Disbursement
thereunder, provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If any Issuing Bank shall
make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans, provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the
account of the applicable Issuing Bank, except that interest
accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse such Issuing Bank shall
be for the account of such Lender to the extent of such payment.
(i) Replacement of the Primary Issuing Bank. The
Primary Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Administrative Agent and the
successor Primary Issuing Bank. The Administrative Agent shall
notify the Lenders of any such replacement of the Primary Issuing
Bank. At the time any such replacement shall become effective,
the Borrower shall pay all unpaid fees accrued for the account of
the replaced Primary Issuing Bank pursuant to Section 2.11(b).
From and after the effective date of any such replacement, (i) the
successor Primary Issuing Bank shall have all the rights and
obligations of the Primary Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Primary Issuing Bank" shall be
deemed to refer to such successor or to any previous Primary
Issuing Bank, or to such successor and all previous Primary
Issuing Banks, as the context shall require. After the
replacement of a Primary Issuing Bank hereunder, the replaced
Primary Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of a Primary
Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be
required to amend to increase the principal amount of, extend
beyond the expiration date or renew existing, or to issue
additional, Letters of Credit.
(j) Resignation of Issuing Banks. Any Issuing
Bank (other than the Primary Issuing Bank) may resign at any time
upon not less than 30 days' prior written notice to the Borrower
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and the Administrative Agent. At the time any such resignation
shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the resigning Issuing Bank pursuant to
Section 2.11(b). After the resignation of an Issuing Bank
hereunder, such Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by
it prior to such resignation, but shall not be required to amend
to increase the principal amount of, extend beyond the expiration
date or renew existing, or to issue additional, Letters of Credit.
(k) Cash Collateralization. If any Event of
Default shall occur and be continuing, on the Business Day that
the Borrower receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been
accelerated, Lenders with LC Exposure representing greater than
50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit
in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount
in cash equal to 100% of the LC Exposure as of such date plus any
accrued and unpaid interest thereon, provided that the obligation
to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the
occurrence of any Event of Default with respect to the Borrower
described in clause (h) or (i) of Article VII. Each such deposit
shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under
this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made, to
the extent practicable, at the written request of the Borrower at
the Borrower's risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the applicable
Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrower
for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with
LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived.
(l) Issuing Bank Reporting Requirements. Each
Issuing Bank agrees to provide to the Borrower and the
Administrative Agent (i) no later than the close of business on
the first Business Day of each week, a written notice of the
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information required by Exhibit H as of each day during the
previous week (or, at the request of the Administrative Agent, no
later than the close of business of each Business Day, a written
notice of the information required by Exhibit H as of the previous
Business Day), (ii) no later than the close of business on the
first Business Day after the end of each fiscal quarter of the
Borrower, a written notice of the information required by Exhibit
H as of any day during such fiscal quarter not previously included
in a written notice delivered pursuant to clause (i) and (iii) any
other information the Administrative Agent may reasonably request
from time to time with respect to Letters of Credit issued by such
Issuing Bank.
SECTION 2.06. Funding of Borrowings. (a) Each
Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time (or 2:00 p.m., New York
City time, in the case of any ABR Revolving Loan made to reimburse
a LC Disbursement in accordance with Section 2.05(e)), to the
account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders, provided that Swingline
Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the
Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request, provided that ABR
Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall upon the
Borrower's written request be remitted by the Administrative Agent
to the applicable Issuing Bank.
(b) Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event,
if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount
with interest thereon, for each day from and including the date
such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of the Federal Funds Effective Rate and a
rate reasonably determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation
or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each
Revolving Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar
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Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each
such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be
converted or continued.
(b) To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a
Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election
Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being
elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made
pursuant to such Interest Election Request, which shall
be a Business Day;
(iii) whether the resulting Borrowing is to be an
ABR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a
period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period of
one month's duration.
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(d) Promptly following receipt of an Interest
Election Request, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Borrowing
prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.
(f) A Borrowing may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto
the Interest Period therefor would end after the Maturity Date.
SECTION 2.08. Termination and Reduction of
Commitments. (a) Unless previously terminated, the Commitments
shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or
from time to time reduce, the Commitments, provided that (i) each
reduction of the Commitments shall be in an amount that is an
integral multiple of $5,000,000 and not less than $5,000,000 and
(ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.10, the sum of the
Revolving Exposures would exceed the total Commitments.
(c) The Borrower shall notify the Administrative
Agent of any election to terminate or reduce the Commitments under
paragraph (b) of this Section at least three Business Days prior
to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable, provided
that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such
notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the
Commitments shall be made ratably among the Lenders in accordance
with their respective Commitments.
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SECTION 2.09. Repayment of Loans, Evidence of
Debt. (a) The Borrower hereby unconditionally promises to pay (i)
to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Revolving Loan of such Lender
on the Maturity Date and (ii) to the Swingline Lender the then
unpaid principal amount of each Swingline Loan on the earlier of
the Maturity Date and the first date after such Swingline Loan is
made that is the 15th day or the Business Day that is prior to the
last day of a calendar month, provided that on each date that a
Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding.
(b) 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 made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders
and each Lender's share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall be prima
facie evidence of the existence and amounts of the obligations
recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this
Agreement.
(e) Any Lender may request that Loans made by it
be evidenced by a single promissory note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee
and its registered assigns).
SECTION 2.10. Prepayment of Loans. (a) The
Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to the
requirements of this Section.
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(b) Prior to any prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings
to be prepaid and shall specify such selection in the notice of
such prepayment pursuant to paragraph (c) of this Section.
(c) The Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of prepayment or
(iii) in the case of prepayment of a Swingline Loan, not later
than 2:00 p.m., New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid, provided that, if a notice of prepayment of
any Loan is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly
following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of
any Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in
Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.
SECTION 2.11. Fees. (a) The Borrower agrees to
pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the Applicable Rate on the
average daily unused amount of the Commitment of such Lender
during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last day of
January, April, July and October of each year and on the date on
which the Commitments terminate, commencing on the first such date
to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but
excluding the last day). For purposes of computing commitment
fees, a Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such
Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of
Credit, which shall accrue (A) in the case of standby Letters of
Credit, at the same Applicable Rate as is used to determine the
rate of interest on Eurodollar Revolving Loans and (B) in the case
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of Trade Letters of Credit, at 50% of such Applicable Rate, in
each case on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective
Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to each Issuing Bank, a fronting
fee, which shall accrue at the rate or rates per annum separately
agreed upon between the Borrower and such Issuing Bank on the
average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements)
attributable to Letters of Credit issued by such Issuing Bank, in
each case during the period from and including the Effective Date
to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC
Exposure, as well as such Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued through and including
the last day of January, April, July and October shall be payable
on the third Business Day following such last day, commencing on
the first such date to occur after the Effective Date, provided
that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any
other fees payable to an Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the
amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the
Administrative Agent (or to the applicable Issuing Bank, in the
case of fees payable to such Issuing Bank) for distribution, in
the case of commitment fees and participation fees, to the Lenders
entitled thereto. Fees paid shall not be refundable under any
circumstances.
SECTION 2.12. Interest. (a) The Loans comprising
each ABR Borrowing (including each Swingline Loan) shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing
shall bear interest at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount
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payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate (including margin) otherwise applicable
to such Loan as provided in the preceding paragraphs of this
Section or (ii) in the case of any other amount, 2% plus the rate
(including margin) applicable to ABR Revolving Loans as provided
in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable
in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments, provided that (A) interest accrued
pursuant to paragraph (c) of this Section shall be payable on
demand, (B) in the event of any repayment or prepayment of any
Loan (other than a prepayment of an ABR Revolving Loan prior to
the end of the Revolving Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the
date of such repayment or prepayment and (C) in the event of any
conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by
reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If
prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a) the Administrative Agent determines (which
determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the
Required Lenders that they have determined in good
faith that the Adjusted LIBO Rate for such Interest
Period will not adequately and fairly reflect the cost
to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter (which notice shall be confirmed in writing
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and shall include a reasonably detailed explanation of the
circumstances giving rise to such determination) and, until the
Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar
Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as
an ABR Borrowing.
SECTION 2.14. Increased Costs. (a) If any Change
in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any
Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or
the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Eurodollar Loan
(or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or such Issuing Bank of
participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such
Lender or such Issuing Bank in respect thereof (whether of
principal, interest or otherwise), then the Borrower will pay to
such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or
such Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines
that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's or
such Issuing Bank's capital or on the capital of such Lender's or
such Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by
such Issuing Bank, to a level below that which such Lender or such
Issuing Bank or such Lender's or such Issuing Bank's holding
company could have achieved but for such Change in Law (taking
into consideration such Lender's or such Issuing Bank's policies
and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), then from time to time
the Borrower will pay to such Lender or such Issuing Bank, as the
case may be, such additional amount or amounts as will compensate
such Lender or such Issuing Bank or such Lender's or such Issuing
Bank's holding company for any such reduction suffered.
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(c) A certificate of a Lender or an Issuing Bank
setting forth the amount or amounts necessary to compensate such
Lender or such Issuing Bank or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section shall
be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or such
Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or
any Issuing Bank to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender's or such Issuing
Bank's right to demand such compensation, provided that the
Borrower shall not be required to compensate a Lender or an
Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such
Lender or such Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's or such Issuing Bank's
intention to claim compensation therefor, and provided further
that if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to
above shall be extended to include the period of retroactive
effect thereof.
SECTION 2.15. Break Funding Payments. In the
event of (a) the payment of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Revolving Loan on the date
specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.10(c) and is
revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower
pursuant to Section 2.18, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if
any, of (i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan,
for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the amount
of interest that would accrue on such principal amount for such
period at the interest rate that such Lender would bid were it to
bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this
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Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by
or on account of any obligation of the Borrower hereunder or under
any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes,
provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other
Taxes to the relevant Governmental Authority in accordance with
applicable law (to the extent not otherwise paid by others
hereunder and reimbursed by the Borrower).
(c) The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Bank, within 10
days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or such Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender
or an Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Each Foreign Lender, and any Issuing Bank that
is not a "United States person" within the meaning of Section
7701(a)(30) of the Code (together with the Foreign Lenders, the
"Non-U.S. Lenders"), shall deliver to the Borrower (with a copy to
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the Administrative Agent) two copies of either United States
Internal Revenue Service Form 1001 or Form 4224, or, in the case
of a Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8, a certificate representing
that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Borrower and
is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or reduced rate of, U.S. Federal
withholding tax on payments by the Borrower under this Agreement
or any other Loan Document. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this
Agreement or designates a new lending office. In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence, expiration or invalidity of any form previously
delivered by such Non-U.S. Lender. Notwithstanding any other
provision of this Section 2.16, a Non-U.S. Lender shall not be
required to deliver any form pursuant to this Section 2.16(e) that
such Non-U.S. Lender is not legally able to deliver.
SECTION 2.17. Payments Generally; Pro Rata
Treatment; Sharing of Set-offs. (a) The Borrower shall make each
payment required to be made by it hereunder or under any other
Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under
Section 2.14, 2.15 or 2.16, or otherwise) prior to 12:00 noon (or,
in the case of any reimbursement of LC Disbursements only, prior
to the close of business), New York City time, on the date when
due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date
may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall
be made to the Administrative Agent at its offices at 270 Park
Avenue, New York, New York, except payments to be made directly to
an Issuing Bank or the Swingline Lender as expressly provided
herein and except that payments pursuant to Sections 2.14, 2.15,
2.16 and 9.03 shall be made directly to the Persons entitled
thereto and payments pursuant to other Loan Documents shall be
made to the Persons specified therein. The Administrative Agent
shall distribute any such payments received by it for the account
of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document
shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All
payments under each Loan Document shall be made in dollars.
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(b) If at any time insufficient funds are received
by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts
of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements
then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect
of any principal of or interest on any of its Revolving Loans or
participations in LC Disbursements or Swingline Loans resulting in
such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon
than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans and participations in
LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be
shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective
Revolving Loans and participations in LC Disbursements and
Swingline Loans, provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall
not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans
or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that
any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off
and counterclaim with respect to such participation as fully as if
such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the
Lenders or any Issuing Bank hereunder that the Borrower will not
make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the
Lenders or the applicable Issuing Bank, as the case may be, the
amount due. In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or such Issuing Bank, as
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the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender
or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate reasonably
determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.04(c), 2.05(d) or
(e), 2.06(b), 2.17(d) or 9.03(c), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement
of Lenders. (a) If any Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or
affiliates, if, in the reasonable judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in
the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.16, or if any Lender defaults
in its obligation to fund Loans hereunder, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights
and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if
a Lender accepts such assignment), provided that (i) the Borrower
shall have received the prior written consent of the
Administrative Agent, each Issuing Bank and the Swingline Lender),
which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and
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fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for
compensation under Section 2.14 or payments required to be made
pursuant to Section 2.16, such assignment will result in a
material reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation
if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders
that:
SECTION 3.01. Organization; Powers. The Borrower
and each of the Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on
its business as now conducted and, except where the failure to do
so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction
where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The
Transactions to be entered into by each Loan Party are within such
Loan Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of the
Borrower or such Loan Party (as the case may be), enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No
Conflicts. The Transactions (a) do not require any consent or
approval of, registration or filing with, or any other action by,
any Governmental Authority, except such as have been obtained or
made and are in full force and effect and except filings necessary
to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws
or other organizational documents of the Borrower or any of the
Subsidiaries or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture, agreement
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or other instrument binding upon the Borrower or any of the
Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of the
Subsidiaries, and (d) will not result in the creation or
imposition of any Lien (other than any Lien expressly permitted by
Section 6.02) on any asset of the Borrower or any of the
Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material
Adverse Change. (a) The Borrower has heretofore furnished to
the Lenders its consolidated balance sheets and related statements
of income, stockholders' equity and cash flows as of and for the
five fiscal years ended February 1, 1998, reported on by Ernst &
Young LLP, independent public accountants. Such financial
statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower
and the consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP.
(b) The Borrower has heretofore furnished to the
Lenders its pro forma consolidated balance sheet as of the
Effective Date, prepared giving effect to the Transactions as if
the Transactions had occurred on such date. Such pro forma
consolidated balance sheet (i) has been prepared in good faith
based on the same assumptions used to prepare the pro forma
financial statements included in the Information Memorandum (which
assumptions are believed by the Borrower to be reasonable), (ii)
is based on the best information available to the Borrower after
due inquiry, (iii) accurately reflects all adjustments necessary
to give effect to the Transactions and (iv) presents fairly, in
all material respects, the pro forma financial position of the
Borrower and the consolidated Subsidiaries as of the Effective
Date as if the Transactions had occurred on such date.
(c) Except as publicly disclosed by the Borrower
prior to the date hereof or as disclosed in the Information
Memorandum and except for the Disclosed Matters, after giving
effect to the Transactions, none of the Borrower or any of the
Subsidiaries has, as of the Effective Date, any material
contingent liabilities, unusual long-term commitments or
unrealized losses.
(d) Except as publicly disclosed by the Borrower
prior to the date hereof or as disclosed in the Information
Memorandum and except for the Disclosed Matters, since February 1,
1998, there has been no material adverse change in the business,
assets, operations, properties, condition (financial or
otherwise), contingent liabilities, or material agreements of the
Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the
Borrower and the Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property
material to its business (including its Mortgaged Properties),
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except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrower and the Subsidiaries
owns, or is licensed to use, all trademarks, trade names,
copyrights, patents and other intellectual property material to
its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each
real property that is owned or leased by the Borrower or any of
the Subsidiaries as of the Effective Date.
(d) As of the Effective Date, neither the Borrower
nor any of the Subsidiaries has received notice of, or has
knowledge of, any pending or contemplated condemnation proceeding
affecting any Mortgaged Property that, if determined adversely to
the Borrower, would materially impair the value of such Mortgaged
Property, or any sale or disposition thereof in lieu of
condemnation. Neither any Mortgaged Property nor any interest
therein is subject to any right of first refusal, option or other
contractual right to purchase such Mortgaged Property or interest
therein.
SECTION 3.06. Litigation and Environmental
Matters. (a) There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against
or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of the Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve any
of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect, none of the Borrower or any of the
Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other
approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice
of any claim with respect to any Environmental Liability or (iv)
knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect.
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SECTION 3.07. Compliance with Laws and Agreements.
The Borrower and each of the Subsidiaries is in compliance with
all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements
and other instruments binding upon it or its property, except
where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company
Status. None of the Borrower or any of the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940 or (b) a "holding
company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. The Borrower and each of the
Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it,
except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred
or is reasonably expected to occur that, when taken together with
all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $2,000,000
the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of all such underfunded
Plans by an amount that would be reasonably likely to result in a
Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has made
available to the Lenders all agreements, instruments and corporate
or other restrictions to which the Borrower or any of the
Subsidiaries is subject, and all other matters known to any of
them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other reports, financial
statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender
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in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided
that, with respect to projected financial information, the
Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets
forth the name of, and the ownership interest of the Borrower in,
each Subsidiary of the Borrower and identifies each Subsidiary
that is a Subsidiary Loan Party, in each case as of the Effective
Date.
SECTION 3.13. Insurance. Each of the Borrower and
the Subsidiaries maintains, with financially sound and reputable
insurance companies (a) adequate insurance for its insurable
properties, all to such extent and against such risks, including
fire, casualty and other risks insured against by extended
coverage, as is customary with companies in the same or similar
businesses operating in the same or similar locations and (b) such
other insurance as is required pursuant to the terms of any
Security Document. As of the Effective Date, all premiums in
respect of such insurance that are due and payable have been paid.
SECTION 3.14. Labor Matters. As of the Effective
Date, there are no strikes, lockouts or slowdowns against the
Borrower or any Subsidiary pending or, to the knowledge of the
Borrower, threatened, except for such strikes, lockouts or
slowdowns that could not reasonably be expected to result in a
Material Adverse Effect. The hours worked by and payments made to
employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters,
except where any such violations, individually or in the
aggregate, would not be reasonably likely to result in a Material
Adverse Effect. All material payments due from the Borrower or
any Subsidiary, or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower or such
Subsidiary. The consummation of the Transactions will not give
rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to
which the Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the
consummation of the Transactions to occur on the Effective Date
and immediately following the making of each Loan made on the
Effective Date and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of the
Borrower on a consolidated basis, at a fair valuation, will exceed
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its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of the
Borrower on a consolidated basis will be greater than the amount
that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c)
the Borrower on a consolidated basis will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) the
Borrower on a consolidated basis will not have unreasonably small
capital with which to conduct the business in which it is engaged
as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. Security Documents. (a) The Pledge
Agreement is effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in the
Pledge Agreement) and, when the Collateral is delivered to the
Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all
right, title and interest of the pledgor thereunder in such
Collateral, in each case prior and superior in right to any other
person.
(b) The Security Agreement is effective to create
in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Security Agreement) and, when
financing statements in appropriate form are filed in the offices
specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the
grantors thereunder in such Collateral (other than the
Intellectual Property (as defined in the Security Agreement)), in
each case prior and superior in right to any other person, other
than with respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the
United States Patent and Trademark Office and the United States
Copyright Office, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Intellectual Property (as
defined in the Security Agreement) in which a security interest
may be perfected by filing, recording or registering a security
agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright
Office, as applicable, in each case prior and superior in right to
any other person other than Liens expressly permitted by Section
6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the
Loan Parties after the date hereof).
(d) The Mortgages are effective to create, subject
to the exceptions listed in each title insurance policy covering
such Mortgage, in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable
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Lien on all of the Loan Parties' right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof,
and when the Mortgages are filed in the offices specified on
Schedule 3.16(d), the Mortgages shall constitute a Lien on, and
security interest in, all right, title and interest of the Loan
Parties in such Mortgaged Properties and the proceeds thereof, in
each case prior and superior in right to any other person, other
than with respect to the rights of persons pursuant to Liens
expressly permitted by Section 6.02.
SECTION 3.17. Federal Reserve Regulations. (a)
Neither the Borrower nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying
Margin Stock.
(b) No part of the proceeds of any Loan or any
Letter of Credit will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the
provisions of the Regulations of the Board, including Regulation
T, U or X.
SECTION 3.18. Senior Indebtedness. The monetary
Obligations constitute "Senior Debt" under and as defined in the
Subordinated Debt Documents.
SECTION 3.19. Year 2000. The Borrower has planned
and budgeted for measures, including systems and equipment
testing, to effect the reprogramming necessary to permit the
proper functioning, in and following the year 2000, of (a) the
computer systems of the Borrower and the Subsidiaries and (b) to
the extent reasonably practicable, other equipment containing
embedded microchips (including systems and equipment supplied by
others) and, to the extent reasonably practicable, the Borrower is
monitoring such reprogramming of systems of others with which the
systems of the Borrower and the Subsidiaries interface. Neither
the costs to the Borrower and the Subsidiaries of such
reprogramming and testing, nor the reasonably foreseeable
consequences of the occurrence of the year 2000 on such systems
and equipment (including reasonably discoverable reprogramming
errors and the reasonably foreseeable failures of others' systems
equipment) could reasonably be expected to result in a Default or
a Material Adverse Effect. Subject to such of the reprogramming
referred to in the immediately preceding sentence as may be
necessary, the computer and management information systems of the
Borrower and the Subsidiaries are, and (with ordinary course
upgrading and maintenance) will continue for the term of this
Agreement to be sufficient to permit the Borrower and the
Subsidiaries to conduct their business without causing a Material
Adverse Effect.
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ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of
the Lenders to make Loans and of any Issuing Bank to issue Letters
of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in
accordance with Section 9.02):
(a) The Administrative Agent (or its counsel)
shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy
transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of
this Agreement.
(b) The Administrative Agent shall have received a
favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the
Effective Date) of each of (i) Rosenman & Colin LLP,
counsel for the Borrower, substantially in the form of
Exhibit B, and (ii) local counsel in each jurisdiction
where a Mortgaged Property is located, substantially in
the form of Exhibit C, and, in the case of each such
opinion required by this paragraph, covering such other
matters relating to the Loan Parties, the Loan Documents
or the Transactions as the Required Lenders shall
reasonably request. The Borrower hereby requests such
counsel to deliver such opinions.
(c) The Administrative Agent shall have received
such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to
the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and
any other legal matters relating to the Loan Parties,
the Loan Documents or the Transactions, all in form and
substance satisfactory to the Administrative Agent and
its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the
Chairman of the Board, President, a Vice President or a
Financial Officer of the Borrower, confirming compliance
with the conditions set forth in paragraphs (a) and (b)
of Section 4.02.
(e) The Administrative Agent shall have received
all fees and other amounts due and payable on or prior
to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.
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(f) The Administrative Agent shall have received
counterparts of the Pledge Agreement signed on behalf of
the Borrower and each Subsidiary Loan Party thereto,
together with stock certificates representing all the
outstanding shares of capital stock of each Subsidiary
owned by or on behalf of any Loan Party as of the
Effective Date after giving effect to the Transactions
(except that stock certificates representing shares of
common stock of a Foreign Subsidiary may be limited to
65% of the outstanding shares of common stock of such
Foreign Subsidiary), any promissory notes evidencing
intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Effective Date
after giving effect to the Transactions and stock powers
and instruments of transfer, endorsed in blank, with
respect to such stock certificates and promissory notes.
(g) The Administrative Agent shall have received
counterparts of the Security Agreement signed on behalf
of the Borrower and each Subsidiary Loan Party, together
with the following:
(i) all documents and instruments, including
Uniform Commercial Code financing statements,
required by law or reasonably requested by the
Administrative Agent to be filed, registered or
recorded to create or perfect the Liens intended to
be created under the Security Agreement; and
(ii) a completed Perfection Certificate dated the
Effective Date and signed by an executive officer
or Financial Officer of the Borrower, together with
all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code
(or equivalent) filings made with respect to the
Loan Parties in the jurisdictions contemplated by
the Perfection Certificate and copies of the
financing statements (or similar documents)
disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or
have been released.
(h) The Administrative Agent shall have received
(i) counterparts of a Mortgage with respect to each
Mortgaged Property signed on behalf of the record owner
or lessee of such Mortgaged Property, together with a
legal property description thereof and (ii) a policy of
title insurance issued by a nationally recognized title
insurance Company, insuring the Lien of the Mortgage on
the Jonesville, North Carolina property as a valid first
Lien on the Mortgaged Property described therein, free
of any other Liens except as permitted by Section 6.02,
in form and substance reasonably acceptable to the
Collateral Agent, together with such endorsements,
coinsurance and reinsurance as the Collateral Agent or
the Required Lenders may reasonably request.
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(i) The Administrative Agent shall have received
(i) counterparts of the Guarantee Agreement signed on
behalf of each Subsidiary Loan Party and (ii)
counterparts of the Indemnity, Subrogation and
Contribution Agreement signed on behalf of the Borrower
and each Subsidiary Loan Party.
(j) The Administrative Agent shall have received
evidence satisfactory to it that the insurance required
by Section 5.07 is in effect.
(k) The Borrower shall have received not less than
$[149,229,000] in gross cash proceeds from the issuance
of the Subordinated Debt. The terms and conditions of
the Subordinated Debt (including but not limited to
terms and conditions relating to the interest rate,
fees, amortization, maturity, subordination, covenants,
events of defaults and remedies) shall be reasonably
satisfactory in all respects to the Administrative
Agent.
(l) The Administrative Agent shall have received
satisfactory evidence that (i) all loans outstanding
under, and all other amounts due in respect of, the
Existing Credit Agreement have been repaid in full and
the commitments thereunder have been permanently
terminated, (ii) the Borrower has redeemed all the
Senior Notes in accordance with the provisions of the
Note Purchase Agreements applicable to the Senior Notes
and (iii) the Borrower and the Subsidiaries have
outstanding no Indebtedness or shares of preferred stock
other than (A) the Loans and other extensions of credit
hereunder, (B) the Debentures, (C) the Subordinated Debt
and (iv) Indebtedness set forth in Schedule 6.01.
(m) The Lenders shall have received the audited and
unaudited financial statements referred to in Section
3.04(a), which audited and unaudited financial
statements shall not be materially inconsistent with the
financial statements or forecasts previously provided to
the Lenders.
(n) The Lenders shall have received the pro forma
consolidated balance sheet of the Borrower referred to
in Section 3.04(b), which balance sheet shall be
consistent in all material respects with the forecasts
previously provided to the Lenders.
(o) The Lenders shall be reasonably satisfied as to
the amount and nature of any Environmental Liabilities
and any employee health and safety exposures to which
the Borrower and the Subsidiaries may be subject and the
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Lenders shall have received environmental assessments
satisfactory to the Administrative Agent from an
environmental consulting firm satisfactory to the
Administrative Agent.
(p) There shall be no litigation or administrative
proceeding that would reasonably be expected to have a
Material Adverse Effect.
(q) The consummation of the Transactions and the
other transactions contemplated hereby shall not (a)
violate any applicable law, statute, rule or regulation
or (b) breach, or result in a default or event of
default under, any material agreement of the Borrower or
any of the Subsidiaries, and the Lenders shall have
received one or more legal opinions to such effect,
satisfactory to the Lenders, from counsel to the
Borrower satisfactory to the Lenders.
(r) All requisite material Governmental Authorities
and third parties shall have approved or consented to
the transactions contemplated hereby to the extent
required, all applicable appeal periods shall have
expired and there shall be no action by any Governmental
Authority, actual or threatened, that could reasonably
be expected to restrain, prevent or impose burdensome
conditions on the Transactions or the other transactions
contemplated hereby.
(s) The Administrative Agent shall have received a
Borrowing Request executed by the Borrower.
(t) The Administrative Agent shall have received
copies of all Schedules referred to in this Agreement,
which Schedules shall be reasonably responsive to the
information requirements of the Administrative Agent.
(u) Except as publicly disclosed by the Borrower
prior to the date hereof or as disclosed in the
Information Memorandum and except for the Disclosed
Matters, since February 1, 1998, there has been no
material adverse change in the business, assets,
operations, properties, condition (financial or
otherwise), contingent liabilities, prospects or
material agreements of the Borrower and the
Subsidiaries, taken as a whole.
The Administrative Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of any Issuing Bank to issue Letters of
Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section
9.02) at or prior to 3:00 p.m., New York City time, on May 15,
1998 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation
of each Lender to make a Loan on the occasion of any Borrowing,
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and of any Issuing Bank to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of each
Loan Party set forth in the Loan Documents shall be true
and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, except to the
extent such representations and warranties expressly
relate to an earlier date in which case such
representations and warranties shall be true and correct
as of such earlier date.
(b) At the time of and immediately after giving
effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension
of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a) and (b) of this
Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been
terminated and the principal of and interest on each Loan and all
fees payable hereunder shall have been paid in full and all
Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants
and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other
Information. The Borrower will furnish to the Administrative
Agent and each Lender:
(a) within 90 days after the end of each fiscal
year of the Borrower, its audited consolidated balance
sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and
for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all
reported on by Ernst & Young LLP or other independent
public accountants of recognized national standing
(without a "going concern" or like qualification or
exception and without any qualification or exception as
to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all
material respects the financial condition and results of
operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
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(b) within 50 days after the end of each of the
first three fiscal quarters of each fiscal year of the
Borrower, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case
of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects
the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments
and the absence of footnotes;
(c) concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate
of a Financial Officer of the Borrower (i) certifying as
to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii)
beginning with the delivery of financial statements for
the fiscal quarter of the Borrower ending on or about
July 31, 1998, setting forth reasonably detailed
calculations demonstrating compliance with Sections
6.12, 6.13, 6.14 and 6.15 and (iii) stating whether any
change in GAAP or in the application thereof has
occurred since the date of the Borrower's audited
financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of
such change on the financial statements accompanying
such certificate;
(d) concurrently with any delivery of financial
statements under clause (a) above, a certificate of the
accounting firm that reported on such financial
statements stating whether they obtained knowledge
during the course of their examination of such financial
statements of any Default (which certificate may be
limited to the extent required by accounting rules or
guidelines);
(e) no later than April 15 of each fiscal year of
the Borrower, a detailed consolidated budget for such
fiscal year (including (i) a projected consolidated
balance sheet and related statements of projected
operations and cash flow as of the end of and for such
fiscal year and (ii) a statement of the assumptions upon
which such budget is based) and, promptly when
available, any significant revisions of such budget;
(f) promptly after the same become publicly
available, copies of all periodic and other reports,
proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as
the case may be; and
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(g) promptly following any request therefor, such
other information regarding the operations, business
affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The
Borrower will furnish to the Administrative Agent and each Lender
written notice of the occurrence of any of the following events
promptly upon the occurrence of any such event coming to the
attention of any responsible officer of the Borrower:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit
or proceeding by or before any arbitrator or
Governmental Authority against or affecting the Borrower
or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any ERISA Event that, alone
or together with any other ERISA Events that have
occurred, could reasonably be expected to result in a
Material Adverse Effect; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the
Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.03. Information Regarding Collateral.
(a) The Borrower will furnish to the Administrative Agent prompt
written notice of any change (i) in any Loan Party's corporate
name or in any trade name used to identify it in the conduct of
its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal
place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or
facility at which Collateral owned by it having a fair market
value in excess of $10,000,000 is located (including the
establishment of any such new office or facility), (iii) in any
Loan Party's identity or corporate structure or (iv) in any Loan
Party's Federal Taxpayer Identification Number. The Borrower
agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order
for the Administrative Agent to continue at all times following
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such change to have a valid, legal and perfected security interest
in all the Collateral. The Borrower also agrees promptly to
notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual
financial statements with respect to the preceding fiscal year
pursuant to clause (a) of Section 5.01, the Borrower shall deliver
to the Administrative Agent a certificate of a Financial Officer
of the Borrower (i) setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the date
of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this
Section and (ii) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or
other appropriate filings, recordings or registrations, including
all refiling, rerecording and reregistrations, containing a
description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent
necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than 18 months after
the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The
Borrower will, and will cause each of the Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its
business, provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under
Section 6.03.
SECTION 5.05. Payment of Obligations. The
Borrower will, and will cause each of the Subsidiaries to, pay its
Indebtedness and other obligations, including Tax liabilities,
before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in
good faith through appropriate measures, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and
the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably
be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The
Borrower will, and will cause each of the Subsidiaries to, keep
and maintain all property material to the conduct of its business
in good working order and condition, ordinary wear and tear
excepted.
SECTION 5.07. Insurance. (a) The Borrower will,
and will cause each of the Subsidiaries to, maintain, with
financially sound and reputable insurance companies (i) adequate
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insurance for its insurable properties, all to such extent and
against such risks, including fire, casualty and other risks
insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same
or similar locations and (ii) such other insurance as is required
pursuant to the terms of any Security Document.
SECTION 5.08. Books and Records; Inspection and
Audit Rights. The Borrower will, and will cause each of the
Subsidiaries to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The
Borrower will, and will cause each of the Subsidiaries to, permit
any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable
times and as often as reasonably requested.
SECTION 5.09. Compliance with Laws. The Borrower
will, and will cause each of the Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.10. Use of Proceeds and Letters of
Credit. The proceeds of up to $75,000,000 in principal amount of
Revolving Loans will be used on the Effective Date only (a) to the
extent necessary following the application of the net proceeds of
the Subordinated Debt, to repay any remaining loans outstanding
under, and any other amounts due in respect of, the Existing
Credit Agreement, (b) for general corporate purposes and (c) for
the payment of fees and expenses payable in connection with the
Transactions. The proceeds of the Revolving Loans (other than
Revolving Loans referred to in the immediately preceding sentence)
and Swingline Loans will be used only (a) for general corporate
purposes, including the financing of acquisitions permitted by
this Agreement, and (b) to pay the consideration for any share
capital of Pyramid Partners acquired by the Borrower in accordance
with Section 6.04(a) . No part of the proceeds of any Loan will
be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board,
including Regulations T, U and X. Letters of Credit will be
issued only for general corporate purposes.
SECTION 5.11. Additional Subsidiaries. If any
additional Subsidiary is formed or acquired after the Effective
Date, the Borrower will notify the Administrative Agent and the
Lenders thereof and (a) if such Subsidiary is a Subsidiary Loan
Party, the Borrower will cause such Subsidiary to become a party
to the Guarantee Agreement, the Indemnity, Subrogation and
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Contribution Agreement and each applicable Security Document in
the manner provided therein within 15 Business Days after such
Subsidiary is formed or acquired and promptly take such actions to
create and perfect Liens on such Subsidiary's assets to secure the
Obligations as the Administrative Agent or the Required Lenders
shall reasonably request and (b) if any shares of capital stock or
Indebtedness of such Subsidiary are owned by or on behalf of any
Loan Party, the Borrower will cause such shares and promissory
notes evidencing such Indebtedness to be pledged pursuant to the
Pledge Agreement within 15 Business Days after such Subsidiary is
formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary, shares of common stock of such Subsidiary to be
pledged pursuant to the Pledge Agreement may be limited to 65% of
the outstanding shares of common stock of such Subsidiary).
SECTION 5.12. Further Assurances. (a) The
Borrower will, and will cause each Subsidiary Loan Party to,
execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions
(including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents),
that may be required under any applicable law, or which the
Administrative Agent or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens
created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the
Loan Parties. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence
reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be
created by the Security Documents.
(b) If any assets with a fair market value in
excess of $500,000 (including any real property or improvements
thereto or any interest therein other than leasehold interests in
real property) are acquired in a single transaction or a series of
related transactions by the Borrower or any Subsidiary Loan Party
after the Effective Date (other than (i) assets constituting
Collateral under the Security Agreement that become subject to the
Lien of the Security Agreement upon acquisition thereof and (ii)
equipment purchased by the Borrower or any Subsidiary Loan Party
that is to be and is transferred in accordance with the provisions
of Article VI to any Foreign Subsidiary within 30 days of the date
of delivery of such equipment), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, the Borrower
will cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the Subsidiary Loan Parties
to take, such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this
Section, all at the expense of the Loan Parties.
(c) On or before the date that is 60 days after
the date of this Agreement, the Administrative Agent shall have
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received (i) a policy or policies of title insurance issued by a
nationally recognized title insurance company, insuring the Lien
of each such Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as
permitted by Section 6.02, in form and substance reasonably
acceptable to the Collateral Agent, together with such
endorsements, coinsurance and reinsurance as the Collateral Agent
or the Required Lenders may reasonably request, (ii) such current
certified surveys as may be required pursuant to the Mortgages
with respect to each Mortgaged Property or as the Administrative
Agent or the Required Lenders may reasonably request, (iii) a copy
of the original permanent certificate or temporary certificate of
occupancy as the same may have been amended or issued from time to
time, covering each improvement located upon the Mortgaged
Properties, that were required to have been issued by the
appropriate Governmental Authority for such improvement and (iv)
written confirmation from the applicable zoning commission or
other appropriate Governmental Authority stating that with respect
to each Mortgaged Property as built it complies with existing land
use and zoning ordinances, regulations and restrictions applicable
to such Mortgaged Property.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated
and the principal of and interest on each Loan and all fees
payable hereunder have been paid in full and all Letters of Credit
have expired or terminated and all LC Disbursements shall have
been reimbursed, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Indebtedness; Certain Equity
Securities. (a) The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Subordinated Debt and the Debentures;
(iii) other Indebtedness existing on the date
hereof and set forth in Schedule 6.01 and extensions,
renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof
or result in an earlier maturity date or decreased
weighted average life thereof;
(iv) Indebtedness of the Borrower to any Subsidiary
and of any Subsidiary to the Borrower or any other
Subsidiary, provided that Indebtedness of any Subsidiary
that is not a Loan Party to the Borrower or any
Subsidiary Loan Party shall be subject to Section
6.04(d), (e) and (f);
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(v) Guarantees by the Borrower of Indebtedness of
any Subsidiary and by any Subsidiary of Indebtedness of
the Borrower or any other Subsidiary, provided that (A)
Guarantees by the Borrower or any Subsidiary Loan Party
of Indebtedness of any Subsidiary that is not a Loan
Party shall be subject to Section 6.04(d), (e) and (f),
(B) any Guarantee of the Subordinated Debt shall be
subject to Section 6.04(f) and (C) any such Guarantee
shall be permitted only to the extent that such
Guarantee would be permitted under the Subordinated Debt
Documents;
(vi) Indebtedness of the Borrower incurred to
finance the acquisition, construction or improvement of
any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life
thereof, provided that (A) such Indebtedness is incurred
prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (B)
the aggregate principal amount of Indebtedness permitted
by this clause (vi) shall not exceed $10,000,000 at any
time outstanding;
(vii) Indebtedness of any Person that becomes a
Subsidiary after the date hereof, provided that (A) such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and
(B) the aggregate principal amount of Indebtedness
permitted by this clause (vii) shall not exceed
$5,000,000 at any time outstanding, provided that up to
$3,000,000 aggregate principal amount of additional
Indebtedness shall be permitted under this clause (vii)
in connection with investments by the Borrower pursuant
to Section 6.04(a) ;
(viii) other unsecured Indebtedness in an aggregate
principal amount not exceeding $10,000,000 at any time
outstanding, provided that the aggregate principal
amount of Indebtedness of the Borrower's Subsidiaries
that are not Loan Parties permitted by this clause
(viii) shall not exceed $5,000,000 at any time
outstanding; and
(ix) Indebtedness of the Borrower under Hedging
Agreements entered into in accordance with Section 6.07,
provided that any Indebtedness of or Guarantee by a Subsidiary
under clause (iii), clause (iv), clause (v) or clause (viii) of
this Section 6.01(a) shall be permitted only to the extent that
such Indebtedness or Guarantee would be permitted under the
Debentures Indenture.
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(b) The Borrower will not, nor will it permit any
Subsidiary to, issue any preferred stock or be or become liable in
respect of any obligation (contingent or otherwise) to purchase,
redeem, retire, acquire or make any other payment in respect of
any shares of capital stock of the Borrower or any Subsidiary or
any option, warrant or other right to acquire any such shares of
capital stock except for any obligation of the Borrower to issue
preferred stock pursuant to the Rights Agreement, dated as of June
10, 1986, originally between the Borrower and The Chase Manhattan
Bank.
SECTION 6.02. Liens. The Borrower will not, and
will not permit any Subsidiary to, create, incur, assume or permit
to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens securing the Obligations;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the
Borrower or any Subsidiary existing on the date hereof
and set forth in Schedule 6.02, provided that (i) such
Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary, (ii) such Lien shall
secure only those obligations that it secures on the
date hereof and extensions, renewals and replacements
thereof that do not increase the principal amount
secured thereby and (iii) any such Lien shall be
permitted only to the extent that such Lien would be
permitted under the Debentures Indenture;
(d) any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any
Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary,
provided that (A) such Lien is not created in
contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may
be, (B) such Lien shall not apply to any other property
or assets of the Borrower or any Subsidiary and (C) such
Lien shall secure only those obligations that it secures
on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do
not increase the principal amount secured thereby;
(e) Liens on fixed or capital assets acquired,
constructed or improved by the Borrower or any
Subsidiary, provided that (A) such security interests
secure Indebtedness permitted by clause (vi) of Section
6.01(a), (B) such security interests and the
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Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion
of such construction or improvement, (C) the
Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed
or capital assets and (D) such security interests shall
not apply to any other property or assets of the
Borrower or any Subsidiary; and
(f) Liens (other than those permitted by paragraphs
(a) through (e) above) securing Indebtedness permitted
hereunder in an aggregate amount not exceeding
$2,000,000 at any time outstanding, provided that any
such Lien shall be permitted only to the extent that
such Lien would be permitted under the Debentures
Indenture.
SECTION 6.03. Fundamental Changes. (a) The
Borrower will not and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be
continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation,
(ii) any Subsidiary may merge into any Subsidiary Loan Party in a
transaction in which the surviving entity is a Subsidiary Loan
Party, (iii) any Subsidiary that is not a Loan Party may merge
into any Subsidiary that is not a Loan Party and (iv) any
Subsidiary may liquidate or dissolve if the Borrower determines in
good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to
the Lenders, provided in each case that any such merger involving
a Person that is not a wholly owned Subsidiary immediately prior
to such merger shall not be permitted unless also permitted by
Section 6.04.
(b) The Borrower will not, and will not permit any
of the Subsidiaries to, engage to any material extent in any
business other than businesses substantially of the type conducted
by the Borrower and the Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions. The Borrower will not, and will not
permit any of the Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee
any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any
assets of any other Person constituting a business unit, except:
(a) investments by the Borrower in all or a portion
of the share capital of Pyramid Partners not owned by
the Borrower on the date hereof, provided that (i) such
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share capital shall be purchased (A) free of all Liens
and encumbrances, (B) in one or more transactions the
first of which results in the Borrower owning at least
51% of the issued and outstanding share capital of
Pyramid Partners and (C) at the per-share "Earn-Out
Price" set forth in Amendment No. 1, dated as of January
1, 1997, to the Purchaser's Option Agreement, dated as
of January 10, 1996, among the Borrower and the other
parties thereto (or to the extent that the per-share
purchase price for such share capital is more than 10%
greater than it would have been had it been calculated
pursuant to such per-share Earn-Out Price, on financial
terms reasonably acceptable to the Required Lenders),
(ii) at the time of such investment and after giving pro
forma effect thereto, (A) no Default or Event of Default
shall have occurred or be continuing and (B) the
Borrower shall be in compliance with Section 6.13,
Section 6.14 and Section 6.15 and (iii) the Borrower
shall comply with the applicable provisions of Section
5.11;
(b) Permitted Investments;
(c) investments existing on the date hereof and set
forth on Schedule 6.04;
(d) investments by any Loan Party made after the
Effective Date in the capital stock of the Subsidiaries
(including any Subsidiary acquired after the date
hereof), provided that (i) any such shares of capital
stock shall be pledged pursuant to the Pledge Agreement
(subject to the limitations applicable to common stock
of a Foreign Subsidiary referred to in Section 5.11) and
(ii) the amount of investments by the Borrower in
Subsidiaries that are not Loan Parties under this clause
(d), together with loans and advances under
Section 6.04(e) and Guarantees under Section 6.04(f),
shall not exceed $10,000,000 in the aggregate at any
time outstanding;
(e) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or
any other Subsidiary, provided that (i) if any such
loans and advances made by a Loan Party are evidenced by
a promissory note, such promissory note shall be pledged
pursuant to the Pledge Agreement and (ii) the amount of
all such loans and advances by Loan Parties to
Subsidiaries that are not Loan Parties under this clause
(e), together with investments under Section 6.04(d) and
Guarantees under Section 6.04(f), shall not exceed
$10,000,000 in the aggregate at any time outstanding;
(f) Guarantees constituting Indebtedness permitted
by Section 6.01, provided that (i) a Subsidiary shall
not Guarantee the Subordinated Debt unless (A) such
Subsidiary also has Guaranteed the Obligations pursuant
to the Guarantee Agreement, (B) such Guarantee of the
Subordinated Debt is subordinated to such Guarantee of
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the Obligations on terms no less favorable to the
Lenders than the subordination provisions of the
Subordinated Debt and (C) such Guarantee of the
Subordinated Debt provides for the release and
termination thereof, without action by any party, upon
any release and termination of such Guarantee of the
Obligations and (ii) the amount of Indebtedness that is
(A) outstanding with respect to Subsidiaries that are
not Loan Parties and (B) Guaranteed by any Loan Party
under this clause (f), together with investments under
Section 6.04(d) and loans and advances under Section
6.04(e), shall not exceed $10,000,000 in the aggregate
at any time outstanding;
(g) loans to employees and officers of the Borrower
and the Subsidiaries in their capacity as such, in an
aggregate principal amount not to exceed $2,000,000 at
any time outstanding;
(h) Hedging Agreements permitted under Section
6.07;
(i) investments received in connection with the
bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of
business; and
(j) investments (other than those permitted by
paragraphs (a) through (i) above) in an aggregate amount
not to exceed $15,000,000 at any time outstanding.
SECTION 6.05. Asset Sales. The Borrower will not,
and will not permit any of the Subsidiaries to, sell, transfer,
lease or otherwise dispose of any asset, including any capital
stock, nor will the Borrower permit any of the Subsidiaries to
issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment,
surplus leasehold improvements in connection with store
closings and Permitted Investments in the ordinary
course of business;
(b) sales of inventory, used or surplus equipment
and real property in connection with the closing of the
Borrower's warehouse and manufacturing facilities in
Wilton, Maine, Reading, Pennsylvania, Augusta, Arkansas,
Brinkley, Arkansas, and Geneva, Alabama;
(c) sales, transfers and dispositions to the
Borrower or a Subsidiary, provided that any such sales,
transfers or dispositions involving a Subsidiary that is
not a Loan Party shall be made in compliance with
Section 6.09; and
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(d) sales, transfers and dispositions of assets
(other than capital stock of a Subsidiary) that are not
permitted by any other clause of this Section, provided
that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon
this clause (c) shall not exceed (i) $20,000,000 with
respect to any one such sale, transfer or disposition
and (ii) $25,000,000 in the aggregate with respect to
all such sales, transfers and dispositions during the
term of this Agreement,
provided that all sales, transfers, leases and other dispositions
permitted hereby shall be made for fair value and for at least 85%
cash consideration.
SECTION 6.06. Sale and Lease-Back Transactions.
The Borrower will not, and will not permit any of the Subsidiaries
to, enter into any arrangement, directly or indirectly, with any
person whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred,
provided that the Borrower and the Subsidiaries may enter into any
such transaction to the extent (a) such transaction would be
permitted by Section 6.05(d), (b) the Capital Lease Obligation and
Liens associated therewith would be permitted by Sections
6.01(a)(vi) and 6.02(e) and (c) such transaction would be
permitted under the Debentures Indenture.
SECTION 6.07. Hedging Agreements. The Borrower
will not, and will not permit any of the Subsidiaries to, enter
into any Hedging Agreement, other than Hedging Agreements entered
into in the ordinary course of business to hedge or mitigate risks
to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 6.08. Restricted Payments; Certain
Payments of Indebtedness. (a) The Borrower will not, and will not
permit any Subsidiary to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except (i)
the Borrower may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common
stock, (ii) Subsidiaries may declare and pay dividends ratably
with respect to their capital stock, (iii) the Borrower may make
Restricted Payments, not exceeding $5,000,000 during any fiscal
year, pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower
and the Subsidiaries and (iv) the Borrower may declare and pay
cash dividends with respect to its capital stock in an aggregate
amount of up to $6,000,000 in any fiscal year; provided, however,
that the Borrower may not pay cash dividends pursuant to this
clause (iv) in any fiscal quarter to the extent that the payment
of such dividends would not be permitted in such fiscal quarter
under the Subordinated Debt Documents.
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(b) The Borrower will not, and will not permit any
Subsidiary to, make or agree to pay or make, directly or
indirectly, any payment or other distribution (whether in cash
securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution
(whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancelation or termination of
any Indebtedness, except:
(i) payment of regularly scheduled interest and
principal payments as and when due in respect of any
Indebtedness, other than payments in respect of the
Subordinated Debt prohibited by the subordination
provisions thereof;
(ii) refinancings of Indebtedness to the extent
permitted by Section 6.01; and
(iii) payment of secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness.
SECTION 6.09. Transactions with Affiliates. The
Borrower will not, and will not permit any Subsidiary to, sell,
lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of
business that are at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties,
provided that any transaction (i) between the Borrower and any
Foreign Subsidiary or (ii) between any Subsidiary Loan Party and
any Foreign Subsidiary, in each case may be at prices and on terms
and conditions less favorable to such Foreign Subsidiary then
could be obtained on an arms-length basis from unrelated third
parties, (b) transactions between or among the Borrower and the
Subsidiary Loan Parties not involving any other Affiliate and (c)
any Restricted Payment permitted by Section 6.08.
SECTION 6.10. Restrictive Agreements. The
Borrower will not, and will not permit any Subsidiary to,
directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Subsidiary to
pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary, provided that (i) the
foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document, Subordinated Debt Document or the
Debentures, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.10
(or any extension or renewal of any such restriction or condition
on terms no less favorable to Borrower), but shall apply to any
amendment or modification expanding the scope of any such
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restriction or condition, (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness
and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment thereof.
SECTION 6.11. Amendment of Material Documents.
The Borrower will not, and will not permit any Subsidiary to,
amend, modify or waive any of its rights under (i) its certificate
of incorporation, by-laws or other organizational documents, (ii)
any Subordinated Debt Document or (iii) the Debentures Indenture,
in each case to the extent that such amendment, modification or
waiver would be adverse to the interests of the Lenders.
SECTION 6.12. Capital Expenditures. The Borrower
will not permit the aggregate amount of Capital Expenditures made
by the Borrower and the Subsidiaries in any fiscal year to exceed
the amount set forth below opposite such year, provided that for
any period set forth below, the dates constituting the beginning
and end of such period shall refer to the first and last day of
the fiscal year of the Borrower beginning and ending,
respectively, on or about such dates:
Fiscal Year Amount
Effective Date--January 31, 1999 $50,000,000
February 1, 1999--January 31, 2000 $27,500,000
February 1, 2000--January 31, 2001 $24,000,000
February 1, 2001--January 31, 2002 $30,000,000
February 1, 2002--January 31, 2003 $30,000,000
The amount of permitted Capital Expenditures set forth in the
immediately preceding sentence in respect of any fiscal year shall
be increased by (a) 25% of the amount of unused permitted Capital
Expenditures for the immediately preceding fiscal year less (b) an
amount equal to unused Capital Expenditures carried forward to
such preceding fiscal year.
SECTION 6.13. Leverage Ratio. The Borrower will
not permit the Leverage Ratio for any four-fiscal-quarter period
ending during any period set forth below to be in excess of the
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ratio set forth below opposite such period, provided that for any
period set forth below, the dates constituting the beginning and
end of such period shall refer to the last day of the fiscal
period of the Borrower ending on or about such dates:
Period Ratio
July 31, --October 31, 1998 5.00 to 1.00
November 1, 1998--January 31, 1999 4.75 to 1.00
February 1, 1999--January 31, 2000 4.00 to 1.00
February 1, 2000--January 31, 2001 3.25 to 1.00
Thereafter 3.00 to 1.00
SECTION 6.14. Consolidated Net Interest Expense
Coverage Ratio. The Borrower will not permit the Consolidated Net
Interest Expense Coverage Ratio for any four-fiscal-quarter period
ending during any period set forth below to be less than the ratio
set forth below opposite such period, provided that for any period
set forth below, the dates constituting the beginning and end of
such period shall refer to the last day of the fiscal period of
the Borrower ending on or about such dates:
Period Ratio
July 31, 1998--October 31, 1998 2.40 to 1.00
November 1, 1998--January 31, 1999 2.50 to 1.00
February 1, 1999--January 31, 2000 2.75 to 1.00
February 1, 2000--January 31, 2001 3.50 to 1.00
Thereafter 3.75 to 1.00
SECTION 6.15. Current Asset Coverage Ratio. The
Borrower will not permit the Current Asset Coverage Ratio as of
the end of any fiscal quarter to be less than 1.4 to 1.00.
SECTION 6.16. Fiscal Year. The Borrower will not,
and will not permit the Subsidiaries to, change the financial
reporting convention by which the Borrower and the Subsidiaries
determine the dates on which their fiscal years and fiscal
quarters will end.
SECTION 6.17. Subsidiaries. The Borrower will
not, and will not permit the Subsidiaries to, create, acquire or
permit to exist any Subsidiary other than (a) any Subsidiary all
the outstanding capital stock of which is owned by the Borrower or
one of its Subsidiaries and (b) Pyramid.
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ARTICLE VII
Events of Default
If any of the following events ("Events of
Default") shall occur:
(a) the Borrower shall fail to pay any principal of
any Loan or any reimbursement obligation in respect of
any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on
any Loan or any fee or any other amount (other than an
amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of
five days;
(c) any representation or warranty made or deemed
made by or on behalf of the Borrower or any Subsidiary
in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder,
or in any report, certificate, financial statement or
other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed
made;
(d) the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in
Section 5.02, 5.04 (with respect to the existence of
the Borrower), 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform
any covenant, condition or agreement contained in any
Loan Document (other than those specified in clause (a),
(b) or (d) of this Article), and such failure shall
continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any
Lender);
(f) the Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and
regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in
any Material Indebtedness becoming due prior to its
scheduled maturity or, after giving effect to any
applicable grace period, that enables or permits the
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holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity, provided that
this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed seeking (i)
liquidation, reorganization or other relief in respect
of the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the
foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief
under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter
in effect, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any
of the foregoing;
(j) the Borrower or any Subsidiary shall become
unable, admit in writing its inability or fail generally
to pay its debts as they become due;
(k) one or more judgments for the payment of money
in an aggregate amount in excess of $5,000,000 shall be
rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during
which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to
attach or levy upon any material assets of the Borrower
or any Subsidiary to enforce any such judgment;
(l) there shall have occurred and be continuing an
ERISA Event that, in the opinion of the Required
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Lenders, when taken together with all other ERISA Events
that have occurred and are continuing, could reasonably
be expected to result in a Material Adverse Effect;
(m) (i) any Lien purported to be created under any
Security Document shall cease to be a valid and
perfected Lien on any Collateral with a fair market
value, individually or in the aggregate, in excess of
$1,000,000, with the priority required by the applicable
Security Document, or any such Lien shall be contested
by a Loan Party, except (A) as a result of the sale or
other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (B) as
a result of the Administrative Agent's failure to
maintain possession of any stock certificates,
promissory notes or other instruments delivered to it
under the Pledge Agreement, or (ii) the provisions of
Section 7 of the Security Agreement shall cease to be in
full force and effect or any such provision shall be
contested by a Loan Party;
(n) the Debentures Trustee or "Holders" (as such
term is defined in the Debentures Indenture) of not less
than 66 2/3% in aggregate principal amount of the
"Outstanding Securities" (as such term is defined in the
Debentures Indenture) shall contest (i) the validity of
the Lien purported to be created under the Security
Agreement in favor of the Collateral Agent for the
benefit of the Secured Parties on the Collateral
described therein or (ii) the provisions of Section 7 of
the Security Agreement;
(o) the subordination provisions of the
Subordinated Debt shall cease to be in full force and
effect or any such provision shall be contested by the
Trustee under the Subordinated Debt Documents or the
"Holders" (as such term is defined in the Subordinated
Debt Documents) of a majority in aggregate principal
amount of the "Outstanding Notes" (as such term is
defined in the Subordinated Debt Documents); or
(p) a Change in Control shall occur;
then, and in every such event (other than an event with respect to
the Borrower described in clause (h) or (i) of this Article), and
at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding
to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall become due and payable
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immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby
waived by the Borrower.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
Each of the Lenders and each Issuing Bank hereby
irrevocably appoints The Chase Manhattan Bank as Administrative
Agent and Collateral Agent (for purposes of this Article VIII,
collectively, the "Agent") and authorizes the Agent to take such
actions on its behalf and to exercise such powers as are delegated
to the Agent by the terms of the Loan Documents, together with
such actions and powers as are reasonably incidental thereto.
The bank serving as the Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any
other Lender and may exercise the same as though it were not the
Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it
were not the Agent hereunder.
The Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Agent shall not
be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Agent
shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Agent
is required to exercise in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02),
and (c) except as expressly set forth in the Loan Documents, and
subject to applicable law, the Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of the Subsidiaries
that is communicated to or obtained by the bank serving as Agent
or any of its Affiliates in any capacity. The Agent shall not be
liable for any action taken or not taken by it with the consent or
at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of
its own gross negligence or wilful misconduct. The Agent shall
not be deemed to have knowledge of any Default unless and until
written notice thereof is given to the Agent by the Borrower or a
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Lender, and the Agent shall not be responsible for or have any
duty to ascertain or inquire into (a) any statement, warranty or
representation made in or in connection with any Loan Document,
(b) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (c) the
performance or observance of any of the covenants, agreements or
other terms or conditions set forth in any Loan Document, (d) the
validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document or (e) the
satisfaction of any condition set forth in Article IV or elsewhere
in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Agent.
The Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or
sent by the proper Person. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to
be made by the proper Person, and shall not incur any liability
for relying thereon. The Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more
sub-agents appointed by the Agent. The Agent and any such
sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of each Agent and
any such sub-agent, and shall apply to their respective activities
in connection with the syndication of the credit facilities
provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a
successor to the Agent as provided in this paragraph, the Agent
may resign at any time by notifying the Lenders, each Issuing Bank
and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, with the consent of the Borrower, not to be
unreasonably withheld, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Agent gives notice of its resignation, then the retiring Agent
may, on behalf of the Lenders and each Issuing Bank, appoint a
successor Agent that shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance
of its appointment as Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Agent
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shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After
the Agent's resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by
any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently
and without reliance upon the Agent or any other Lender and based
on such 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 Agent or any other
Lender and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of
notices and other communications expressly permitted to be given
by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail
or sent by telecopy, as follows:
(a) if to the Borrower, to it at Phillips-Van
Heusen Corporation, 1290 Avenue of the Americas, New
York, NY 10104, Attention of Treasurer (Telecopy No.
(212) 468-7231);
(b) if to the Administrative Agent, the Collateral
Agent, the Primary Issuing Bank or the Swingline Lender,
to The Chase Manhattan Bank, Loan and Agency Services
Group, One Chase Manhattan, 8th Floor, New York, New
York 10081, Attention of Janet Belden (Telecopy No.
(212) 552-5658), with a copy to The Chase Manhattan
Bank, 270 Park Avenue, New York 10017, Attention of
Margaret Lane (Telecopy No. (212) 270-5646); and
(c) if to any other Lender or Issuing Bank, to it
at its address (or telecopy number) set forth in its
Administrative Questionnaire.
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.
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SECTION 9.02. Waivers; Amendments. (a) No
failure or delay by the Administrative Agent, the Collateral
Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps
to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent, the Collateral
Agent, the Issuing Banks and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver
of any Default, regardless of whether the Administrative Agent,
the Collateral Agent, any Lender or any Issuing Bank may have had
notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived,
amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders or, in the case of any other
Loan Document, pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Loan Party or Loan
Parties that are parties thereto, in each case with the consent of
the Required Lenders, provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent
of such Lender, (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any
fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change
Section 2.17(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent
of each Lender, (v) change any of the provisions of this Section
or the definition of the term "Required Lenders" or any other
provision of any Loan Document specifying the number or percentage
of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi)
release any Subsidiary Loan Party from its Guarantee under the
Guarantee Agreement (except as expressly provided in such
Guarantee Agreement or as a result of the termination of the
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existence of such Subsidiary Loan Party in a transaction permitted
by Section 6.03), or limit its liability in respect of such
Guarantee, without the written consent of each Lender or (vii)
release all or substantially all of the Collateral from the Liens
of the Security Documents (except as expressly provided in such
Security Documents or Section 9.14), without the written consent
of each Lender, and provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, any Issuing Bank or
the Swingline Lender without the prior written consent of the
Administrative Agent, the Collateral Agent, such Issuing Bank or
the Swingline Lender, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral
Agent, and their Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent
and the Collateral Agent in connection with the syndication of the
credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred
by any Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for
payment thereunder, in each case as agreed upon with such Issuing
Bank, and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender, including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender, in connection
with the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section,
or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit.
(b) The Borrower shall indemnify the
Administrative Agent, the Collateral Agent, each Issuing Bank and
each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against,
and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery
of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by an Issuing
Bank to honor a demand for payment under a Letter of Credit issued
by such Issuing Bank if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any Mortgaged Property or any other
property currently or formerly owned or operated by the Borrower
or any of the Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of the Subsidiaries, or (iv) any
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actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto, provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted
from the gross negligence or wilful misconduct of such Indemnitee
or any Affiliate of such Indemnitee (or of any officer, director,
employee, advisor or agent of such Indemnitee or any of such
Indemnitee's Affiliates).
(c) To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative Agent,
the Collateral Agent, any Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to the Administrative Agent, the Collateral Agent,
the applicable Issuing Bank or the Swingline Lender, as the case
may be, such Lender's pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against
the Administrative Agent, the Collateral Agent, such Issuing Bank
or the Swingline Lender in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon
its share of the sum of the total Revolving Exposures, and unused
Commitments at the time.
(d) To the extent permitted by applicable law, the
Borrower shall not assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be
payable promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate of any
Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon
any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate
of any Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each
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of the Administrative Agent, the Collateral Agent, any Issuing
Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees
all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it), provided that (i) except in the
case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower and the Administrative Agent must give their
prior written consent to such assignment (which consent shall not
be unreasonably withheld), (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative
Agent) shall not be less than $10,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii)
each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire, and provided further that any
consent of the Borrower otherwise required under this paragraph
shall not be required if an Event of Default under clause (a),
(b),(h) or (i) of Article VII has occurred and is continuing.
Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified
in each Assignment and Acceptance the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder
shall, to the extent of the interest assigned by such Assignment
and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this
Section.
(c) The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its
offices in The City of New York a copy of each Assignment and
Acceptance delivered to 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 and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the
"Register"). Absent manifest error, the entries in
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the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Collateral Agent, any Issuing Bank and
the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower, any Issuing Bank and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required
by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the
Borrower, the Administrative Agent, any Issuing Bank or the
Swingline Lender, sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it),
provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent,
any Issuing Bank 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. Any
agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole
right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents,
provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to
any amendment, modification or waiver described in the first
proviso to Section 9.02(b) that affects such Participant. Subject
to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though
it were a Lender, provided such Participant agrees to be subject
to Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive
any greater payment under Section 2.14 or 2.16 than the applicable
Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign
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Lender if it were a Lender shall not be entitled to the benefits
of Section 2.16 unless the Borrower is notified of the
participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or
assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants,
agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have
been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any Issuing Bank or
any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII
shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration;
Effectiveness. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement, the
other Loan Document and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the
entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the
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signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of
an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this
Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the
remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.08. Right of Set-off. If an Event of
Default shall have occurred and be continuing, each Lender and
each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower against any of and
all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender may
have.
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process. (a) THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
(b) The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of
or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the
Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.
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(c) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in
any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices
in Section 9.01. Nothing in this Agreement or any other Loan
Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section
headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the
Administrative Agent, the Issuing Banks and the Lenders agrees to
maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and
its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will
be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent
required by applicable laws or regulations or by any subpoena or
similar legal process, provided that, to the extent reasonably
practicable and not prohibited by applicable laws or regulations
or by any judicial or administrative order, such Person will
provide the Borrower with prior notice of such disclosure, (d) to
any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or
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proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights
or obligations under this Agreement, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For
the purposes of this Section, the term "Information" means all
information received from the Borrower relating to the Borrower or
its business, other than any such information that is available to
the Administrative Agent, the Collateral Agent, any Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by
the Borrower. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to
have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality
of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan, together with all fees,
charges and other amounts that are treated as interest on such
Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") that may be
contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in
respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate
to the date of repayment, shall have been received by such Lender.
SECTION 9.14. Release of Collateral. (a) Upon the
occurrence of any sale, transfer or disposition of assets
permitted by, and consummated in accordance with, the provisions
of this Agreement, the Collateral Agent shall release from the
lien of the Security Documents the assets so sold, transferred or
otherwise disposed.
(b) Notwithstanding any provision of this Agreement
or any other Loan Document to the contrary, so long as no Default
or Event of Default has occurred and is continuing, the security
interests in all the Collateral under all the Security Documents
shall be released and the Security Documents shall be terminated
(and each of the Lenders (x) hereby consents to such release and
termination and (y) hereby authorizes the execution and delivery
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by the Administrative Agent and the Collateral Agent of the
documents and instruments and the delivery of the Collateral in
the possession of the Collateral Agent, in each case as
contemplated by paragraph (c) below) upon the request of the
Borrower if, at the time of such request, (i) the Ratings are BBB-
and Baa3, respectively or (ii)(A) one such Rating set forth in the
preceding clause (i) is in effect, (B) the Consolidated Net
Interest Expense Coverage Ratio as of the period of four
consecutive fiscal quarters of the Borrower most recently ended
and for which consolidated financial statements required to be
delivered to the Administrative Agent pursuant to Section 5.01(a)
or Section 5.01(b) have been delivered is greater than 5.50 to
1.00 and (C) the Leverage Ratio as of the period of four
consecutive fiscal quarters of the Borrower most recently ended
and for which consolidated financial statements required to be
delivered to the Administrative Agent pursuant to Section 5.01(a)
or Section 5.01(b) have been delivered is less than 2.50 to 1.00.
Notwithstanding anything in this Agreement to the contrary, the
Borrower shall not be entitled to request the release of all the
Collateral pursuant to this paragraph (b) unless, simultaneously
with the release of the security interests in all the Collateral
as contemplated by this paragraph (b), all security interests in
all the Collateral for the benefit of the Debentures are released.
(c) In connection with the above-described release
and termination, the Collateral Agent shall deliver to the
Borrower any Collateral in the Collateral Agent's possession and
the Administrative Agent and the Collateral Agent shall execute
and deliver, at the Borrower's expense, all documents and
instruments as the Borrower or any other Loan Party may reasonably
request to evidence such release and termination. Any such
execution and delivery of such documents or instruments shall be
without recourse to the Administrative Agent and the Collateral
Agent. Nothing in this Section 9.14 shall be construed to affect
the provisions of Section 6.02.
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
PHILLIPS-VAN HEUSEN CORPORATION,
by
/s/ Pamela N. Hootkin
Name: Pamela N. Hootkin
Title: Vice President
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent and Collateral Agent,
by
/s/ Marian N. Schulman
Name: Marian N. Schulman
Title: Vice President
CITICORP USA, INC., individually and
as Documentation Agent,
by
/s/ Allen Fisher
Name: Allen Fisher
Title: Vice President-
Attorney In Fact
AT&T COMMERCIAL FINANCE CORPORATION,
by
/s/ Paul Seidenwar
Name: Paul Seidenwar
Title: Assistant Vice
President
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BANKBOSTON, N.A.,
by
/s/ Peter Griswold
Name: Peter Griswold
Title: Director
BANK LEUMI USA,
by
/s/ John Koenigsberg
Name: John Koenigsberg
Title: Vice President
by
/s/ Paul Tine
Name: Paul Tine
Title: Vice President
THE BANK OF NEW YORK
by
/s/ Joanne Collett
Name: Joanne Collett
Title: Vice President
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK,
by
/s/ Norah McCann
Name: Norah McCann
Title: Senior Vice President
by
/s/ Karen A. Brinkman
Name: Karen A. Brinkman
Title: Vice President
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FLEET BANK, N.A.,
by
/s/ Stephen M. Leavenworth
Name: Stephen M. Leavenworth
Title: Vice President
NATIONSBANK, N.A.,
by
/s/ E. Phifer Helms
Name: E. Phifer Helms
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION
by
/s/ Donald V. Davis
Name: Donald V. Davis
Title: Vice President
STANDARD CHARTERED BANK
by
/s/ David D. Cutting
Name: David D. Cutting
Title: Senior Vice President
by
/s/ Kristina McDavid
Name: Kristina McDavid
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.,
by
/s/ Cecilia M. Valente
Name: Cecilia M. Valente
Title: Senior Vice President
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EXHIBIT D
[Form of]
GUARANTEE AGREEMENT dated as of April 22,
1998, among each of the subsidiaries listed on
Schedule I hereto (each such subsidiary,
individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors") of
PHILLIPS-VAN HEUSEN CORPORATION, a Delaware
corporation (the "Borrower"), and THE CHASE
MANHATTAN BANK, a New York banking corporation,
as collateral agent (the "Collateral Agent") for
the Secured Parties (as defined in the Credit
Agreement referred to below).
Reference is made to the Credit Agreement dated as of April
22, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the lenders
from time to time party thereto (the "Lenders") and The Chase
Manhattan Bank, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent") and as Collateral Agent.
Capitalized terms used herein and not defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and
the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement.
Each of the Subsidiary Guarantors is a wholly owned Subsidiary of
the Borrower and acknowledges that it will derive substantial
benefit from the making of the Loans by the Lenders, and the
issuance of the Letters of Credit by the Issuing Banks. The
obligations of the Lenders to make Loans and of the Issuing Banks
to issue Letters of Credit are conditioned on, among other things,
the execution and delivery by the Subsidiary Guarantors of a
Guarantee Agreement in the form hereof. As consideration therefor
and in order to induce the Lenders to make Loans and the Issuing
Banks to issue Letters of Credit, the Subsidiary Guarantors are
willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Subsidiary Guarantor
unconditionally guarantees (the "Guarantee"), jointly with the
other Subsidiary Guarantors and severally, as a primary obligor
and not merely as a surety, (a) the due and punctual payment by
the Borrower of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding,
<PAGE>
regardless of whether such interest is allowed or allowable as a
claim in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made by
the Borrower under the Credit Agreement in respect of any Letter
of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations
to provide cash collateral, and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether such monetary obligations are
allowed or allowable as a claim in such proceeding), of the
Borrower to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower
under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all
the covenants, agreements, obligations and liabilities of each
Loan Party under or pursuant to this Agreement and the other Loan
Documents, (d) the due and punctual payment and performance of all
obligations of the Borrower under each Hedging Agreement entered
into with any counterparty that was a Lender (or an Affiliate
thereof) at the time such Hedging Agreement was entered into and
(e) the due and punctual payment and performance of all
obligations in respect of overdrafts and related liabilities owed
to the Administrative Agent or any of its Affiliates and arising
from treasury, depository and cash management services in
connection with any automated clearing house transfers of funds
(all the monetary and other obligations described in the preceding
clauses (a) through (e) being collectively called the
"Obligations"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will
remain bound upon the Guarantee notwithstanding any extension or
renewal of any Obligation.
Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor
hereunder shall be limited to a maximum aggregate amount equal to
the greatest amount that would not render such Subsidiary
Guarantor's obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of
the United States Code or any provisions of applicable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Subsidiary
Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such Subsidiary Guarantor (a) in respect of
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intercompany indebtedness to the Borrower or Affiliates of the
Borrower to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Subsidiary Guarantor
hereunder and (b) under any guarantee of senior unsecured
indebtedness or Indebtedness subordinated in right of payment to
the Obligations, which guarantee contains a limitation as to
maximum amount similar to that set forth in this paragraph,
pursuant to which the liability of such Subsidiary Guarantor
hereunder is included in the liabilities taken into account in
determining such maximum amount) and after giving effect as assets
to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such
Subsidiary Guarantor pursuant to (i) applicable law or (ii) any
agreement providing for an equitable allocation among such
Subsidiary Guarantor and other Affiliates of the Borrower of
obligations arising under Guarantees by such parties (including
the Indemnity, Subrogation and Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Subsidiary Guarantor waives
presentment to, demand of payment from and protest to the Borrower
of any of the Obligations, and also waives notice of acceptance of
the Guarantee and notice of protest for nonpayment. To the
fullest extent permitted by applicable law, the obligations of
each Subsidiary Guarantor hereunder shall not be affected by (a)
the failure of the Collateral Agent or any other Secured Party to
assert any claim or demand or to enforce or exercise any right or
remedy against the Borrower or any other Subsidiary Guarantor
under the provisions of the Credit Agreement, any other Loan
Document or otherwise, (b) any rescission, waiver, amendment or
modification of, or any release from any of the terms or
provisions of this Agreement, any other Loan Document, any
Guarantee or any other agreement, including with respect to any
other Subsidiary Guarantor under this Agreement, or (c) the
failure to perfect any security interest in, or the release of,
any of the security held by or on behalf of the Collateral Agent
or any other Secured Party.
SECTION 3. Security. Each of the Subsidiary Guarantors
authorizes the Collateral Agent and each of the other Secured
Parties to (a) take and hold security for the payment of the
Guarantee and the Obligations and exchange, enforce, waive and
release any such security, (b) apply such security and direct the
order or manner of sale thereof as they in their sole discretion
may determine and (c) release or substitute any one or more
endorsees, other Subsidiary Guarantors or other obligors; in each
case, pursuant to the provisions of the Security Agreement..
SECTION 4. Guarantee of Payment. Each Subsidiary Guarantor
further agrees that the Guarantee constitutes a guarantee of
payment when due and not of collection, and waives any right to
require that any resort be had by the Collateral Agent or any
other Secured Party to any of the security held for payment of the
Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in
favor of the Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. To
the fullest extent permitted by applicable law, the obligations of
each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason
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<PAGE>
(other than the indefeasible payment in full in cash of the
Obligations), including any claim of waiver, release, surrender,
alteration or compromise of any of the Obligations, and shall not
be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each
Subsidiary Guarantor hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Collateral Agent or
any other Secured Party to assert any claim or demand or to
enforce any remedy under the Credit Agreement, any other Loan
Document or any other agreement, by any waiver or modification of
any provision of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Obligations, or by
any other act or omission that may or might in any manner or to
any extent vary the risk of any Subsidiary Guarantor or that would
otherwise operate as a discharge of each Subsidiary Guarantor as a
matter of law or equity (other than the indefeasible payment in
full in cash of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest
extent permitted by applicable law, each of the Subsidiary
Guarantors waives any defense based on or arising out of any
defense of the Borrower or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation from any
cause of the liability of the Borrower, other than the
indefeasible payment in full in cash of all the Obligations. The
Collateral Agent and the other Secured Parties may, at their
election, foreclose in accordance with the provision of the
Security Agreement and the Pledge Agreement on any security held
by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations,
make any other accommodation with the Borrower or any other
Subsidiary Guarantor or exercise any other right or remedy
available to them against the Borrower or any other Subsidiary
Guarantor, without affecting or impairing in any way the liability
of any Subsidiary Guarantor hereunder except to the extent that
all the Obligations have been indefeasibly paid in full in cash.
To the fullest extent permitted by applicable law, each of the
Subsidiary Guarantors waives any defense arising out of any such
election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such
Subsidiary Guarantor against the Borrower or any other Subsidiary
Guarantor or Subsidiary Guarantors, as the case may be, or any
security.
SECTION 7. Agreement to Pay; Subordination. In furtherance
of the foregoing and not in limitation of any other right that the
Collateral Agent or any other Secured Party has at law or in
equity against any Subsidiary Guarantor by virtue hereof, upon the
failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or
otherwise, each Subsidiary Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Collateral Agent or
such other Secured Party as designated thereby in cash the amount
4
<PAGE>
of such unpaid Obligations. Upon payment by any Subsidiary
Guarantor of any sums to the Collateral Agent or any Secured Party
as provided above, all rights of such Subsidiary Guarantor against
the Borrower arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of
payment to the prior indefeasible payment in full in cash of all
the Obligations. In addition, any indebtedness of the Borrower
now or hereafter held by any Subsidiary Guarantor is hereby
subordinated in right of payment to the prior payment in full of
the Obligations. If any amount shall erroneously be paid to any
Subsidiary Guarantor on account of (a) such subrogation,
contribution, reimbursement, indemnity or similar right or (b) any
such indebtedness of the Borrower, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith
be paid to the Collateral Agent to be credited against the payment
of the Obligations, whether matured or unmatured, in accordance
with the terms of the Loan Documents.
SECTION 8. Information. Each of the Subsidiary Guarantors
assumes all responsibility for being and keeping itself informed
of the Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that
such Subsidiary Guarantor assumes and incurs hereunder, and agrees
that none of the Collateral Agent or the other Secured Parties
will have any duty to advise any of the Subsidiary Guarantors of
information known to it or any of them regarding such
circumstances or risks.
SECTION 9. Representations and Warranties. Each of the
Subsidiary Guarantors represents and warrants as to itself that
all representations and warranties relating to it contained in the
Credit Agreement are true and correct.
SECTION 10. Termination. The Guarantees (a) shall
terminate when all the Obligations have been indefeasibly paid in
full and the Lenders have no further commitment to lend under the
Credit Agreement, the LC Exposure has been reduced to zero and the
Issuing Banks have no further obligation to issue Letters of
Credit under the Credit Agreement and (b) shall continue to be
effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by any Secured Party or any Subsidiary
Guarantor upon the bankruptcy or reorganization of the Borrower,
any Subsidiary Guarantor or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements
by or on behalf of the Subsidiary Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party
hereto and their respective successors and assigns. This
Agreement shall become effective as to any Subsidiary Guarantor
5
<PAGE>
when a counterpart hereof executed on behalf of such Subsidiary
Guarantor shall have been delivered to the Collateral Agent, and a
counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such
Subsidiary Guarantor and the Collateral Agent and their respective
successors and assigns, and shall inure to the benefit of such
Subsidiary Guarantor, the Collateral Agent and the other Secured
Parties, and their respective successors and assigns, except that
no Subsidiary Guarantor shall have the right to assign its rights
or obligations hereunder or any interest herein (and any such
attempted assignment shall be void). If all of the capital stock
of a Subsidiary Guarantor is sold, transferred or otherwise
disposed of pursuant to a transaction permitted by Section 6.05 of
the Credit Agreement, such Subsidiary Guarantor shall be released
from its obligations under this Agreement without further action.
This Agreement shall be construed as a separate agreement with
respect to each Subsidiary Guarantor and may be amended, modified,
supplemented, waived or released with respect to any Subsidiary
Guarantor without the approval of any other Subsidiary Guarantor
and without affecting the obligations of any other Subsidiary
Guarantor hereunder.
SECTION 12. Waivers; Amendment. (a) No failure or delay
of the Collateral Agent in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the other Secured Parties under
the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by
any Subsidiary Guarantor therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and
then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice
or demand on any Subsidiary Guarantor in any case shall entitle
such Subsidiary Guarantor to any other or further notice or demand
in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into between the Subsidiary Guarantors with respect to
which such waiver, amendment or modification relates and the
Collateral Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
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SECTION 14. Notices. All communications and notices
hereunder shall be in writing and given as provided in Section
9.01 of the Credit Agreement. All communications and notices
hereunder to each Subsidiary Guarantor shall be given to it in
care of the Borrower.
SECTION 15. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the
Subsidiary Guarantors herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered
to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the making by the Lenders of the
Loans and the issuance of the Letters of Credit by the Issuing
Banks regardless of any investigation made by the Secured Parties
or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or
any other fee or amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or the LC Exposure does
not equal zero and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and
of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 16. Counterparts. This Agreement may be executed
in counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute a single
contract, and shall become effective as provided in Section 11.
Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process.
(a) Each Subsidiary Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate
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court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Collateral Agent or any
other Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document
against any Subsidiary Guarantor or its properties in the courts
of any jurisdiction.
(b) Each Subsidiary Guarantor irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in
any court referred to in paragraph (a) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section
14. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 19. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Additional Subsidiary Guarantors. Pursuant to
Section 5.11 of the Credit Agreement, each Subsidiary Loan Party
that was not in existence or not a Subsidiary Loan Party on the
date of the Credit Agreement is required to enter into this
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Agreement as a Subsidiary Guarantor upon becoming a Subsidiary
Loan Party. Upon execution and delivery after the date hereof by
the Collateral Agent and such a Subsidiary Loan Party of an
instrument in the form of Annex 1, such Subsidiary Loan Party
shall become a Subsidiary Guarantor hereunder with the same force
and effect as if originally named as a Subsidiary Guarantor
herein. The execution and delivery of any instrument adding an
additional Subsidiary Guarantor as a party to this Agreement shall
not require the consent of any other Subsidiary Guarantor
hereunder. The rights and obligations of each Subsidiary
Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Subsidiary Guarantor as a
party to this Agreement.
SECTION 21. Right of Set-off. If an Event of Default shall
have occurred and be continuing, each Secured Party is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any
time held and other Indebtedness at any time owing by such Secured
Party to or for the credit or the account of any Subsidiary
Guarantor against any or all the obligations of such Subsidiary
Guarantor now or hereafter existing under this Agreement and the
other Loan Documents held by such Secured Party, irrespective of
whether or not such Secured Party shall have made any demand under
this Agreement or any other Loan Document and although such
obligations may be unmatured. The rights of each Secured Party
under this Section 21 are in addition to other rights and remedies
(including other rights of set-off) that such Secured Party may
have.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
by
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
10
<PAGE>
SCHEDULE I TO THE
Guarantee Agreement
Subsidiary Guarantor Address
<PAGE>
Annex 1 to the
Guarantee Agreement
SUPPLEMENT NO. dated as of
, to the Guarantee Agreement dated as of April
22, 1998, among each of the subsidiaries listed
on Schedule I thereto (each such subsidiary,
individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors") of
PHILLIPS-VAN HEUSEN CORPORATION, a Delaware
corporation (the "Borrower"), and THE CHASE
MANHATTAN BANK, a New York banking corporation,
as collateral agent (the "Collateral Agent") for
the Secured Parties (as defined in the Credit
Agreement referred to below).
A. Reference is made to the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
The Chase Manhattan Bank, as administrative agent for the Lenders
(in such capacity the "Administrative Agent") and as Collateral
Agent. Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the
Guarantee Agreement and the Credit Agreement.
C. The Subsidiary Guarantors have entered into the
Guarantee Agreement in order to induce the Lenders to make Loans
and the Issuing Banks to issue Letters of Credit. Pursuant to
Section 5.11 of the Credit Agreement, each Subsidiary Loan Party
that was not in existence or not a Subsidiary Loan Party on the
date of the Credit Agreement is required to enter into the
Guarantee Agreement as a Subsidiary Guarantor upon becoming a
Subsidiary Loan Party. Section 20 of the Guarantee Agreement
provides that additional Subsidiary Loan Parties of the Borrower
may become Subsidiary Guarantors under the Guarantee Agreement by
execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary Loan Party (the "New
Subsidiary Guarantor") is executing this Supplement in accordance
with the requirements of the Credit Agreement to become Subsidiary
Guarantor under the Guarantee Agreement in order to induce the
Lenders to make additional Loans and the Issuing Banks to issue
additional Letters of Credit and as consideration for Loans
previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Subsidiary
Guarantor agree as follows:
SECTION 1. In accordance with Section 20 of the Guarantee
Agreement, the New Subsidiary Guarantor by its signature below
becomes a Subsidiary Guarantor under the Guarantee Agreement with
<PAGE>
the same force and effect as if originally named therein as a
Subsidiary Guarantor and the New Subsidiary Guarantor hereby (a)
agrees to all the terms and provisions of the Guarantee Agreement
applicable to it as a Subsidiary Guarantor thereunder and (b)
represents and warrants that the representations and warranties
made by it as a Subsidiary Guarantor thereunder are true and
correct on and as of the date hereof. Each reference to a
"Subsidiary Guarantor" in the Guarantee Agreement shall be deemed
to include the New Subsidiary Guarantor. The Guarantee Agreement
is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Collateral Agent and the other Secured Parties
that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This
Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Subsidiary Guarantor and
the Collateral Agent. Delivery of an executed signature page to
this Supplement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Guarantee Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in
the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a
particular provision hereof in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any
other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall
be in writing and given as provided in Section 14 of the Guarantee
Agreement. All communications and notices hereunder to the New
2
<PAGE>
Subsidiary Guarantor shall be given to it at the address set forth
under its signature below, with a copy to the Borrower.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse
the Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Collateral
Agent.
3
<PAGE>
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Collateral Agent have duly executed this Supplement to the
Guarantee Agreement as of the day and year first above written.
[Name Of New Subsidiary Guarantor],
by
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
4
<PAGE>
EXHIBIT E
[Form of]
INDEMNITY, SUBROGATION and CONTRIBUTION
AGREEMENT dated as of April 22, 1998, among
PHILLIPS-VAN HEUSEN CORPORATION, a Delaware
corporation (the "Borrower"), each Subsidiary of
the Borrower listed on Schedule I hereto (the
"Guarantors") and THE CHASE MANHATTAN BANK, a
New York banking corporation ("Chase"), as
collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to
below).
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as administrative agent for the Lenders (in such capacity,
the "Administrative Agent") and Collateral Agent, and (b) the
Guarantee Agreement dated as of April 22, 1998 between the
Guarantors and the Collateral Agent (the "Guarantee Agreement").
Capitalized terms used herein and not defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and
the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement. The
Guarantors have guaranteed such Loans and the other Obligations
(as defined in the Guarantee Agreement) of the Borrower under the
Credit Agreement pursuant to the Guarantee Agreement; certain
Guarantors have granted Liens on and security interests in certain
of their assets to secure such guarantees. The obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of
Credit are conditioned on, among other things, the execution and
delivery by the Borrower and the Guarantors of an agreement in the
form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral
Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantors may
have under applicable law (but subject to Section 3), the Borrower
agrees that (a) in the event a payment shall be made by any
Guarantor under the Guarantee Agreement, such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall
have been made to the extent of such payment and the Borrower
<PAGE>
shall indemnify such Guarantor for the full amount of such payment
and (b) in the event any assets of any Guarantor shall be sold
pursuant to any Security Document to satisfy a claim of any
Secured Party, the Borrower shall indemnify such Guarantor in an
amount equal to the greater of (i) the book value of the assets so
sold and (ii) the fair market value of the assets so sold.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in
the event a payment shall be made by any other Guarantor under the
Guarantee Agreement or assets of any other Guarantor shall be sold
pursuant to any Security Document to satisfy a claim of any
Secured Party and such other Guarantor (the "Claiming Guarantor")
shall not have been fully indemnified by the Borrower as provided
in Sec tion 1, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the amount of such
payment or the greater of (i) the book value of the assets so sold
and (ii) the fair market value of such assets, as the case may be,
in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Guarantor on the date hereof
and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 12, the date of the
Supplement hereto executed and delivered by such Guarantor). Any
Contributing Guarantor making any payment to a Claiming Guarantor
pursuant to this Section 2 shall be subrogated to the rights of
such Claiming Guarantor under Section 1 to the extent of such
payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors under
Sections 1 and 2 and all other rights of indemnity, contribution
or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the
Obligations. No failure on the part of the Borrower or any
Guarantor to make the payments required by Sections 1 and 2 (or
any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any
Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of the
obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and
be in full force and effect so long as any Obligation is
outstanding and has not been indefeasibly paid in full in cash,
and so long as the LC Exposure has not been reduced to zero or any
of the Commitments under the Credit Agreement have not been
terminated, and shall continue to be effective or be reinstated,
as the case may be, if at any time payment, or any part thereof,
of any Obligation is rescinded or must otherwise be restored by
any Secured Party or any Guarantor upon the bankruptcy or
reorganization of the Borrower, any Guarantor or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
2
<PAGE>
SECTION 6. No Waiver; Amendment. (a) No failure on the
part of the Collateral Agent or any Guarantor to exercise, and no
delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Collateral
Agent or any Guarantor preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. None of the Collateral Agent or
any of the Guarantors shall be deemed to have waived any rights
hereunder unless such waiver shall be in writing and signed by
such parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into between the Borrower, the Guarantors and the
Collateral Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).
SECTION 7. Notices. All communications and notices
hereunder shall be in writing and given as provided in the
Guarantee Agreement and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of
such party, and all covenants, promises and agreements by or on
behalf of the parties that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and
assigns. Neither the Borrower nor any Guarantor may assign or
transfer any of its rights or obligations hereunder (and any such
attempted assignment or transfer shall be void) without the prior
written consent of the Required Lenders. Notwithstanding the
foregoing, at the time any Guarantor is released from its
obligations under the Guarantee Agreement in accordance with such
Guarantee Agreement and the Credit Agreement, such Guarantor will
cease to have any rights or obligations under this Agreement
except with respect to any payments made under this Agreement but
not reimbursed pursuant hereto.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Borrower and each Guarantor
herein and in the certificates or other instruments prepared or
delivered in connection with this Agreement or the other Loan
Documents shall be considered to have been relied upon by the
Collateral Agent, the other Secured Parties and each Guarantor and
shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit by the Issuing Banks, and shall
continue in full force and effect as long as the principal of or
any accrued interest on any Loans or any other fee or amount
payable under the Credit Agreement or this Agreement or under any
of the other Loan Documents is outstanding and unpaid or the LC
Exposure does not equal zero and as long as the Commitments have
not been terminated.
3
<PAGE>
(b) In case any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid,
illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
SECTION 10. Counterparts. This Agreement may be executed
in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.
This Agreement shall be effective with respect to any Guarantor
when a counterpart bearing the signature of such Guarantor shall
have been delivered to the Collateral Agent. Delivery of an
executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually
signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section
5.11 of the Credit Agreement, each Subsidiary Loan Party that was
not in existence or not a Subsidiary Loan Party on the date of the
Credit Agreement is required to enter into the Guarantee Agreement
as a Guarantor upon becoming a Subsidiary Loan Party. Upon
execution and delivery, after the date hereof, by the Collateral
Agent and such a Subsidiary Loan Party of an instrument in the
form of Annex 1 hereto, such Subsidiary Loan Party shall become a
Guarantor hereunder with the same force and effect as if
originally named as a Guarantor hereunder. The execution and
delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any
Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding
the addition of any new Guarantor as a party to this Agreement.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the date first appearing above.
PHILIPS-VAN HEUSEN CORPORATION,
by
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as a Guarantor,
by
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
5
<PAGE>
SCHEDULE I
to the Indemnity Subrogation
and Contribution Agreement
Guarantors
Name Address
<PAGE>
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of ,
to the Indemnity, Subrogation and Contribution
Agreement dated as of April 22, 1998 (as the
same may be amended, supplemented or otherwise
modified from time to time, the "Indemnity,
Subrogation and Contribution Agreement"), among
PHILLIPS-VAN HEUSEN CORPORATION, a Delaware
corporation (the "Borrower"), each Subsidiary of
the Borrower listed on Schedule I thereto (the
"Guarantors") and THE CHASE MANHATTAN BANK, a
New York banking corporation ("Chase"), as
collateral agent (the "Collateral Agent") for
the Secured Parties (as defined in the Credit
Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as
of April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as administrative agent for the Lenders (in such capacity,
the "Administrative Agent") and Collateral Agent, and (b) the
Guarantee Agreement dated as of April 22, 1998, among the
Guarantors and the Collateral Agent (the "Guarantee Agreement").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the
Indemnity, Subrogation and Contribution Agreement and the Credit
Agreement.
C. The Borrower and the Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to
induce the Lenders to make Loans and the Issuing Banks to issue
Letters of Credit. Pursuant to Section 5.11 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence or
not such a Subsidiary Loan Party on the date of the Credit
Agreement is required to enter into the Guarantee Agreement as a
Guarantor upon becoming a Subsidiary Loan Party. Section 12 of
the Indemnity, Subrogation and Contribution Agreement provides
that additional Subsidiary Loan Parties of the Borrower may become
Guarantors under the Indemnity, Subrogation and Contribution
Agreement by execution and delivery of an instrument in the form
of this Supplement. The undersigned Subsidiary Loan Party of the
Borrower (the "New Guarantor") is executing this Supplement in
accordance with the require ments of the Credit Agreement to
become a Guarantor under the Indemnity, Subrogation and
Contribution Agreement in order to induce the Lenders to make
additional Loans and the Issuing Banks to issue additional Letters
of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.
<PAGE>
Accordingly, the Collateral Agent and the New Guarantor
agree as follows:
SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its
signature below becomes a Guarantor under the Indemnity,
Subrogation and Contribution Agreement with the same force and
effect as if originally named therein as a Guarantor and the New
Guarantor hereby agrees to all the terms and provisions of the
Indemnity, Subrogation and Contribution Agreement applicable to it
as a Guarantor thereunder. Each reference to a "Guarantor" in the
Indemnity, Subrogation and Contribution Agreement shall be deemed
to include the New Guarantor. The Indemnity, Subrogation and
Contribution Agreement is hereby incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it
and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Supplement
shall become effective when the Collateral Agent shall have
received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the
Collateral Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in
full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, neither party hereto shall be
required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions
contained herein and in the Indemnity, Subrogation and
Contribution Agreement shall not in any way be affected or
impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
2
<PAGE>
SECTION 7. All communications and notices hereunder shall
be in writing and given as provided in Section 7 of the Indemnity,
Subrogation and Contribution Agreement. All communications and
notices hereunder to the New Guarantor shall be given to it at the
address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Collateral
Agent.
IN WITNESS WHEREOF, the New Guarantor and the Collateral
Agent have duly executed this Supplement to the Indemnity,
Subrogation and Contribution Agreement as of the day and year
first above written.
[Name Of New Guarantor],
by
Name:
Title:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
3
<PAGE>
SCHEDULE I
to Supplement No.___ to the Indemnity
Subrogation and Contribution Agreement
Guarantors
Name Address
<PAGE>
EXHIBIT F
[Form of]
PLEDGE AGREEMENT dated as of April
22, 1998, among PHILLIPS-VAN HEUSEN
CORPORATION, a Delaware corporation (the
"Borrower"), each Subsidiary of the
Borrower listed on Schedule I hereto (each
such Subsidiary, individually, a
"Subsidiary Pledgor" and, collectively,
the "Subsidiary Pledgors"; the Borrower
and the Subsidiary Pledgors are referred
to collectively herein as the "Pledgors")
and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase"), as
collateral agent (in such capacity, the
"Collateral Agent") for the Secured
Parties (as defined in the Credit
Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as administrative agent for the Lenders and as Collateral
Agent, (b) the Guarantee Agreement dated as of April 22, 1998 (as
amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement"), among the Subsidiary Guarantors and the
Collateral Agent and (c) the Indenture dated as of November 1,
1993, by and between the Borrower and The Bank of New York, as
Trustee for the holders (the "Debenture Holders") of the Company's
7-3/4% Debentures Due 2023.
The Lenders have agreed to make Loans to the Borrower and
the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement. The
Subsidiary Guarantors have agreed to guarantee, among other
things, all the obligations of the Borrower under the Credit
Agreement. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit are conditioned upon,
among other things, the execution and delivery by the Pledgors of
a Pledge Agreement in the form hereof to secure (a) the due and
punctual payment by the Borrower of (i) the principal of and
premium, if any, and interest (including interest accruing during
the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether such interest is allowed
or allowable as a claim in such proceeding) on the Loans, when and
as due, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise, (ii) each payment required
to be made by the Borrower under the Credit Agreement in respect
<PAGE>
of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether such monetary
obligations are allowed or allowable as a claim in such
proceeding), of the Borrower to the Secured Parties under the
Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and
liabilities of the Borrower under or pursuant to the Credit
Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all the covenants, agreements,
obligations and liabilities of each Loan Party under or pursuant
to this Agreement and the other Loan Documents, (d) the due and
punctual payment and performance of all obligations of the
Borrower under each Hedging Agreement entered into with any
counter party that was a Lender (or an Affiliate thereof) at the
time such Hedging Agreement was entered into, (e) the due and
punctual payment and performance of all obligations in respect of
overdrafts and related liabilities owed to the Administrative
Agent or any of its Affiliates and arising from treasury,
depository and cash management services in connection with any
automated clearing house transfers of funds and (f) the due and
punctual payment by the Company of all obligations and liabilities
of the Company in respect of the Debentures, when and as due,
whether at maturity, by acceleration, upon one or more dates set
for prepayment or otherwise (all the monetary and other
obligations described in the preceding clauses (a) through (f)
being collectively called the "Obligations"). Capitalized terms
used herein and not defined herein shall have meanings assigned to
such terms in the Credit Agreement.
Accordingly, the Pledgors and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their
respective successors or assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and
performance, as the case may be, in full of the Obligations, each
Pledgor hereby transfers, grants, bargains, sells, conveys,
hypothecates, pledges, sets over and delivers unto the Collateral
Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, a security interest in all of the
Pledgor's right, title and interest in, to and under (a) the
shares of capital stock or other equity interest (including any
equity interest in any joint venture listed on Schedule III hereto
(the "Joint Ventures")) owned by it and listed on Schedule II
hereto and any shares of capital stock or other equity interest of
or any Subsidiary or Joint Ventures obtained in the future by the
Pledgor and the certificates representing all such shares or
equity interest (the "Pledged Stock"), provided that the Pledged
Stock shall not include (i) more than 65% of the issued and
outstanding shares of stock of any Foreign Subsidiary or (ii) to
the extent that applicable law requires that a Subsidiary of the
Pledgor issue directors' qualifying shares, such qualifying
shares; (b)(i) the debt securities listed opposite the name of the
2
<PAGE>
Pledgor on Schedule II hereto, (ii) any debt securities in the
future issued to the Pledgor and (iii) the promissory notes and
any other instruments evidencing such debt securities other than
such promissory notes and instruments which in the aggregate do
not exceed $250,000 (the "Pledged Debt Securities"); (c) all other
property that may be delivered to and held by the Collateral Agent
pursuant to the terms hereof; (d) subject to Section 5, all
payments of principal or interest, dividends, cash, instruments
and other property from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the
conversion of the securities referred to in clauses (a) and (b)
above; (e) subject to Section 5, all rights and privileges of the
Pledgor with respect to the securities and other property referred
to in clauses (a), (b), (c) and (d) above; and (f) all proceeds of
any of the foregoing (the items referred to in clauses (a) through
(f) above being collectively referred to as the "Collateral").
Upon delivery to the Collateral Agent, (a) any stock certificates,
notes or other securities now or hereafter included in the
Collateral (the "Pledged Securities") shall be accompanied by
stock powers duly executed in blank or other instruments of
transfer satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably
request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Pledgor and such other
instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied
by a schedule describing the securities theretofore and then being
pledged hereunder, which schedule shall be attached hereto as
Schedule II and made a part hereof. Each schedule so delivered
shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, forever;
subject, however, to the terms, covenants and conditions
hereinafter set forth.
SECTION 2. Delivery of the Collateral. Each Pledgor agrees
promptly to deliver or cause to be delivered to the Collateral
Agent any and all Pledged Securities, and any and all certificates
or other instruments or documents representing the Collateral.
SECTION 3. Representations, Warranties and Covenants. Each
Pledgor hereby represents, warrants and covenants, as to itself
and the Collateral pledged by it hereunder, to and with the
Collateral Agent that:
(a) the Pledged Stock represents that percentage set
forth on Schedule II of the issued and outstanding shares of
each class of the capital stock or other equity interest of
the issuer with respect thereto;
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(b) except for the security interest granted
hereunder, the Pledgor (i) is and will at all times continue
to be the direct owner, beneficially and of record, of the
Pledged Securities indicated on Schedule II, (ii) holds the
same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create
or permit to exist any security interest in or other Lien
on, the Collateral, other than pursuant hereto, and (iv)
subject to Section 5, will cause any and all Collateral,
whether for value paid by the Pledgor or otherwise, to be
forthwith deposited with the Collateral Agent and pledged or
assigned hereunder;
(c) the Pledgor (i) has the power and authority to
pledge the Collateral in the manner hereby done or
contemplated and (ii) will defend its title or interest
thereto or therein against any and all Liens (other than the
Lien created by this Agreement), however arising, of all
persons whomsoever;
(d) no consent of any other person (including
stockholders or creditors of any Pledgor) and no consent or
approval of any Governmental Authority or any securities
exchange was or is necessary to the validity of the pledge
effected hereby other than such consents and approvals that
have been obtained;
(e) by virtue of the execution and delivery by the
Pledgors of this Agreement, when the Pledged Securities,
certificates or other documents representing or evidencing
the Collateral are delivered to the Collateral Agent in
accordance with this Agreement, the Collateral Agent will
obtain a valid and perfected first lien upon and security
interest in such Pledged Securities as security for the
payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in
the Collateral Agent, on behalf of the Secured Parties, the
rights of the Collateral Agent in the Collateral as set
forth herein;
(g) all the Pledged Stock has been duly authorized and
validly issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the
Pledged Stock is accurate and complete in all material
respects as of the date hereof; and
(i) the pledge of the Pledged Stock pursuant to this
Agreement does not violate Regulation T, U or X or any
successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations.
The Collateral Agent, on behalf of the Secured Parties, shall have
the right (in its sole and absolute discretion) to hold the
Pledged Securities in its own name as pledgee, the name of its
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nominee (as pledgee or as sub-agent) or the name of the Pledgors,
endorsed or assigned in blank or in favor of the Collateral Agent.
Each Pledgor will promptly give to the Collateral Agent copies of
any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor. The
Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with
this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a)
Unless and until an Event of Default shall have occurred and be
continuing:
(i) Each Pledgor shall be entitled to exercise any and
all voting and/or other consensual rights and powers inuring
to an owner of Pledged Securities or any part thereof for
any purpose consistent with the terms of this Agreement, the
Credit Agreement and the other Loan Documents; provided,
however, that such Pledgor will not be entitled to exercise
any such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the
Pledged Securities or the rights and remedies of any of the
Secured Parties under this Agreement or the Credit Agreement
or any other Loan Document or the ability of the Secured
Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to
each Pledgor, or cause to be executed and delivered to each
Pledgor, all such proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to exercise the voting
and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above and to receive
the cash dividends it is entitled to receive pursuant to
subparagraph (iii) below.
(iii) Each Pledgor shall be entitled to receive and
retain any and all cash dividends, interest and principal
paid on the Pledged Securities to the extent and only to the
extent that such cash dividends, interest and principal are
permitted by, and otherwise paid in accordance with, the
terms and conditions of the Credit Agreement, the other Loan
Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and
principal paid or payable in cash or otherwise in connection
with a partial or total liquidation or dissolution, return
of capital, capital surplus or paid-in surplus, and all
other distributions (other than distributions referred to in
the preceding sentence) made on or in respect of the Pledged
Securities, whether paid or payable in cash or otherwise,
whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the
issuer of any Pledged Securities or received in exchange for
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Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer
may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Pledgor, shall not be
commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom,
shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral
Agent in the same form as so received (with any necessary
endorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of any Pledgor to dividends, interest
or principal that such Pledgor is authorized to receive pursuant
to paragraph (a)(iii) above shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall have
the sole and exclusive right and authority to receive and retain
such dividends, interest or principal. All dividends, interest or
principal received by the Pledgor contrary to the provisions of
this Section 5 shall be held in trust for the benefit of the
Collateral Agent, shall be segregated from other property or funds
of such Pledgor and shall be forthwith delivered to the Collateral
Agent upon demand in the same form as so received (with any
necessary endorsement). Any and all money and other property paid
over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral
Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 7. After all
Events of Default have been cured or waived, the Collateral Agent
shall, within five Business Days after all such Events of Default
have been cured or waived, repay to each Pledgor all cash
dividends, interest or principal (without interest), that such
Pledgor would otherwise be permitted to retain pursuant to the
terms of paragraph (a)(iii) above and which remain in such
account.
(c) Upon the occurrence and during the continuance of an
Event of Default, all rights of any Pledgor to exercise the voting
and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 5, and the
obligations of the Collateral Agent under paragraph (a)(ii) of
this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole
and exclusive right and authority to exercise such voting and
consensual rights and powers, provided that, unless otherwise
directed by the Required Lenders, the Collateral Agent shall have
the right from time to time following and during the continuance
of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived,
such Pledgor will have the right to exercise the voting and
consensual rights and powers that it would otherwise be entitled
to exercise pursuant to the terms of paragraph (a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and
during the continuance of an Event of Default, subject to
applicable regulatory and legal requirements, the Collateral Agent
may sell the Collateral, or any part thereof, at public or private
sale or at any broker's board or on any securities exchange, for
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cash, upon credit or for future delivery as the Collateral Agent
shall deem appropriate. The Collateral Agent shall be authorized
at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for
their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such
sale the Collateral Agent shall have the right to assign, transfer
and deliver to the purchaser or purchasers thereof the Collateral
so sold. Each such purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part
of any Pledgor, and, to the extent permitted by applicable law,
the Pledgors hereby waive all rights of redemption, stay,
valuation and appraisal any Pledgor now has or may at any time in
the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give a Pledgor 10 days' prior
written notice (which each Pledgor agrees is reasonable notice
within the meaning of Section 9-504(3) of the Uniform Commercial
Code as in effect in the State of New York or its equivalent in
other jurisdictions) of the Collateral Agent's intention to make
any sale of such Pledgor's Collateral. Such notice, in the case
of a public sale, shall state the time and place for such sale
and, in the case of a sale at a broker's board or on a securities
exchange, shall state the board or exchange at which such sale is
to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At
any such sale, the Collateral, or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make
any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned.
In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the sale price is paid in
full by the purchaser or purchasers thereof, but the Collateral
Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold
again upon like notice. At any public (or, to the extent
permitted by applicable law, private) sale made pursuant to this
Section 6, any Secured Party may bid for or purchase, free from
any right of redemption, stay or appraisal on the part of any
Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make
payment on account thereof by using any claim then due and payable
to it from such Pledgor as a credit against the purchase price,
and it may, upon compliance with the terms of sale, hold, retain
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and dispose of such property without further accountability to
such Pledgor therefor. For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall
be treated as a sale thereof, (b) the Collateral Agent shall be
free to carry out such sale pursuant to such agreement and (c)
such Pledgor shall not be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact
that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the
power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose upon
the Collateral and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of
this Section 6 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-504(3) of the
Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions.
SECTION 7. Intercreditor Agreements; Collateral Agent. (a)
By acceptance of the benefits of this Agreement, each of the
Secured Parties shall be deemed to have agreed to be bound by the
terms hereof. The provisions of this Section 7 are, and are
intended, solely to establish certain rights as between the
Secured Parties and shall not create, and shall not be construed
as creating, any rights enforceable by any Pledgor, any Subsidiary
or any Affiliate of any Pledgor (regardless of whether such
Pledgor, Subsidiary or Affiliate is a Secured Party).
(b) By acceptance of the benefits of this Agreement, each
of the Secured Parties shall be deemed irrevocably (i) to consent
to the appointment of the Collateral Agent as its agent hereunder,
(ii) to confirm that the Collateral Agent shall have the authority
to act as the exclusive agent of such Secured Party for
enforcement of any provisions of this Agreement against any
Pledgor or the exercise of remedies hereunder and (iii) to agree
that such Secured Party shall not take any action to enforce any
provisions of this Agreement against any Pledgor or to exercise
any remedy hereunder.
(c) The Collateral Agent may act or refrain from acting
hereunder, and shall not incur any liability to the Secured
Parties for acting or refraining from acting hereunder, in
accordance with any such consent, direction or request of the
Required Lenders as shall be required or permitted under the
Credit Agreement. The Debenture Holders as Secured Parties shall
not be entitled to, and shall not, (i) direct the actions of the
Collateral Agent hereunder, (ii) take any action, or commence any
legal proceeding seeking, to require, compel or cause the
Collateral Agent to enforce any provisions of this Agreement
against any Pledgor or to exercise any remedy hereunder, (iii)
take any action, or commence any legal proceeding seeking, to
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prevent or enjoin the Collateral Agent from taking any action
(including, without limitation, the enforcement of any provisions
of this Agreement against any Pledgor, the exercise of any remedy
hereunder, the release of any Collateral hereunder or the consent
to any amendment or modification of this Agreement or the grant of
any waiver hereunder), or refraining from taking any such action,
in accordance with this Agreement or (iv) take any action, or
commence any legal proceeding seeking, to delay, hinder or
otherwise impair the Collateral Agent in taking any such action in
accordance with this Agreement. By acceptance of the benefits
under this Agreement, the Debenture Holders as Secured Parties
will be deemed to have acknowledged and agreed that the provisions
of the preceding sentence are intended to induce the Lenders to
permit the Debenture Holders to be Secured Parties under this
Agreement and are being relied upon by the Lenders as
consideration therefor.
(d) THE COLLATERAL AGENT HAS CONSENTED TO SERVE AS
COLLATERAL AGENT HEREUNDER ON THE EXPRESS UNDERSTANDING, AND THE
DEBENTURE HOLDERS AS SECURED PARTIES, BY ACCEPTING THE BENEFITS OF
THIS AGREEMENT, SHALL BE DEEMED TO HAVE AGREED, THAT THE
COLLATERAL AGENT SHALL HAVE NO DUTY AND SHALL OWE NO OBLIGATION OR
RESPONSIBILITY (FIDUCIARY OR OTHERWISE) TO THE DEBENTURE HOLDERS
AS SECURED PARTIES, OTHER THAN THE DUTY TO PERFORM ITS EXPRESS
OBLIGATIONS UNDER THIS AGREEMENT IN ACCORDANCE WITH THEIR TERMS,
SUBJECT IN ALL EVENTS TO THE PROVISIONS OF SECTIONS 8 AND 9 AND
THE OTHER PROVISIONS OF THIS AGREEMENT LIMITING THE RESPONSIBILITY
OR LIABILITY OF THE COLLATERAL AGENT HEREUNDER.
(e) Each Secured Party shall, ratably in accordance with
the amount of Secured Obligations owed to it, indemnify the
Collateral Agent (to the extent it shall not have been reimbursed
by the Pledgors) against any expense or liability that the
Collateral Agent would be entitled to recover from the Pledgors
pursuant to Section 9. Any amount so owed by a Secured Party can
be withheld by the Collateral Agent from any amount owed to such
Secured Party.
SECTION 8. Application of Proceeds of Sale. The proceeds
of any sale of Collateral pursuant to Section 6, as well as any
Collateral consisting of cash, shall be applied by the Collateral
Agent as follows:
FIRST, to the payment of all costs and expenses
incurred by the Collateral Agent in connection with such
sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all
court costs and the reasonable fees and expenses of its
agents and legal counsel, the repayment of all advances made
by the Collateral Agent hereunder or under any other Loan
Document on behalf of any Pledgor and any other costs or
expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Loan Document;
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SECOND, to the payment in full of the Obligations (the
amounts so applied to be distributed among the Secured
Parties pro rata in accordance with the amounts of the
Obligations owed to them on the date of any such
distribution); and
THIRD, to the Pledgors, their successors or assigns,
or as a court of competent jurisdiction may otherwise
direct.
The Collateral Agent shall have absolute discretion as to
the time of application of any such proceeds, moneys or balances
in accordance with this Agreement. Upon any sale of the
Collateral by the Collateral Agent (including pursuant to a power
of sale granted by statute or under a judicial proceeding), the
receipt of the purchase money by the Collateral Agent or of the
officer making the sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the
Collateral Agent or such officer or be answerable in any way for
the misapplication thereof.
SECTION 9. Reimbursement of Collateral Agent; Indemnity.
(a) Each Pledgor agrees to pay upon demand to the Collateral
Agent the amount of any and all reasonable expenses, including the
reasonable fees, other charges and disbursements of its counsel
and of any experts or agents, that the Collateral Agent may incur
in connection with (i) the administration of this Agreement, (ii)
the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Collateral
Agent hereunder or (iv) the failure by such Pledgor to perform or
observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, each Pledgor agrees to indemnify
the Collateral Agent and the Indemnitees (as defined in Section
9.03 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, other
charges and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any
other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby or
(ii) any claim, litigation, investigation or proceeding relating
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to any of the foregoing, whether or not any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee or any
Affiliate of such Indemnitee (or of any officer, director,
employee, advisor or agent of such Indemnitee or any of such
Indemnitee's Affiliates).
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security
Documents. The provisions of this Section 9 shall remain
operative and in full force and effect regardless of the
termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Collateral Agent or any
other Secured Party. All amounts due under this Section 9 shall
be payable on written demand therefor and shall bear interest at
the rate specified in Section 2.13 of the Credit Agreement.
SECTION 10. Collateral Agent Appointed Attorney-in-Fact.
Each Pledgor hereby appoints the Collateral Agent the
attorney-in-fact of such Pledgor for the purpose of carrying out
the provisions of this Agreement and taking any action and
executing any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Collateral Agent
shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of
substitution either in the Collateral Agent's name or in the name
of such Pledgor, to ask for, demand, sue for, collect, receive and
give acquittance for any and all moneys due or to become due under
and by virtue of any Collateral, to endorse checks, drafts, orders
and other instruments for the payment of money payable to the
Pledgor representing any interest or dividend or other
distribution payable in respect of the Collateral or any part
thereof or on account thereof and to give full discharge for the
same, to settle, compromise, prosecute or defend any action, claim
or proceeding with respect thereto, and to sell, assign, endorse,
pledge, transfer and to make any agreement respecting, or
otherwise deal with, the same; provided, however, that nothing
herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to
take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually
received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees
or agents shall be responsible to any Pledgor for any act or
failure to act hereunder, except for their own gross negligence or
wilful misconduct.
SECTION 11. Waivers; Amendment. (a) No failure or delay
of the Collateral Agent in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
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any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent
hereunder and of the other Secured Parties under the other Loan
Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any
provisions of this Agreement or consent to any departure by any
Pledgor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Pledgor
in any case shall entitle such Pledgor to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into between the Collateral Agent and the Pledgor or
Pledgors with respect to which such waiver, amendment or
modification is to apply, subject to any consent required in
accordance with Section 9.02 of the Credit Agreement.
SECTION 12. Securities Act, etc. In view of the position
of the Pledgors in relation to the Pledged Securities, or because
of other current or future circumstances, a question may arise
under the Securities Act of 1933, as now or hereafter in effect,
or any similar statute hereafter enacted analogous in purpose or
effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Securities permitted hereunder.
Each Pledgor understands that compliance with the Federal
Securities Laws might very strictly limit the course of conduct of
the Collateral Agent if the Collateral Agent were to attempt to
dispose of all or any part of the Pledged Securities, and might
also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Securities could dispose of
the same. Similarly, there may be other legal restrictions or
limitations affecting the Collateral Agent in any attempt to
dispose of all or part of the Pledged Securities under applicable
Blue Sky or other state securities laws or similar laws analogous
in purpose or effect. Each Pledgor recognizes that in light of
such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Pledged Securities, limit the
purchasers to those who will agree, among other things, to acquire
such Pledged Securities for their own account, for investment, and
not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute
discretion, (a) may proceed in compliance with applicable law to
make such a sale whether or not a registration statement for the
purpose of registering such Pledged Securities or part thereof
shall have been filed under the Federal Securities Laws and (b)
may approach and negotiate with a single potential purchaser to
effect such sale. Each Pledgor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to
the seller than if such sale were a public sale without such
restrictions. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability to Pledgor for selling
all or any part of the Pledged Securities at a price that the
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Collateral Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might have been
realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The
provisions of this Section 12 will apply notwithstanding the
existence of a public or private market upon which the quotations
or sales prices may exceed substantially the price at which the
Collateral Agent sells.
SECTION 13. Registration, etc. Each Pledgor agrees that,
upon the occurrence and during the continuance of an Event of
Default hereunder, if for any reason the Collateral Agent desires
to sell any of the Pledged Securities of the Borrower at a public
sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its best efforts to take or
to cause the issuer of such Pledged Securities to take such action
and prepare, distribute and/or file such documents, as are
required or advisable in the reasonable opinion of counsel for the
Collateral Agent to permit the public sale of such Pledged
Securities. Each Pledgor further agrees to indemnify, defend and
hold harmless the Collateral Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates
and controlling persons from and against all loss, liability,
expenses, costs of counsel (including reasonable fees and expenses
to the Collateral Agent of legal counsel), and claims (including
the costs of investigation) that they may incur insofar as such
loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any
prospectus (or any amendment or supplement thereto) or in any
notification or offering circular, or arises out of or is based
upon any alleged omission to state a material fact required to be
stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by
any untrue statement or omission based upon information furnished
in writing to such Pledgor or the issuer of such Pledged
Securities by the Collateral Agent or any other Secured Party
expressly for use therein. Each Pledgor further agrees, upon such
written request referred to above, but only so long as the Event
of Default is continuing, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Securities to
qualify, file or register, any of the Pledged Securities under the
Blue Sky or other securities laws of such states as may be
requested by the Collateral Agent and keep effective, or cause to
be kept effective, all such qualifications, filings or
registrations. Each Pledgor will bear all costs and expenses of
carrying out its obligations under this Section 13. Each Pledgor
acknowledges that there is no adequate remedy at law for failure
by it to comply with the provisions of this Section 13 and that
such failure would not be adequately compensable in damages, and
therefore agrees that its agreements contained in this Section 13
may be specifically enforced.
SECTION 14. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the grant of a security interest in
the Collateral and all obligations of each Pledgor hereunder,
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<PAGE>
shall be absolute and unconditional irrespective of (a) any lack
of validity or enforceability of the Credit Agreement, any other
Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement, any other Loan Document
or any other agreement or instrument relating to any of the
foregoing, (c) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to
or departure from any guaranty, for all or any of the Obligations
or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of
the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all the Obligations).
SECTION 15. Termination or Release. (a) This Agreement
and the security interests granted hereby shall terminate when (i)
all the Obligations have been indefeasibly paid in full in cash
and the Lenders have no further commitment to lend under the
Credit Agreement, the LC Exposure has been reduced to zero and the
Issuing Banks have no further obligation to issue Letters of
Credit under the Credit Agreement or (ii) upon the earlier
occurrence of the conditions for release and termination set forth
in Section 9.14 of the Credit Agreement.
(b) Upon any sale or other transfer by any Pledgor of any
Collateral that is permitted under the Credit Agreement to any
person that is not a Pledgor, or, upon the effectiveness of any
written consent to the release of the security interest granted
hereby in any Collateral pursuant to Section 9.02(b) of the Credit
Agreement, the security interest in such Collateral shall be
automatically released.
(c) In connection with any termination or release pursuant
to paragraph (a) or (b) above, the Collateral Agent shall promptly
deliver to Pledgor all items of Collateral in its possession or
control and execute and deliver to any Pledgor, at such Pledgor's
expense, all documents that such Pledgor shall reasonably request
to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 15 shall be without
recourse to or warranty by the Collateral Agent, except in respect
of the Collateral Agent's gross negligence or willful misconduct.
SECTION 16. Notices. All communications and notices
hereunder shall be in writing and given as provided in Section
9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Pledgor shall be given to it at the
address for notices set forth on Schedule I (in care of the
Borrower). All communications and notices hereunder to the
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<PAGE>
Debenture Holders shall be given to such Debenture Holders (c/o
the Trustee) at: The Bank of New York, 101 Barclay Street, 21st
Floor West, New York, NY 10286, Attention: Corporate Trust
Administration.
SECTION 17. Further Assurances. Each Pledgor agrees to do
such further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements and instruments,
as the Collateral Agent may at any time reasonably request in
connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or
in order better to assure and confirm unto the Collateral Agent
its rights and remedies hereunder.
SECTION 18. Binding Effect; Several Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements
by or on behalf of any Pledgor that are contained in this
Agreement shall bind and inure to the benefit of its successors
and assigns. This Agreement shall become effective as to any
Pledgor when a counterpart hereof executed on behalf of such
Pledgor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors
and assigns, and shall inure to the benefit of such Pledgor, the
Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Pledgor shall
have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment
shall be void), except as expressly contemplated by this Agreement
or the other Loan Documents. If all the capital stock of a
Pledgor is sold, transferred or otherwise disposed of to a person
that is not an Affiliate of the Borrower pursuant to a transaction
permitted by Section 6.05 of the Credit Agreement, such Pledgor
shall be released from its obligations under this Agreement
without further action. This Agreement shall be construed as a
separate agreement with respect to each Pledgor and may be
amended, modified, supplemented, waived or released with respect
to any Pledgor without the approval of any other Pledgor and
without affecting the obligations of any other Pledgor hereunder.
SECTION 19. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by each
Pledgor herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have
been relied upon by the Collateral Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans
and the issuance of the Letters of Credit by the Issuing Banks,
regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long
15
<PAGE>
as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or the LC Exposure does not
equal zero and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The
parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 20. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute
a single contract, and shall become effective as provided in
Section 16. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 22. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Agreement. Section headings used
herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting this Agreement.
SECTION 23. Jurisdiction; Consent to Service of Process.
(a) Each Pledgor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of
the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and
16
<PAGE>
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Collateral
Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan
Document against any Pledgor or its properties in the courts of
any jurisdiction.
(b) Each Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to
in paragraph (a) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section
16. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 24. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 24.
SECTION 25. Additional Pledgors. Pursuant to Section 5.11
of the Credit Agreement, each Subsidiary Loan Party that was not
in existence or not a Subsidiary Loan Party on the date of the
Credit Agreement is required to enter in this Agreement as a
Subsidiary Pledgor upon becoming a Subsidiary Loan Party. Upon
execution and delivery by the Collateral Agent and a Subsidiary
Loan Party of an instrument in the form of Annex 1, such
Subsidiary Loan Party shall become a Subsidiary Pledgor hereunder
with the same force and effect as if originally named as a
Subsidiary Pledgor herein. The execution and delivery of such
instrument shall not require the consent of any Pledgor hereunder.
The rights and obligations of each Pledgor hereunder shall remain
in full force and effect notwithstanding the addition of any new
Subsidiary Pledgor as a party to this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
PHILLIPS-VAN HEUSEN CORPORATION,
by
Name:
Title:
THE SUBSIDIARY PLEDGORS LISTED ON
SCHEDULE I HERETO,
by
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
18
<PAGE>
Schedule I to the
Pledge Agreement
SUBSIDIARY PLEDGORS
Name Address
<PAGE>
Schedule II to the
Pledge Agreement
CAPITAL STOCK
Number of Registered Number and Percentage
Issuer Certificate Owner Class of Shares of Shares
DEBT SECURITIES
Issuer Principal Date of Note Maturity Date
Amount
<PAGE>
Schedule III to the
Pledge Agreement
JOINT VENTURES
Name Description
<PAGE>
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. dated as of , to the
PLEDGE AGREEMENT dated as of April 22, 1998,
among PHILLIPS-VAN HEUSEN CORPORATION, a
Delaware corporation (the "Borrower"), each
subsidiary of the Borrower listed on Schedule I
hereto (each such subsidiary, individually, a
"Subsidiary Pledgor" and, collectively, the
"Subsidiary Pledgors"; the Borrower and the
Subsidiary Pledgors are referred to collectively
herein as the "Pledgors") and THE CHASE
MANHATTAN BANK, a New York banking corporation
("Chase"), as collateral agent (in such
capacity, the "Collateral Agent") for the
Secured Parties (as defined in the Credit
Agreement referred to below)
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders"),
Chase, as administrative agent for the Lenders and as Collateral
Agent, (b) the Guarantee Agreement dated as of April 22, 1998 (as
amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement") among the Subsidiary Guarantors and the
Collateral Agent and (c) the Indenture dated as of November 1,
1993, by and between the Borrower and The Bank of New York, as
Trustee for the holders (the "Debenture Holders") of the Company's
7-3/4% Debentures Due 2023.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the
Credit Agreement.
C. The Pledgors have entered into the Pledge Agreement in
order to induce the Lenders to make Loans and the Issuing Banks to
issue Letters of Credit. Pursuant to Section 5.11 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence or
not a Subsidiary on the date of the Credit Agreement is required
to enter into the Pledge Agreement as a Subsidiary Pledgor upon
becoming a Subsidiary Loan Party. Section 25 of the Pledge
Agreement provides that such Subsidiary Loan Parties may become
Subsidiary Pledgors under the Pledge Agreement by execution and
delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary Loan Party (the "New Pledgor") is executing
this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Pledgor under the Pledge
Agreement in order to induce the Lenders to make additional Loans
and the Issuing Banks to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit
previously issued.
<PAGE>
Accordingly, the Collateral Agent and the New Pledgor agree
as follows:
SECTION 1. In accordance with Section 25 of the Pledge
Agreement, the New Pledgor by its signature below becomes a
Pledgor under the Pledge Agreement with the same force and effect
as if originally named therein as a Pledgor and the New Pledgor
hereby (a) agrees to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder and (b)
represents and warrants that the representations and warranties
made by it as a Pledgor thereunder are true and correct on and as
of the date hereof. In furtherance of the foregoing, the New
Pledgor, as security for the payment and performance in full of
the Obligations (as defined in the Pledge Agreement), does hereby
create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all the New
Pledgor's right, title and interest in and to the Collateral (as
defined in the Pledge Agreement) of the New Pledgor. Each
reference to a "Subsidiary Pledgor" or a "Pledgor" in the Pledge
Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the
Collateral Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it
and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This
Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Pledgor and the
Collateral Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants
that set forth on Schedule I attached hereto is a true and correct
schedule of all its Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the
Pledge Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, neither party hereto shall be
3
<PAGE>
required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions
contained herein and in the Pledge Agreement shall not in any way
be affected or impaired. The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall
be in writing and given as provided in Section 16 of the Pledge
Agreement. All communications and notices hereunder to the New
Pledgor shall be given to it at the address set forth under its
signature hereto (in care of the Borrower).
SECTION 9. The New Pledgor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Collateral
Agent.
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent
have duly executed this Supplement to the Pledge Agreement as of
the day and year first above written.
[Name of New Pledgor],
by
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
4
<PAGE>
Schedule I to
Supplement No.
to the Pledge Agreement
Pledged Securities of the New Pledgor
CAPITAL STOCK
Issuer Number of Registered Number and Percentage
Certificate Owner Class of Shares of Shares
DEBT SECURITIES
Issuer Principal Date of Note Maturity Date
Amount
<PAGE>
EXHIBIT G
[Form of]
SECURITY AGREEMENT dated as of April 22,
1998, among PHILLIPS-VAN HEUSEN CORPORATION, a
Delaware corporation (the "Borrower"), each
Subsidiary of the Borrower listed on Schedule I
hereto (each such Subsidiary, individually, a
"Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"; the Borrower and the
Subsidiary Guarantors are referred to
collectively herein as the "Grantors") and THE
CHASE MANHATTAN BANK, a New York banking
corporation ("Chase"), as collateral agent (in
such capacity the "Collateral Agent") for the
Secured Parties (as defined below).
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as administrative agent (in such capacity, the
"Administrative Agent"), (b) the Guarantee Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee Agreement"), among the
Subsidiary Guarantors and the Collateral Agent and (c) the
Indenture dated as of November 1, 1993, by and between the
Borrower and The Bank of New York, as Trustee for the holders (the
"Debenture Holders") of the Borrower's 7-3/4% Debentures due 2023.
The Lenders have agreed to make Loans to the Borrower, and
the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement.
Each of the Subsidiary Guarantors has agreed to guarantee, among
other things, all the obligations of the Borrower under the Credit
Agreement. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit are conditioned upon,
among other things, the execution and delivery by the Grantors of
an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower
under the Credit Agreement in respect of any Letter of Credit,
when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), of the
<PAGE>
Borrower to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower
under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all
the covenants, agreements, obligations and liabilities of each
Loan Party under or pursuant to this Agreement and the other Loan
Documents, (d) the due and punctual payment and performance of all
obligations of the Borrower under each Hedging Agreement entered
into with any counterparty that was a Lender or an affiliate
thereof at the time such Hedging Agreement was entered into, (e)
the due and punctual payment and performance of all obligations in
respect of overdrafts and related liabilities owed to the
Administrative Agent or any of its Affiliates and arising from
treasury, depository and cash management services in connection
with any automated clearing house transfers of funds and (f) the
due and punctual payment by the Borrower of all obligations and
liabilities of the Borrower in respect of the Debentures, when and
as due, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise (all the monetary and other
obligations described in the preceding clauses (a) through (f)
being collectively called the "Obligations").
Accordingly, each of the parties hereto hereby agrees as
follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the
context otherwise requires, all capitalized terms used but not
defined herein shall have the meanings set forth in the Credit
Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As
used herein, the following terms shall have the following
meanings:
"Account Debtor" shall mean any person who is or who may
become obligated to any Grantor under, with respect to or on
account of an Account.
"Accounts" shall mean any and all right, title and interest
of any Grantor to payment for goods and services sold or leased,
including any such right evidenced by chattel paper, whether due
or to become due, whether or not it has been earned by
performance, and whether now or hereafter acquired or arising in
the future, including accounts receivable from Affiliates of the
Grantors.
2
<PAGE>
"Accounts Receivable" shall mean all Accounts and all right,
title and interest in any returned goods, together with all
rights, titles, securities and guarantees with respect thereto,
including any rights to stoppage in transit, replevin, reclamation
and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether
now existing or owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b)
Documents, (c) Equipment, (d) General Intangibles, (e) Inventory,
(f) cash and cash accounts, (g) Investment Property and (h)
Proceeds.
"Commodity Account" shall mean an account maintained by a
Commodity Intermediary in which a Commodity Contract is carried
out for a Commodity Customer.
"Commodity Contract" shall mean a commodity futures
contract, an option on a commodity futures contract, a commodity
option or any other contract that, in each case, is (a) traded on
or subject to the rules of a board of trade that has been
designated as a contract market for such a contract pursuant to
the federal commodities laws or (b) traded on a foreign commodity
board of trade, exchange or market, and is carried on the books of
a Commodity Intermediary for a Commodity Customer.
"Commodity Customer" shall mean a person for whom a
Commodity Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is
registered as a futures commission merchant under the federal
commodities laws or (b) a person who in the ordinary course of its
business provides clearance or settlement services for a board of
trade that has been designated as a contract market pursuant to
federal commodities laws.
"Copyright License" shall mean any written agreement, now
or hereafter in effect, granting any right to any third party
under any Copyright now or hereafter owned by any Grantor or which
such Grantor otherwise has the right to license, or granting any
right to such Grantor under any Copyright now or hereafter owned
by any third party, and all rights of such Grantor under any such
agreement.
"Copyrights" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all copyright rights in
any work subject to the copyright laws of the United States or any
other country, whether as author, assignee, transferee or
otherwise; and (b) all registrations and applications for
3
<PAGE>
registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule
II.
"Credit Agreement" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"Depository Agreement" shall mean a Depository Agreement
substantially in the form of Annex 1 hereto or otherwise
reasonably satisfactory to the Collateral Agent among the
Borrower, the Collateral Agent and each bank or financial
institution referenced in Section 5.01.
"Documents" shall mean all instruments, files, records,
ledger sheets and documents covering or relating to any of the
Collateral.
"Entitlement Holder" shall mean a person identified in the
records of a Securities Intermediary as the person having a
Security Entitlement against the Securities Intermediary. If a
person acquires a Security Entitlement by virtue of Section
8-501(b)(2) or (3) of the Uniform Commercial Code, such person is
the Entitlement Holder.
"Equipment" shall mean all equipment, furniture and
furnishings, and all tangible personal property similar to any of
the foregoing, including tools, parts and supplies of every kind
and description, and all improvements, accessions or appurtenances
thereto, that are now or hereafter owned by any Grantor. The term
Equipment shall include Fixtures.
"Financial Asset" shall mean (a) a Security, (b) an
obligation of a person or a share, participation or other interest
in a person or in property or an enterprise of a person, which
is, or is of a type, dealt with in or traded on financial markets,
or which is recognized in any area in which it is issued or dealt
in as a medium for investment or (c) any property that is held by
a Securities Intermediary for another person in a Securities
Account if the Securities Intermediary has expressly agreed with
the other person that the property is to be treated as a Financial
Asset under Article 8 of the Uniform Commercial Code. As the
context requires, the term Financial Asset shall mean either the
interest itself or the means by which a person's claim to it is
evidenced, including a certificated or uncertificated Security, a
certificate representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now
owned or hereafter acquired, of any Grantor that become so related
to particular real estate that an interest in them arises under
any real estate law applicable thereto.
"General Intangibles" shall mean all choses in action and
causes of action and all other assignable intangible personal
property of any Grantor of every kind and nature (other than
4
<PAGE>
Accounts Receivable) now owned or hereafter acquired by any
Grantor, including corporate or other business records,
indemnification claims, contract rights (including rights under
leases, whether entered into as lessor or lessee, Hedging
Agreements, and other agreements), Intellectual Property,
goodwill, registrations and franchises.
"Intellectual Property" shall mean all intellectual and
similar property of any Grantor of every kind and nature now owned
or hereafter acquired by any Grantor, including inventions,
designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information,
know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions,
improvements and accessions to, and books and records describing
or used in connection with, any of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now
owned or hereafter acquired, held for sale or lease, or furnished
or to be furnished by any Grantor under contracts of service, or
consumed in any Grantor's business, including raw materials,
intermediates, work in process, packaging materials, finished
goods, semi-finished inventory, scrap inventory, manufacturing
supplies and spare parts, and all such goods that have been
returned to or repossessed by or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether
certificated or uncertificated), Security Entitlements, Securities
Accounts, Commodity Contracts and Commodity Accounts of any
Grantor, whether now owned or hereafter acquired by any Grantor.
"License" shall mean any Patent License, Trademark License,
Copyright License or other license or sublicense to which any
Grantor is a party, including those listed on Schedule III (other
than those license agreements in existence on the date hereof and
listed on Schedule III and those license agreements entered into
after the date hereof, which by their terms prohibit assignment or
a grant of a security interest by such Grantor as licensee
thereunder).
"Net Proceeds" shall mean, with respect to any event (a) the
cash proceeds received in respect of such event including (i) any
cash received in respect of any non-cash proceeds, but only as and
when received, (ii) in the case of a casualty, insurance proceeds,
and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the
Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event, (ii) in the case of a
sale or other disposition of an asset (including pursuant to a
casualty or condemnation), the amount of all payments required to
be made by the Borrower and the Subsidiaries as a result of such
event to repay Indebtedness (other than Loans) secured by such
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asset or otherwise subject to mandatory prepayment as a result of
such event, and (iii) the amount of all taxes paid (or reasonably
estimated to be payable) the Borrower and the Subsidiaries, and
the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated
to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower).
"Obligations" shall have the meaning assigned to such term
in the preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to
make, use or sell any invention on which a Patent, now or
hereafter owned by any Grantor or which any Grantor otherwise has
the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent,
now or hereafter owned by any third party, is in existence, and
all rights of any Grantor under any such agreement.
"Patents" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all letters patent of the
United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the
United States or any other country, including registrations,
recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country,
including those listed on Schedule IV; and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed
therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate
substantially in the form of Annex 2 hereto, completed and
supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer and the chief
legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the
sale, exchange, license, lease or other disposition of any asset
or property that constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment
received from any insurer or other person or entity as a result of
the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which
constitutes Collateral, and shall include (a) any claim of any
Grantor against any third party for (and the right to sue and
recover for and the rights to damages or profits due or accrued
arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor,
or licensed under a Patent License, (ii) past, present or future
infringement or dilution of any Trademark now or hereafter owned
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by any Grantor or licensed under a Trademark License or injury to
the goodwill associated with or symbolized by any Trademark now or
hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any
Grantor or licensed under a Copyright License and (b) any and all
other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the
Administrative Agent, (c) the Collateral Agent, (d) the Issuing
Banks, (e) each counterparty to a Hedging Agreement entered into
with the Borrower if such counterparty was a Lender (or an
Affiliate thereof) at the time the Hedging Agreement was entered
into, (f) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Loan Document, (g) the
Debenture Holders and (h) the successors and assigns of each of
the foregoing.
"Securities" shall mean any obligations of an issuer or any
shares, participations or other interests in an issuer or in
property or an enterprise of an issuer which (a) are represented
by a certificate representing a security in bearer or registered
form, or the transfer of which may be registered upon books
maintained for that purpose by or on behalf of the issuer, (b) are
one of a class or series or by its terms is divisible into a class
or series of shares, participations, interests or obligations and
(c)(i) are, or are of a type, dealt with or traded on securities
exchanges or securities markets or (ii) are a medium for
investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a
Financial Asset is or may be credited in accordance with an
agreement under which the person maintaining the account
undertakes to treat the person for whom the account is maintained
as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property
interests of an Entitlement Holder with respect to a Financial
Asset.
"Security Interest" shall have the meaning assigned to such
term in Section 2.01.
"Securities Intermediary" shall mean (a) a clearing
corporation or (b) a person, including a bank or broker, that in
the ordinary course of its business maintains securities accounts
for others and is acting in that capacity.
"Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use
any Trademark now or hereafter owned by any Grantor or which any
Grantor otherwise has the right to license, or granting to any
Grantor any right to use any Trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or
hereafter acquired by any Grantor: (a) all trademarks and service
marks, and the good will appurtenant to each, trade names,
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corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including
registrations and registration applications in the United States
Patent and Trademark Office, any State of the United States or any
similar offices in any other country or any political subdivision
thereof, and all extensions or renewals thereof, including those
listed on Schedule V; (b) all goodwill associated therewith or
symbolized thereby; and (c) all other assets, rights and interests
that uniquely reflect or embody such goodwill.
ARTICLE II
Security Interests
SECTION 2.01. Security Interest. As security for the
payment or performance, as the case may be, in full of the
Obligations, each Grantor hereby bargains, sells, conveys,
assigns, sets over, mortgages, pledges, hypothecates and transfers
to the Collateral Agent and its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent and its successors and assigns, for the ratable
benefit of the Secured Parties, a first-priority (subject to
Section 3.03 hereof) security interest in, all of such Grantor's
right, title and interest in, to and under the Collateral (the
"Security Interest"). Without limiting the foregoing, the
Collateral Agent is hereby authorized to file one or more
financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office
or any similar office in any State of the United States or in any
other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security
Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way
alter or modify, any obligation or liability of any Grantor with
respect to or arising out of the Collateral.
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ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to
the Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good
and valid rights in and title to the Collateral with respect to
which it has purported to grant a Security Interest hereunder and
has full power and authority to grant to the Collateral Agent the
Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with
the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been
obtained and is in full force and effect.
SECTION 3.02. Filings. (a) The Perfection Certificate has
been duly prepared, completed and executed and the information set
forth therein is correct and complete. Fully executed Uniform
Commercial Code financing statements (including fixture filings,
as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been
delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings, recordings and
registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and
Copyrights) that are necessary to publish notice of and protect
the validity of and to establish a legal, valid and perfected
first-priority security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all
Collateral in which a security interest may be perfected by
filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation
statements.
(b) Each Grantor represents and warrants that fully executed
security agreements in the form hereof and containing a
description of all Collateral consisting of Intellectual Property
with respect to United States Patents and United States registered
Trademarks (and Trademarks for which United States registration
applications are pending) and United States registered Copyrights,
if any, have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. Sec. 261, 15 U.S.C.
Sec. 1060 or 17 U.S.C. Sec. 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction, to protect the validity of
and to establish a legal, valid and perfected first-priority
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security interest in favor of the Collateral Agent (for the
ratable benefit of the Secured Parties) in respect of all
Collateral consisting of Patents, Trademarks and Copyrights to the
extent registered in the United States Copyright Office in which a
security interest may be perfected by filing, recording or
registration in the United States (or any political subdivision
thereof) and its territories and possessions, or in any other
necessary jurisdiction, and no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration
is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of
Patents, Trademarks and such Copyrights (or registration or
application for registration thereof) acquired or developed after
the date hereof). Each Grantor has advised the Collateral Agent
that none of its Copyrights have been so registered with the
United States Copyright Office.
SECTION 3.03. Validity of Security Interest. The Security
Interest constitutes (a) a legal and valid security interest in
all the Collateral securing the payment and performance of the
Obligations, (b) subject to the filings described in Section 3.02
above, a perfected security interest in all Collateral in which a
security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the
United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial
Code or other applicable law in such jurisdictions and (c) a
security interest that shall be perfected in all Collateral in
which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any
other Lien on any of the Collateral, other than Liens expressly
permitted to be prior to the Security Interest pursuant to Section
6.02 of the Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is
owned by the Grantors free and clear of any Lien, except for Liens
expressly permitted pursuant to Section 6.02 of the Credit
Agreement. The Grantor has not filed or consented to the filing
of (a) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument
covering any Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (c) any
assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral
with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in
each case, for Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement.
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ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral;
Records; Place of Business. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its
corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties,
(ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or
facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in its
identity or corporate structure or (iv) in its Federal Taxpayer
Identification Number. Each Grantor agrees not to effect or
permit any change referred to in the preceding sentence unless
prior written notice has been delivered to the Collateral Agent.
Each Grantor agrees to take all actions reasonably requested by
the Collateral Agent in order to ensure that all filings are made
in a timely manner under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and
perfected first-priority security interest in all the Collateral.
Each Grantor agrees promptly to notify the Collateral Agent if any
material portion of the Collateral owned or held by such Grantor
is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the
Collateral owned by it as is consistent with its current practices
and in accordance with such prudent and standard practices used in
industries that are the same as or similar to those in which such
Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received
with respect to any part of the Collateral, and, at such time or
times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified
schedule or schedules in form and detail reasonably satisfactory
to the Collateral Agent showing the identity, amount and location
of any and all Collateral.
SECTION 4.02. Periodic Certification. Each year, at the
time of delivery of annual financial statements with respect to
the preceding fiscal year pursuant to Section 5.01 of the Credit
Agreement, the Borrower shall deliver to the Collateral Agent a
certificate executed by a Financial Officer of the Borrower (a)
setting forth the information required pursuant to Section 2 of
the Perfection Certificate or confirming that there has been no
change in such information since the date of such certificate or
the date of the most recent certificate delivered pursuant to this
Section 4.02 and (b) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or
other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a
description of the Collateral that have been reasonably requested
by the Collateral Agent have been duly executed and delivered to
the Collateral Agent for filing of record in each governmental,
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municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) above to the extent necessary to
protect and perfect the Security Interest for a period of not less
than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed
within such period). Each certificate delivered pursuant to this
Section 4.02 shall identify in the format of Schedule II, III, IV
or V, as applicable, all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on such
Schedules or previously so identified to the Collateral Agent.
SECTION 4.03. Protection of Security. Each Grantor shall,
at its own cost and expense, take any and all actions reasonably
necessary to defend title to the Collateral against all persons
and to defend the Security Interest of the Collateral Agent in the
Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02 of the Credit Agreement.
SECTION 4.04. Further Assurances. Each Grantor agrees, at
its own expense, to execute, acknowledge, deliver and cause to be
duly filed all such further instruments and documents and take all
such actions as the Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect
the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection
with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection
herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced
by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the
Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent (except for such notes or instruments the
aggregate amount of which at any time shall not exceed $250,000).
Without limiting the generality of the foregoing, each
Grantor hereby authorizes the Collateral Agent, with prompt notice
thereof to the Grantors, to supplement this Agreement by
supplementing Schedule II, III, IV or V hereto or adding
additional schedules hereto to specifically identify any asset or
item that may constitute Copyrights with respect to which
registrations have been made by a Grantor in the United States
Copyright Office, Licenses, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within
30 days after it has been notified by the Collateral Agent of the
specific identification of such Collateral, to advise the
Collateral Agent in writing of any errors in such supplement or
inaccuracy of the representations and warranties made by such
Grantor hereunder with respect to such Collateral. Each Grantor
agrees that it will use its best efforts to take such action as
shall be necessary in order that all representations and
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warranties hereunder shall be true and correct with respect to
such Collateral (after giving effect to the correction of any such
errors) within such 30 days after the date it has been notified by
the Collateral Agent of the specific identification of such
Collateral. No Default or Event of Default shall be deemed to
arise as the result of any such inaccuracy during such 30 day
period.
SECTION 4.05. Inspection and Verification. The Collateral
Agent and such persons as the Collateral Agent may reasonably
designate shall have the right, at the Grantors' own cost and
expense, (during normal business hours on not less than two (2)
business days notice, unless an Event of Default has occurred and
is continuing, in which case, no such notice shall be required) to
inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which
any of the Collateral is located, to discuss the Grantors' affairs
with the officers of the Grantors and their independent
accountants and to verify under reasonable procedures the
validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Collateral, including, in
the case of Accounts or Collateral in the possession of any third
person, by contacting Account Debtors or the third person
possessing such Collateral for the purpose of making such a
verification. The Collateral Agent shall have the absolute right
to share any information it gains from such inspection or
verification with any Secured Party, its advisors, authorized
agents and representatives, but not with any other Person.
SECTION 4.06. Taxes; Encumbrances. At its option, the
Collateral Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted
pursuant to Section 6.02 of the Credit Agreement, and may pay for
the maintenance and preservation of the Collateral to the extent
any Grantor fails to do so as required by the Credit Agreement or
this Agreement, and each Grantor jointly and severally agrees to
reimburse the Collateral Agent on demand for any payment made or
any expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, however, that nothing in this
Section 4.06 shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent
or any other Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
SECTION 4.07. Assignment of Security Interest. If at any
time any Grantor shall take a security interest in any property of
an Account Debtor or any other person to secure payment and
performance of an Account, such Grantor shall promptly assign such
security interest to the Collateral Agent. Such assignment need
not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and
transferees from the Account Debtor or other person granting the
security interest.
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SECTION 4.08. Continuing Obligations of the Grantors. Each
Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it
under each contract, agreement or instrument relating to the
Collateral, all in accordance with the terms and conditions
thereof, and the Grantors jointly and severally agree to indemnify
and hold harmless the Collateral Agent and the other Secured
Parties from and against any and all liability for such
performance.
SECTION 4.09. Use and Disposition of Collateral. None of
the Grantors shall make or permit to be made an assignment, pledge
or hypothecation of the Collateral or shall grant any other Lien
in respect of the Collateral, except as expressly permitted by
Section 6.02 of the Credit Agreement. None of the Grantors shall
make or permit to be made any transfer of the Collateral and each
Grantor shall remain at all times in possession of the Collateral
owned by it, except that (a) Inventory may be sold in the ordinary
course of business and (b) unless and until the Collateral Agent
shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may use
and dispose of the Collateral in any lawful manner not
inconsistent with the provisions of this Agreement, the Credit
Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not
permit any Inventory (other than Inventory which in the aggregate
does not exceed $[7,500,000] in wholesale value) to be in the
possession or control of any warehouseman, bailee, agent or
processor at any time unless such warehouseman, bailee, agent or
processor shall have been notified of the Security Interest and
shall have agreed in writing to hold the Inventory subject to the
Security Interest and the instructions of the Collateral Agent and
to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise.
SECTION 4.10. Limitation on Modification of Accounts. None
of the Grantors will, without the prior written consent of the
Collateral Agent, grant any extension of the time of payment of
any of the Accounts Receivable, compromise, compound or settle the
same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any
credit or discount whatsoever thereon, other than extensions,
credits, discounts, compromises or settlements granted or made in
the ordinary course of business and consistent with its current
practices and in accordance with such prudent and standard
practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
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SECTION 4.11. Insurance. (a) The Grantors, at their own
expense, shall maintain or cause to be maintained and shall cause
each of the other Subsidiaries to maintain, with financially sound
and reputable insurance companies:
(i) fire and extended coverage insurance, on a
replacement cost basis, with respect to all personal
property and improvements to real property, in such amounts
as are customarily maintained by companies in the same or
similar business operating in the same or similar locations;
(ii) commercial general liability insurance against
claims for bodily injury, death or property damage occurring
upon, about or in connection with the use of any properties
owned, occupied or controlled by it, providing coverage on
an occurrence basis with a combined single limit of not less
than $2,000,000 and including the broad form CGL
endorsement;
(iii) business interruption insurance, insuring
against loss of gross earnings for a period of not less than
12 months arising from any risks or occurrences required to
be covered by insurance pursuant to clause (i) above; and
(iv) such other insurance as may be required by law.
Deductibles or self-insured retention shall be in amounts carried
by the Borrower in the ordinary course of business consistent with
its present practice and prudent business practice.
(b) Fire and extended coverage policies (and any policies
required to be maintained pursuant to paragraph (c) below)
maintained with respect to any Collateral shall be endorsed or
otherwise amended to include (i) a non-contributing mortgage
clause (regarding improvements to real property) and lenders' loss
payable clause (regarding personal property), in each case in
favor of the Administrative Agent and providing for losses
thereunder to be payable to the Administrative Agent or its
designee, (ii) a provision to the effect that neither the
Borrower, the Administrative Agent nor any other party shall be a
coinsurer and (iii) such other provisions as the Administrative
Agent may reasonably require from time to time to protect the
interests of the Lenders. Commercial general liability policies
shall be endorsed to name the Administrative Agent as an
additional insured. Business interruption policies shall name the
Administrative Agent as loss payee. Each such policy referred to
in this paragraph also shall provide that it shall not be
canceled, materially modified or not renewed (i) by reason of
nonpayment of premium except upon not less than 10 days' prior
written notice thereof by the insurer to the Administrative Agent
(giving the Administrative Agent the right to cure defaults in the
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payment of premiums) or (ii) for any other reason except upon not
less than 30 days' prior written notice thereof by the insurer to
the Administrative Agent. The Borrower shall deliver to the
Administrative Agent, prior to the cancelation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or
replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent) together with
evidence satisfactory to the Administrative Agent of payment of
the premium therefor.
(c) If at any time the area in which any Mortgaged Property
is located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management
Agency (or any successor agency), the Borrower shall obtain flood
insurance in such total amount as the Administrative Agent or the
Required Lenders may from time to time reasonably require, and
otherwise comply with the National Flood Insurance Program as set
forth in the Flood Disaster Protection Act of 1973, as amended
from time to time, or (ii) a "Zone 1" area, the Borrower shall
obtain earthquake insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time
require.
(d) Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true
and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default, of making, settling and
adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at
any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in
whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of the Grantors
hereunder or any Event of Default, in its sole discretion, obtain
and maintain such policies of insurance and pay such premium and
take any other actions with respect thereto as the Collateral
Agent deems advisable. All sums disbursed by the Collateral Agent
in connection with this Section 4.11(d), including reasonable
attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured
hereby.
SECTION 4.12. Casualty and Condemnation. (a) The Borrower
will furnish to the Administrative Agent and the Lenders prompt
written notice of any casualty or other insured damage in excess
of $100,000 to any portion of any Collateral or the commencement
of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance
proceeds, condemnation award or otherwise), the Administrative
Agent is authorized to collect such Net Proceeds and, if received
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by the Borrower or any Subsidiary, such Net Proceeds shall be paid
over to the Administrative Agent; provided that (i) if the
aggregate Net Proceeds in respect of such event (other than
proceeds of business interruption insurance) are less than
$5,000,000, such Net Proceeds shall be promptly paid over to the
Borrower unless a Default has occurred and is continuing, and (ii)
all proceeds of business interruption insurance shall be promptly
paid over to the Borrower unless a Default has occurred and is
continuing. All such Net Proceeds retained by or paid over to the
Administrative Agent shall be held by the Administrative Agent and
released from time to time to pay the costs of repairing,
restoring or replacing the affected property in accordance with
the terms of this Agreement, subject to the provisions of this
Agreement regarding application of such Net Proceeds during a
Default. Upon written request from the Borrower and at the
Borrower's risk and expense, such Net Proceeds shall be invested
pursuant to reasonable instructions of the Borrower, provided that
such investments are permitted under the Credit Agreement. At any
time upon written request from the Borrower to the Administrative
Agent, any such Net Proceeds retained by or paid over to the
Administrative Agent may be applied, together with any amounts
earned through the investments of Net Proceeds pursuant to Section
4.12(b) hereof, to prepay Borrowings in accordance with the Credit
Agreement.
(c) If any Net Proceeds retained by or paid over to the
Administrative Agent as provided above continue to be held by the
Administrative Agent on the date that is 360 days after the
occurrence of the event resulting in such Net Proceeds, then such
Net Proceeds shall be applied, together with any amounts earned
through the investments of Net Proceeds pursuant to Section
4.12(b) hereof, to prepay Borrowings in accordance with the Credit
Agreement.
SECTION 4.13. Legend. If an Event of Default has occurred
and is continuing, each Grantor shall legend, as may be reasonably
requested by the Collateral Agent and in form and manner
satisfactory to the Collateral Agent, its Accounts Receivable and
its books, records and documents evidencing or pertaining thereto
with an appropriate reference to the fact that such Accounts
Receivable have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a
first-priority security interest therein.
SECTION 4.14. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not,
nor will it permit any of its licensees to, do any act, or omit to
do any act, whereby any Patent that is material to the conduct of
such Grantor's business may become invalidated or dedicated to the
public, and agrees that consistent with its present practice and
prudent business practice it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary
and sufficient to establish and preserve its maximum rights under
applicable patent laws.
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(b) Each Grantor (either itself or through its licensees or
its sublicensees) will, for each Trademark material to the conduct
of such Grantor's business, (i) maintain such Trademark in full
force free from any claim of abandonment or invalidity for
non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with
notice of Federal or foreign registration to the extent necessary
and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the
use of such Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with
appropriate copyright notice as necessary and sufficient to
establish and preserve its maximum rights under applicable
copyright laws.
(d) Each Grantor shall notify the Collateral Agent
immediately if it knows or has reason to know that any Patent,
Trademark or Copyright material to the conduct of its business may
become abandoned, lost or dedicated to the public, or of any
adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any country)
regarding such Grantor's ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep
and maintain the same.
(e) In no event shall any Grantor, either itself or through
any agent, employee, licensee or designee, file an application for
any Patent, Trademark or Copyright (or for the registration of any
Trademark or Copyright) with the United States Patent and
Trademark Office, United States Copyright Office or any office or
agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it
promptly informs the Collateral Agent and, upon request of the
Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may
request to evidence the Collateral Agent's Security Interest in
such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute
and file such writings for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed; such power,
being coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United
States Patent and Trademark Office, United States Copyright Office
or any office or agency in any political subdivision of the United
States or in any other country or any political subdivision
thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent
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and each registration of the Trademarks and Copyrights that is
material to the conduct of any Grantor's business, including
timely filings of applications for renewal, affidavits of use,
affidavits of incontestability and payment of maintenance fees,
and, if consistent with good business judgment, to initiate
opposition, interference and cancelation proceedings against third
parties.
(g) In the event that any Grantor has reason to believe
that any Collateral consisting of a Patent, Trademark or Copyright
material to the conduct of any Grantor's business has been or is
about to be infringed, misappropriated or diluted by a third
party, such Grantor promptly shall notify the Collateral Agent and
shall, if consistent with good business judgment, promptly sue for
infringement, misappropriation or dilution and to recover any and
all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the
circumstances to protect such Collateral.
(h) Upon and during the continuance of an Event of Default,
each Grantor shall use its best efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License,
Patent License or Trademark License to effect the assignment of
all of such Grantor's right, title and interest thereunder to the
Collateral Agent or its designee.
ARTICLE V
Collections
SECTION 5.01. Depositary Agreement. No later than 60 days
after the Effective Date, each Grantor shall have entered into a
Depository Agreement with each bank or financial institution with
which it maintains a deposit account or other similar account (a
"Deposit Account").
SECTION 5.02. Lockbox System. Upon the occurrence of an
Event of Default, the Grantors shall, at the option of the
Collateral Agent or the Required Lenders, establish a system of
lockboxes and related deposit accounts satisfactory in all
respects to the Collateral Agent.
SECTION 5.03. Power of Attorney. Each Grantor irrevocably
makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and
in such capacity the Collateral Agent shall have the right, with
power of substitution for each Grantor and in each Grantor's name
or otherwise, for the use and benefit of the Collateral Agent and
the Secured Parties, upon the occurrence and during the
continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the
Collateral or any part thereof; (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of
all or any of the Collateral; (c) to sign the name of any Grantor
on any invoice or bill of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to
any Account Debtor; (e) to commence and prosecute any and all
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or
any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend
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any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Collateral Agent;
and (h) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as
though the Collateral Agent were the absolute owner of the
Collateral for all purposes; provided, however, that nothing
herein contained shall be construed as requiring or obligating the
Collateral Agent or any Secured Party to make any commitment or to
make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent or any Secured Party, or to
present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby,
and no action taken or omitted to be taken by the Collateral Agent
or any Secured Party with respect to the Collateral or any part
thereof shall give rise to any defense, counterclaim or offset in
favor of any Grantor or to any claim or action against the
Collateral Agent or any Secured Party. It is understood and
agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth
above is coupled with an interest and is irrevocable. The
provisions of this Section shall in no event relieve any Grantor
of any of its obligations hereunder or under any other Loan
Document with respect to the Collateral or any part thereof or
impose any obligation on the Collateral Agent or any Secured Party
to proceed in any particular manner with respect to the Collateral
or any part thereof, or in any way limit the exercise by the
Collateral Agent or any Secured Party of any other or further
right which it may have on the date of this Agreement or
hereafter, whether hereunder, under any other Loan Document, by
law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence
and during the continuance of an Event of Default, each Grantor
agrees to deliver each item of Collateral to the Collateral Agent
on demand, and it is agreed that the Collateral Agent shall have
the right to take any of or all the following actions at the same
or different times: (a) with respect to any Collateral consisting
of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any
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of or all such Collateral by the applicable Grantors to the
Collateral Agent, or to license or sublicense, whether general,
special or otherwise, and whether on an exclusive or non-exclusive
basis, any such Collateral throughout the world on such terms and
conditions and in such manner as the Collateral Agent shall
determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and
(b) with or without legal process and with or without prior notice
or demand for performance, to take possession of the Collateral
and without liability to Grantor for trespass to enter any
premises where the Collateral may be located for the purpose of
taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting
the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of
all or any part of the Collateral, at public or private sale or at
any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem
appropriate. The Collateral Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent
and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so
sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part
of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter
enacted.
The Collateral Agent shall give the Grantors 10 days'
written notice (which each Grantor agrees is reasonable notice
within the meaning of Section 9-504(3) of the Uniform Commercial
Code as in effect in the State of New York or its equivalent in
other jurisdictions) of the Collateral Agent's intention to make
any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the
case of a sale at a broker's board or on a securities exchange,
shall state the board or exchange at which such sale is to be made
and the day on which the Collateral, or portion thereof, will
first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent
may fix and state in the notice (if any) of such sale. At any
such sale, the Collateral, or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make
any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice
or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral
is made on credit or for future delivery, the Collateral so sold
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may be retained by the Collateral Agent until the sale price is
paid by the purchaser or purchasers thereof, but the Collateral
Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold
again upon like notice. At any public (or, to the extent
permitted by law, private) sale made pursuant to this Section, any
Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the
Collateral or any part thereof offered for sale and may make
payment on account thereof by using any claim then due and payable
to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with
the terms of sale, hold, retain and dispose of such property
without further accountability to any Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or
any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of
the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall
have entered into such an agreement all Events of Default shall
have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon
it, the Collateral Agent may proceed by a suit or suits at law or
in equity to foreclose this Agreement and to sell the Collateral
or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral
Agent shall apply the proceeds of any collection or sale of the
Collateral, as well as any Collateral consisting of cash, as
follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent or the Collateral Agent (in its capacity
as such hereunder or under any other Loan Document) in connection
with such collection or sale or otherwise in connection with this
Agreement or any of the Obligations, including all court costs and
the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Collateral Agent hereunder
or under any other Loan Document on behalf of any Grantor and any
other costs or expenses incurred in connection with the exercise
of any right or remedy hereunder or under any other Loan Document;
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SECOND, to the payment in full of the Obligations (the
amounts so applied to be distributed among the Secured Parties pro
rata in accordance with the amounts of the Obligations owed to
them on the date of any such distribution); and
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time
of application of any such proceeds, moneys or balances in
accordance with this Agreement. Upon any sale of the Collateral
by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of
the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase
money paid over to the Collateral Agent or such officer or be
answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual
Property. For the purpose of enabling the Collateral Agent to
exercise rights and remedies under this Article at such time as
the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use,
license or sub-license any of the Collateral consisting of
Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in
such license (a) reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof
and (b) a provision that the licensee shall apply substantially
the same quality control standards as were utilized by Borrower
prior to the date of the license. The use of such license by the
Collateral Agent shall be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation
of an Event of Default, provided that any license, sub-license or
other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.
ARTICLE VII
Intercreditor Agreements; Collateral Agent
SECTION 7.01. Effect of Acceptance of Benefits. By
acceptance of the benefits of this Agreement, each of the Secured
Parties shall be deemed to have agreed to be bound by the terms
hereof. The provisions of this Article VII are, and are intended,
solely to establish certain rights as between the Secured Parties
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and shall not create, and shall not be construed as creating, any
rights enforceable by any Grantor, any Subsidiary or any Affiliate
of any Grantor (regardless of whether such Grantor, Subsidiary or
Affiliate is a Secured Party).
SECTION 7.02. Appointment of Collateral Agent. By
acceptance of the benefits of this Agreement, each of the Secured
Parties shall be deemed irrevocably (a) to consent to the
appointment of the Collateral Agent as its agent hereunder, (b) to
confirm that the Collateral Agent shall have the authority to act
as the exclusive agent of such Secured Party for enforcement of
any provisions of this Agreement against any Grantor or the
exercise of remedies hereunder and (c) to agree that such Secured
Party shall not take any action to enforce any provisions of this
Agreement against any Grantor or to exercise any remedy hereunder.
SECTION 7.03. Liability of Collateral Agent. The
Collateral Agent may act or refrain from acting hereunder, and
shall not incur any liability to the Secured Parties for acting or
refraining from acting hereunder, in accordance with any such
consent, direction or request of the Required Lenders as shall be
required or permitted under the Credit Agreement. The Debenture
Holders as Secured Parties shall not be entitled to, and shall
not, (a) direct the actions of the Collateral Agent hereunder, (b)
take any action, or commence any legal proceeding seeking, to
require, compel or cause the Collateral Agent to enforce any
provisions of this Agreement against any Grantor or to exercise
any remedy hereunder, (c) take any action, or commence any legal
proceeding seeking, to prevent or enjoin the Collateral Agent
from taking any action (including, without limitation, the
enforcement of any provisions of this Agreement against any
Grantor, the exercise of any remedy hereunder, the release of any
Collateral hereunder or the consent to any amendment or
modification of this Agreement or the grant of any waiver
hereunder), or refraining from taking any such action, in
accordance with this Agreement or (d) take any action, or commence
any legal proceeding seeking, to delay, hinder or otherwise impair
the Collateral Agent in taking any such action in accordance with
this Agreement. By acceptance of the benefits under this
Agreement, the Debenture Holders as Secured Parties will be deemed
to have acknowledged and agreed that the provisions of the
preceding sentence are intended to induce the Lenders to permit
the Debenture Holders to be Secured Parties under this Agreement
and are being relied upon by the Lenders as consideration
therefor.
SECTION 7.04. Duties of Collateral Agent. THE COLLATERAL
AGENT HAS CONSENTED TO SERVE AS COLLATERAL AGENT HEREUNDER ON THE
EXPRESS UNDERSTANDING, AND THE DEBENTURE HOLDERS AS SECURED
PARTIES, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT, SHALL BE
DEEMED TO HAVE AGREED, THAT THE COLLATERAL AGENT SHALL HAVE NO
DUTY AND SHALL OWE NO OBLIGATION OR RESPONSIBILITY (FIDUCIARY OR
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OTHERWISE) TO THE DEBENTURE HOLDERS AS SECURED PARTIES, OTHER THAN
THE DUTY TO PERFORM ITS EXPRESS OBLIGATIONS UNDER THIS AGREEMENT
IN ACCORDANCE WITH THEIR TERMS, SUBJECT IN ALL EVENTS TO THE
PROVISIONS OF SECTIONS 6.02 AND 8.05 AND THE OTHER PROVISIONS OF
THIS AGREEMENT LIMITING THE RESPONSIBILITY OR LIABILITY OF THE
COLLATERAL AGENT HEREUNDER.
SECTION 7.05. Indemnification of Collateral Agent. Each
Secured Party shall, ratably in accordance with the amount of
Secured Obligations owed to it, indemnify the Collateral Agent (to
the extent it shall not have been reimbursed by the Borrower)
against any expense or liability that the Collateral Agent would
be entitled to recover from the Borrower pursuant to Section 8.05.
Any amount so owed by a Secured Party can be withheld by the
Collateral Agent from any amount owed to such Secured Party.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Waivers; Amendment. (a) No failure or delay
of the Collateral Agent in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent
and of the other Secured Parties hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights
or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or consent to any departure by any
Grantors therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Grantors
in any case shall entitle such Grantors to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into among the Collateral Agent and the Grantor or
Grantors with respect to which such waiver, amendment or
modification is to apply, subject to any consent required in
accordance with Section 9.02 of the Credit Agreement.
SECTION 8.02. Security Interest Absolute. All rights of
the Collateral Agent hereunder, the grant of a security interest
in the Collateral and all obligations of each Grantor hereunder
shall be absolute and unconditional irrespective of (a) any lack
of validity or enforceability of the Credit Agreement, any other
Loan Document, any
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agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or
instrument relating to any of the foregoing, (c) any exchange,
release or nonperfection of any other collateral, or any release
or amendment or waiver of or consent to or departure from any
guaranty, for all or any of the Obligations or (d) any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, any Grantor in respect of the Obligations
or in respect of this Agreement (other than the indefeasible
payment in full of all the Obligations).
SECTION 8.03. Notices. All communications and notices
hereunder shall be in writing and given as provided in Section
9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Guarantor shall be given to it at the
address for notices set forth on Schedule I (in care of the
Borrower). All communications and notices hereunder to the
Debenture Holders shall be given to such Debenture Holders (c/o
the Trustee) at: The Bank of New York, 101 Barclay Street, 21st
Floor West, New York, NY 10286, Attention: Corporate Trust
Administration.
SECTION 8.04. Further Assurances. Each Grantor agrees to
do such further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements and instruments,
as the Collateral Agent may at any time reasonably request in
connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or
in order better to assure and confirm unto the Collateral Agent
its rights and remedies hereunder.
SECTION 8.05. Reimbursement of Collateral Agent; Indemnity.
(a) Each Grantor agrees to pay upon demand to the Collateral
Agent the amount of any and all reasonable expenses, including the
reasonable fees, other charges and disbursements of its counsel
and of any experts or agents, that the Collateral Agent may incur
in connection with (i) the administration of this Agreement, (ii)
the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of the Collateral
Agent hereunder or (iv) the failure by such Grantor to perform or
observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, each Grantor agrees to indemnify
the Collateral Agent and the other Indemnitees (as defined in
Section 9.03 of the Credit Agreement) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel
fees, other charges and disbursements, incurred by or asserted
against any
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Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any
other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby or
(ii) any claim, litigation, investigation or proceeding relating
to any of the foregoing, whether or not any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee or any
Affiliate of such Indemnitee (or of any officer, director,
employee, advisor or agent of such Indemnitee or any of such
Indemnitee's Affiliates).
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security
Documents. The provisions of this Section 8.05 shall remain
operative and in full force and effect regardless of the
termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Collateral Agent or any
other Secured Party. All amounts due under this Section 8.05
shall be payable on written demand therefor and shall bear
interest at the rate specified in Section 2.12 of the Credit
Agreement.
SECTION 8.06. Binding Effect; Several Agreement;
Assignments. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the
successors and assigns of such party, and all covenants, promises
and agreements by or on behalf of any Grantor that are contained
in this Agreement shall bind and inure to the benefit of its
successors and assigns. This Agreement shall become effective as
to any Grantor when a counterpart hereof executed on behalf of
such Grantor shall have been delivered to the Collateral Agent and
a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such
Grantor and the Collateral Agent and their respective successors
and assigns, and shall inure to the benefit of such Grantor, the
Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Grantor shall
have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment
shall be void), except as expressly contemplated by this Agreement
or the other Loan Documents. This Agreement shall be construed as
a separate agreement with respect to each Grantor and may be
amended, modified, supplemented, waived or released with respect
to any Grantor without the approval of any other Grantor and
without affecting the obligations of any other Grantor hereunder.
27
<PAGE>
SECTION 8.07. Survival of Agreement; Severability. (a)
All covenants, agreements, representations and warranties made by
each Grantor herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have
been relied upon by the Collateral Agent and the other Secured
Parties and shall survive the making by the Lenders of the Loans
and the issuance of the Letters of Credit by the Issuing Banks,
regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or the LC Exposure does not
equal zero and as long as the Commitments have not been
terminated.
(b) In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The
parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 8.08. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 8.09. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute
a single contract, and shall become effective as provided in
Section 8.06. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 8.10. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Agreement. Section headings used
herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting this Agreement.
SECTION 8.11. Jurisdiction; Consent to Service of Process.
(a) Each Grantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of
the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern
28
<PAGE>
District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Collateral
Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan
Document against any Grantor or its properties in the courts of
any jurisdiction.
(b) Each Grantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to
in paragraph (a) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section
8.03. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 8.12. Waiver of Jury Trial. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.
SECTION 8.13. Additional Grantors. Pursuant to Section
5.11 of the Credit Agreement, each Subsidiary Loan Party that was
not in existence or not a Subsidiary Loan Party on the date of the
29
<PAGE>
Credit Agreement is required to enter in this Agreement as a
Subsidiary Guarantor upon becoming a Subsidiary Loan Party. Upon
execution and delivery by the Collateral Agent and a Subsidiary
Loan Party of an instrument in the form of Annex 3, such
Subsidiary Loan Party shall become a Subsidiary Guarantor
hereunder with the same force and effect as if originally named as
a Subsidiary Guarantor herein. The execution and delivery of such
instrument shall not require the consent of any Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain
in full force and effect notwithstanding the addition of any new
Subsidiary Guarantor as a party to this Agreement.
SECTION 8.14. Termination. The Security Interest shall
terminate when (i) all the Obligations have been indefeasibly paid
in full in cash, the Lenders have no further commitment to lend,
the Exposure has been reduced to zero and the Issuing Banks have
no further commitment to issue Letters of Credit under the Credit
Agreement, or (ii) upon the earlier occurrence of the conditions
for release and termination set forth in Section 9.14 of the
Credit Agreement, at which time the Collateral Agent shall execute
and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents that
the Grantors shall reasonably request to evidence termination of
the Security Interest as well as termination of the powers of
attorney herein set forth and assignment by the Collateral Agent
of its right, title and interest in any licenses granted pursuant
to Section 6.03. Any execution and delivery of termination
statements or documents pursuant to this Section 8.14 shall be
without recourse to or warranty by the Collateral Agent. Upon any
sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement to any person that is not a
Grantor, or, upon the effectiveness of any written consent to the
release of the security interest granted hereby in any Collateral
pursuant to Section 9.02(b) of the Credit Agreement, the security
interest in such Collateral shall be automatically released. A
Grantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such
Grantor shall be automatically released in the event that all the
capital stock of such Grantor shall be sold, transferred or
otherwise disposed of to a person that is not an Affiliate of the
Borrower in accordance with the terms of the Credit Agreement,
provided that the Required Lenders shall have consented to such
sale, transfer or other disposition (to the extent required by the
Credit Agreement) and the terms of such consent did not provide
otherwise.
30
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers or
agents, all as of the day and year first above written.
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
Name:
Title:
PHILLIPS-VAN HEUSEN CORPORATION,
by
Name:
Title:
EACH OF THE GUARANTORS LISTED ON
SCHEDULE I HERETO,
by
Name:
Title:
31
<PAGE>
SCHEDULE I
GUARANTORS
<PAGE>
SCHEDULE II
COPYRIGHTS
<PAGE>
SCHEDULE III
LICENSES
<PAGE>
SCHEDULE IV
PATENTS
<PAGE>
SCHEDULE V
TRADEMARKS
<PAGE>
Annex 1 to the
Security Agreement
DEPOSIT BANK AGREEMENT dated as of [
], among [Name of Grantor], a [ ]
corporation (the "Grantor"), THE CHASE MANHATTAN
BANK, a New York banking corporation ("Chase"),
as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties
(such term, and each other capitalized term used
but not defined herein, having the meaning given
it in the Security Agreement referred to below)
and [ ], a
[ ] banking corporation (the
"Deposit Bank").
A. The Grantors and the Collateral Agent are parties to a
Security Agreement dated as of April 22, 1998 (as amended,
supplemented or otherwise modified from time to time, the
"Security Agreement"), and the related Credit Agreement, dated as
of April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among Phillips-Van
Heusen Corporation, the lenders from time to time party thereto
(the "Lenders") and Chase, as administrative agent and Collateral
Agent. Pursuant to the terms of the Security Agreement, the
Grantors have granted to the Collateral Agent, for the ratable
benefit of the Secured Parties, a security interest in the
Accounts Receivable and other Collateral (including Inventory,
cash, cash accounts and Proceeds) to secure the payment and
performance of the Obligations and have irrevocably appointed the
Collateral Agent as their agent to collect amounts due in respect
of Accounts Receivable and Inventory.
B. The Deposit Bank has established and maintains the
Deposit Accounts (as defined below) listed on Schedule 1 for the
benefit of the Grantor.
NOW, THEREFORE, the parties, in consideration of the sum of
$1.00 and other good and valuable consideration, the receipt and
sufficiency of which consideration is hereby acknowledged by each
of the parties, hereto agree as follows:
1. Each of the Deposit Bank and the Grantor hereby
acknowledges that (a) Chase is the Collateral Agent for the
Secured Parties pursuant to the Security Agreement and the Credit
Agreement and (b) the Grantor has granted to the Collateral Agent
a security interest in the Accounts Receivable and other
Collateral, including (i) each deposit account or other similar
account (each such account, a "Deposit Account") that the Grantor
maintains with the Deposit Bank, (ii) all funds on deposit in, or
otherwise to the credit of any such Deposit Account (the "Deposit
Account Funds") and (iii) all items (and Proceeds thereof) that
come into the possessions of the Deposit Bank in connection with
any such Deposit Account (the "Deposit Account Items"), to secure
the payment of Obligations pursuant to the Security Agreement.
<PAGE>
2. Each of the Deposit Bank and the Grantor hereby agrees
that, upon the occurrence and during the continuance of an Event
of Default, the Deposit Bank shall take direction from the
Collateral Agent with respect to (a) each Deposit Account that the
Grantor maintains with the Deposit Bank, (b) all Deposit Account
Funds and (c) all Deposit Account Items.
3. This Agreement shall terminate when (a) all the
Obligations have been indefeasibly paid in full in cash, the
Lenders have no further commitment to lend, the Exposure has been
reduced to zero and the Issuing Banks have no further commitment
to issue Letters of Credit under the Credit Agreement, or (b) upon
the earlier occurrence of the conditions for release and
termination set forth in Section 9.14 of the Credit Agreement.
4. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
Delivery of an executed signature page to this Agreement by
facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
5. EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF [
] GOVERN THE DEPOSIT ACCOUNT, THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
[Name of Grantor],
by
Name:
Title:
2
<PAGE>
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by
Name:
Title:
[Deposit Bank],
by
Name:
Title:
3
<PAGE>
Schedule I
<PAGE>
Annex 2 to the
Security Agreement
[Form Of]
PERFECTION CERTIFICATE
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as Administrative Agent and Collateral Agent, and (b) the
Guarantee Agreement dated as of April 22, 1998 (as amended,
supplemented or otherwise modified from time to time, the
"Guarantee Agreement") among the Guarantors and the Collateral
Agent.
The undersigned, an [executive officer or legal officer] of
the Borrower, hereby certifies to the Collateral Agent and each
other Secured Party as follows:
1. Names. (a) The exact corporate name of each Grantor, as
such name appears in its respective certificate of incorporation,
is as follows:
(b) Set forth below is each other corporate name each
Grantor has had in the past five years, together with the date of
the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor
has changed its identity or corporate structure in any way within
the past five years. Changes in identity or corporate structure
would include mergers, consolidations and acquisitions, as well as
any change in the form, nature or jurisdiction of corporate
organization. If any such change has occurred, include in
Schedule 1 the information required by Sections 1 and 2 of this
certificate as to each acquiree or constituent party to a merger
or consolidation.
(d) The following is a list of all other names (including
trade names or similar appellations) used by each Grantor or any
of its divisions or other business units in connection with the
conduct of its business or the ownership of its properties at any
time during the past five years:
(e) Set forth below is the Federal Taxpayer Identification
Number of each Grantor:
2. Current Locations. (a) The chief executive office of
each Grantor is located at the address set forth opposite its name
below:
Grantor Mailing Address County State
<PAGE>
(b) Set forth below opposite the name of each Grantor are
all locations where such Grantor maintains any books or records
relating to any Accounts Receivable (with each location at which
chattel paper, if any, is kept being indicated by an "*"):
Grantor Mailing Address County State
(c) Set forth below opposite the name of each Grantor are
all the places of business of such Grantor not identified in
paragraph (a) or (b) above:
Grantor Mailing Address County State
(d) Set forth below opposite the name of each Grantor are
all the locations where such Grantor maintains any Collateral not
identified above:
Grantor Mailing Address County State
(e) Set forth below opposite the name of each Grantor are
the names and addresses of all persons other than such Grantor
that have possession of any of the Collateral of such Grantor:
Grantor Mailing Address County State
3. Unusual Transactions. All Accounts Receivable have been
originated by the Grantors and all Inventory has been acquired by
the Grantors in the ordinary course of business.
4. File Search Reports. Attached hereto as Schedule 4(A)
are true copies of file search reports from the Uniform Commercial
Code filing offices where filings described in Section 3.16 of the
Credit Agreement are to be made. Attached hereto as Schedule 4(B)
is a true copy of each financing statement or other filing
identified in such file search reports.
5. UCC Filings. Duly signed financing statements on Form
UCC-1 in substantially the form of Schedule 5 hereto have been
prepared for filing in the Uniform Commercial Code filing office
in each jurisdiction where a Grantor has Collateral as identified
in Section 2 hereof.
2
<PAGE>
6. Schedule of Filings. Attached hereto as Schedule 6 is a
schedule setting forth, with respect to the filings described in
Section 5 above, each filing and the filing office in which such
filing is to be made.
7. Filing Fees. All filing fees and taxes payable in
connection with the filings described in Section 5 above have been
paid.
8. Stock Ownership. Attached hereto as Schedule 8 is a
true and correct list of all the duly authorized, issued and
outstanding stock of each Subsidiary and the record and beneficial
owners of such stock. Also set forth on Schedule 8 is each equity
Investment of the Borrower and each Subsidiary that represents 50%
or less of the equity of the entity in which such investment was
made.
9. Notes. Attached hereto as Schedule 9 is a true and
correct list of all notes held by the Borrower and each Subsidiary
and all intercompany notes between any of (i) the Borrower, (ii)
any Subsidiary of the Borrower and (iii) any other such
Subsidiary.
10. Advances. Attached hereto as Schedule 10 is (a) a true
and correct list of all advances (i) made by the Borrower to any
Subsidiary of the Borrower or (ii) made by any Subsidiary of the
Borrower to the Borrower or any other Subsidiary of the Borrower,
which advances will be on and after the date hereof evidenced by
one or more intercompany notes pledged to the Collateral Agent
under the Pledge Agreement, and (b) a true and correct list of all
unpaid intercompany transfers of goods sold and delivered by or to
the Borrower or any Subsidiary of the Borrower.
11. Mortgage Filings. Attached hereto as Schedule 11 is a
schedule setting forth, with respect to each Mortgaged Property,
(i) the exact corporate name of the corporation that owns such
property as such name appears in its certificate of incorporation,
(ii) if different from the name identified pursuant to clause (i),
the exact name of the current record owner of such property
reflected in the records of the filing office for such property
identified pursuant to the following clause and (iii) the filing
office in which a Mortgage with respect to such property must be
filed or recorded in order for the Collateral Agent to obtain a
perfected security interest therein.
3
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate on this [ ] day of April.
PHILLIPS-VAN HEUSEN CORPORATION
by
Name:
Title: [executive officer or legal officer]
4
<PAGE>
Annex 3 to the
Security Agreement
SUPPLEMENT NO. __ dated as of
, to the Security Agreement dated as of
April 22, 1998 among PHILLIPS-VAN HEUSEN
CORPORATION, a Delaware corporation (the
"Borrower"), each Subsidiary of the Borrower
listed on Schedule I hereto (each such
Subsidiary individually a "Subsidiary Guarantor"
and collectively, the "Subsidiary Guarantors";
the Borrower and the Subsidiary Guarantors are
referred to collectively herein as the
"Grantors") and THE CHASE MANHATTAN BANK, a New
York banking corporation ("Chase"), as
collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as
defined in the Security Agreement).
Reference is made to (a) the Credit Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower,
the lenders from time to time party thereto (the "Lenders") and
Chase, as administrative agent (in such capacity, the
"Administrative Agent"), (b) the Guarantee Agreement dated as of
April 22, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee Agreement"), among the
Subsidiary Guarantors and the Collateral Agent and (c) the
Indenture dated as of November 1, 1993, by and between the
Borrower and The Bank of New York, as Trustee for the holders (the
"Debenture Holders") of the Borrower's 7-3/4% Debentures due 2023.
The Lenders have agreed to make Loans to the Borrower, and
the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement.
Each of the Subsidiary Guarantors has agreed to guarantee, among
other things, all the obligations of the Borrower under the Credit
Agreement. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit are conditioned upon,
among other things, the execution and delivery by the Grantors of
an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrower
under the Credit Agreement in respect of any Letter of Credit,
when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash
collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy,
<PAGE>
insolvency, receivership or other similar proceeding, regardless
of whether allowed or allowable in such proceeding), of the
Borrower to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower
under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all
the covenants, agreements, obligations and liabilities of each
Loan Party under or pursuant to this Agreement and the other Loan
Documents, (d) the due and punctual payment and performance of all
obligations of the Borrower under each Hedging Agreement entered
into with any counterparty that was a Lender or an Affiliate
thereof at the time such Hedging Agreement was entered into, (e)
the due and punctual payment and performance of all obligations in
respect of overdrafts and related liabilities owed to the
Administrative Agent or any of its Affiliates and arising from
treasury, depository and cash management services in connection
with any automated clearing house transfers of funds and (f) the
due and punctual payment by the Borrower of all obligations and
liabilities of the Borrower in respect of the Debentures, when and
as due, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise (all the monetary and other
obligations described in the preceding clauses (a) through (f)
being collectively called the "Obligations").
Accordingly, the Collateral Agent and the New Grantor agree
as follows:
SECTION 1. In accordance with Section 8.12 of the Security
Agreement, the New Grantor by its signature below becomes a
Grantor under the Security Agreement with the same force and
effect as if originally named therein as a Grantor and the New
Grantor hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and
(b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct
on and as of the date hereof. In furtherance of the foregoing,
the New Grantor, as security for the payment and performance in
full of the Obligations (as defined in the Security Agreement),
does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties,
their successors and assigns, a first-priority security interest
in and lien on all of the New Grantor's right, title and interest
in and to the Collateral (as defined in the Security Agreement) of
the New Grantor. Each reference to a "Grantor" in the Security
Agreement shall be deemed to include the New Grantor. The Security
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the
Collateral Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it
and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
2
<PAGE>
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Supplement shall
become effective when the Collateral Agent shall have received
counterparts of this Supplement that, when taken together, bear
the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and
correct schedule of the location of any and all Collateral of the
New Grantor and (b) set forth under its signature hereto, is the
true and correct location of the chief executive office of the New
Grantor.
SECTION 5. Except as expressly supplemented hereby, the
Security Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in
the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and
of itself affect the validity of such provision in any other
jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be
in writing and given as provided in Section 8.03 of the Security
Agreement. All communications and notices hereunder to the New
Grantor shall be given to it at the address set forth under its
signature below.
SECTION 9. The New Grantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Collateral
Agent.
3
<PAGE>
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent
have duly executed this Supplement to the Security Agreement as of
the day and year first above written.
[Name of New Grantor],
by
Name:
Title:
Address:
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by
Name:
Title:
4
<PAGE>
SCHEDULE I
to Supplement No.___ to the
Security Agreement
LOCATION OF COLLATERAL
Description Location
<PAGE>
Exhibit H
[FORM OF] MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FINANCING STATEMENT
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT dated as
of April 22, 1998 (this "Mortgage"), by
PHILLIPS-VAN HEUSEN CORPORATION, a Delaware
corporation, having an office at 1290 Avenue of the
Americas, New York, NY 10104-0101 (the "Mortgagor"
or the "Borrower"), to THE CHASE MANHATTAN BANK, a
New York banking corporation, having an office at
270 Park Avenue, New York, New York 10017, as
collateral agent (in such capacity, the "
Collateral Agent") for the benefit of the Secured
Parties (as defined below) (the "Mortgagee");
WITNESSETH THAT:
A. Reference is made to (x) the Credit Agreement dated
as of April 22, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among
Mortgagor, the financial institutions party thereto as lenders
(the "Lenders"), The Chase Manhattan Bank, as administrative
agent (in such capacity, the "Administrative Agent") and as
swingline lender (in such capacity, the "Swingline Lender"),
CITICORP USA, INC., as documentation agent, and Chase
Securities Inc., as arranger and (y) the Indenture dated as of
November 1, 1993, by and between the Borrower and the Bank of
New York, as Trustee for the holders (the "Debenture Holders")
of the Borrower's 7-3/4% Debentures due 2023. As used herein,
the term "Secured Parties" shall mean (i) the Lenders, (ii)
the Collateral Agent, (iii) the Administrative Agent, (iii)
the Issuing Banks, (iv) each counterparty to a Hedging
Agreement entered into with the Borrower if such counterparty
was a Lender or an Affiliate thereof at the time the Hedging
Agreement was entered into, (v) the beneficiaries of each
indemnification obligation undertaken by the Borrower under
any Loan Document, (vi) the Debenture Holders and (vii) the
successors and permitted assigns of each of the foregoing.
Each capitalized term used herein but not defined herein shall
have the meaning assigned to such term in the Credit
Agreement. Pursuant to the Credit Agreement, (i) the Lenders
have lent or agreed to lend to the Borrower (a) on a revolving
basis, Revolving Loans, at any time and from time to time
during the Revolving Availability Period, in an aggregate
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principal amount at any time outstanding not in excess of
$325,000,000, (ii) the Swingline Lender has agreed to lend, on
a revolving basis, Swingline Loans, at any time and from time
to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding not in
excess of $10,000,000 and (iii) the Issuing Banks have issued
and have agreed to issue Letters of Credit in an aggregate
face amount at any time outstanding not in excess of
$250,000,000, in each case on the terms and subject to the
conditions of the Credit Agreement.
B. In order to induce the Lenders to make Loans and the
Issuing Bank to issue Letters of Credit, the Subsidiary Loan
Parties have agreed to guarantee pursuant to the Guarantee
Agreement the due and punctual payment and performance of the
Obligations (as defined in paragraph C below).
C. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit under the Credit
Agreement are conditioned upon, among other things, the
execution and delivery by the Mortgagor of this Mortgage in
the form hereof, to secure (a) the due and punctual payment of
(i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the
Borrower under the Credit Agreement in respect of any Letter
of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the
Mortgagor to the Secured Parties under the Credit Agreement,
this Mortgage and the other Loan Documents to which the
Mortgagor is or is to be a party, (b) the due and punctual
performance of all covenants, agreements, obligations and
liabilities of the Mortgagor under or pursuant to the Credit
Agreement, this Mortgage and the other Loan Documents, (c) the
due and punctual payment and performance of all obligations of
the Borrower under each Hedging Agreement entered into with a
counterparty that was a Lender or an Affiliate thereof at the
time such Hedging Agreement was entered into, (d) the due and
punctual payment and performance of all obligations in respect
of overdrafts and related liabilities owed to the
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Administrative Agent or any of its Affiliates and arising from
treasury, depository and cash management services in
connection with any automated clearing house transfers of
funds and (e) the due and punctual payment by the Borrower of
all obligations and liabilities of the Borrower in respect of
the Debentures, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or
otherwise (all the obligations referred to in this paragraph
C being referred to, collectively, as the "Obligations").
D. Pursuant to the requirements of the Credit
Agreement, the Mortgagor is entering into this Mortgage to
create a security interest in the Mortgaged Property (as
defined herein) to secure the performance and payment by the
Mortgagor of the Obligations. The Credit Agreement also
requires the granting by other Loan Parties of mortgages (the
"Other Mortgages") that create security interests in certain
Mortgaged Properties other than the Mortgaged Property to
secure the performance of the Obligations.
Granting Clauses
NOW THEREFORE, IN CONSIDERATION OF the foregoing and in
order to secure (A) the due and punctual payment and
performance of the Obligations, (B) the due and punctual
payment by the Mortgagor of all taxes and insurance premiums
relating to the Mortgaged Property and (C) all disbursements
made by Mortgagee for the payment of taxes, common area
charges or insurance premiums, all fees, expenses or advances
in connection with or relating to the Mortgaged Property, and
interest on such disbursements and other amounts not timely
paid in accordance with the terms of the Credit Agreement,
this Mortgage and the other Loan Documents, Mortgagor hereby
grants, conveys, mortgages, assigns and pledges to the
Mortgagee (for the ratable benefit of the Secured Parties) a
security interest in all the following described property (the
"Mortgaged Property") whether now owned or held or hereafter
acquired:
(1) all Mortgagor's right, title and interest in all
the fee estate in the land more particularly described on
Exhibit A hereto (the "Land"), together with all rights
appurtenant thereto, including the easements over certain
other adjoining land granted by any easement agreements,
covenant or restrictive agreements and all air rights,
mineral rights, water rights, oil and gas rights and
development rights, if any, relating thereto, and also
together with all of the other easements, rights,
privileges, interests, hereditaments and appurtenances
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thereunto belonging or in anyway appertaining and all of
the estate, right, title, interest, claim or demand
whatsoever of Mortgagor therein and in the streets and
ways adjacent thereto, either in law or in equity, in
possession or expectancy, now or hereafter acquired (the
"Premises");
(2) all Mortgagor's right, title and interest in all
buildings, improvements, structures, paving, parking
areas, walkways and landscaping now or hereafter erected
or located upon the Land, and all fixtures of every kind
and type affixed to the Premises or attached to or
forming part of any structures, buildings or improvements
and replacements thereof now or hereafter erected or
located upon the Land (the "Improvements");
(3) all Mortgagor's right, title and interest in all
apparatus, movable appliances, building materials,
equipment, fittings, furnishings, furniture, machinery
and other articles of tangible personal property of every
kind and nature, and replacements thereof, now or at any
time hereafter placed upon or used in any way in
connection with the use, enjoyment, occupancy or
operation of the Improvements or the Premises, including
all of Mortgagor's books and records relating thereto and
including all pumps, tanks, goods, machinery, tools,
equipment, lifts (including fire sprinklers and alarm
systems, fire prevention or control systems, cleaning
rigs, air conditioning, heating, boilers, refrigerating,
electronic monitoring, water, loading, unloading,
lighting, power, sanitation, waste removal,
entertainment, communications, computers, recreational,
window or structural, maintenance, truck or car repair
and all other equipment of every kind), restaurant, bar
and all other indoor or outdoor furniture (including
tables, chairs, booths, serving stands, planters, desks,
sofas, racks, shelves, lockers and cabinets), bar
equipment, glasses, cutlery, uniforms, linens,
memorabilia and other decorative items, furnishings,
appliances, supplies, inventory, rugs, carpets and other
floor coverings, draperies, drapery rods and brackets,
awnings, venetian blinds, partitions, chandeliers and
other lighting fixtures, freezers, refrigerators, walk-in
coolers, signs (indoor and outdoor), computer systems,
cash registers and inventory control systems, and all
other apparatus, equipment, furniture, furnishings, and
articles used in connection with the use or operation of
the Improvements or the Premises, it being understood
that the enumeration of any specific articles of property
shall in no way result in or be held to exclude any items
of property not specifically mentioned (the property
referred to in this subparagraph (3), the "Personal
Property");
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(4) all Mortgagor's right, title and interest in all
general intangibles relating to design, development,
operation, management and use of the Premises or the
Improvements, all certificates of occupancy, zoning
variances, building, use or other permits, approvals,
authorizations and consents obtained from and all
materials prepared for filing or filed with any
governmental agency in connection with the development,
use, operation or management of the Premises and
Improvements, all construction, service, engineering,
consulting, leasing, architectural and other similar
contracts concerning the design, construction,
management, operation, occupancy and/or use of the
Premises and Improvements, all architectural drawings,
plans, specifications, soil tests, feasibility studies,
appraisals, environmental studies, engineering reports
and similar materials relating to any portion of or all
of the Premises and Improvements, and all payment and
performance bonds or warranties or guarantees relating to
the Premises or the Improvements, all to the extent
assignable (the "Permits, Plans and Warranties");
(5) Mortgagor's interest in and rights under any and
all now or hereafter existing leases or licenses (under
which Mortgagor is landlord or licensor) and subleases
(under which Mortgagor is sublandlord), concession,
management, mineral or other agreements of a similar kind
that permit the use or occupancy of the Premises or the
Improvements for any purpose in return for any payment,
or the extraction or taking of any gas, oil, water or
other minerals from the Premises in return for payment of
any fee, rent or royalty (collectively, "Leases"), and
all agreements or contracts for the sale or other
disposition of all or any part of the Premises or the
Improvements, now or hereafter entered into by Mortgagor,
together with all charges, fees, income, issues, profits,
receipts, rents, revenues or royalties payable thereunder
("Rents");
(6) all Mortgagor's right, title and interest in and
to all real estate tax refunds and all proceeds of the
conversion, voluntary or involuntary, of any of the
Mortgaged Property into cash or liquidated claims
("Proceeds"), including Proceeds of insurance maintained
by the Mortgagor and condemnation awards, any awards that
may become due by reason of the taking by eminent domain
or any transfer in lieu thereof of the whole or any part
of the Premises or Improvements or any rights appurtenant
thereto, and any awards for change of grade of streets,
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together with any and all moneys now or hereafter on
deposit for the payment of real estate taxes, assessments
or common area charges levied against the Mortgaged
Property, unearned premiums on policies of fire and other
insurance maintained by the Mortgagor covering any
interest in the Mortgaged Property or required by the
Credit Agreement; and
(7) all Mortgagor's right, title and interest in and
to all extensions, improvements, betterments, renewals,
substitutes and replacements of and all additions and
appurtenances to, the Land, the Premises, the
Improvements, the Personal Property, the Permits, Plans
and Warranties and the Leases, hereinafter acquired by or
released to the Mortgagor or constructed, assembled or
placed by the Mortgagor on the Land, the Premises or the
Improvements, and all conversions of the security
constituted thereby, immediately upon such acquisition,
release, construction, assembling, placement or
conversion, as the case may be, and in each such case,
without any further mortgage, deed of trust, conveyance,
assignment or other act by the Mortgagor, all of which
shall become subject to the lien of this Mortgage as
fully and completely, and with the same effect, as though
now owned by the Mortgagor and specifically described
herein.
TO HAVE AND TO HOLD the Mortgaged Property unto the
Mortgagee, its successors and assigns, for the ratable benefit
of the Secured Parties, forever, subject only to the Permitted
Encumbrances (as hereinafter defined) and to satisfaction and
cancelation as provided in Section 3.04.
ARTICLE I
Representations, Warranties and Covenants of Mortgagor
Mortgagor agrees, covenants, represents and/or warrants
as follows:
SECTION 1.01. Title. (a) Mortgagor has good and
marketable title to an indefeasible fee estate in the Land and
Improvements subject to no lien, charge or encumbrance, and
this Mortgage is and will remain a valid and enforceable first
and prior lien on the Premises, Improvements and Rents subject
only to, in each case, Liens permitted by Section 6.02 of the
Credit Agreement and the exceptions and encumbrances referred
to in Schedule B to the title insurance policy being issued to
insure the lien of this Mortgage (collectively, the "Permitted
Encumbrances"). The Permitted Encumbrances do not materially
interfere with the current use, enjoyment or operation of the
Mortgaged Property.
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(b) Mortgagor has good and marketable title to all the
Personal Property subject to no lien, charge or encumbrance
other than this Mortgage and the Permitted Encumbrances.
Except as permitted under the Credit Agreement, the Personal
Property is not and will not become the subject matter of any
lease or other arrangement that is not a Permitted Encumbrance
whereby the ownership of any Personal Property will be held by
any person or entity other than Mortgagor; except as permitted
under the Credit Agreement, none of the Personal Property will
be removed from the Premises or the Improvements unless the
same is no longer needed for the continued operation of the
Premises and the Improvements as currently operated (or as
then operated, to the extent that any change from the current
manner of operation was permitted by the Credit Agreement) or
is replaced by other Personal Property of substantially equal
or greater utility and value; and Mortgagor will not create or
cause to be created (other than Permitted Encumbrances) any
security interest covering any of the Personal Property other
than the security interest in the Personal Property created in
favor of Mortgagee by this Mortgage or any other agreement
collateral hereto. The Mortgaged Property is served by water,
gas, electric, septic, storm and sanitary sewage facilities,
and such utilities serving the Premises and the Improvements
are located in and in the future will be located fully within
the Premises. There is vehicular access to the Premises and
the Improvements which is provided by, either a public
right-of-way abutting and contiguous with the Land or valid
recorded unsubordinated easements.
(c) Except as set forth on Schedule A hereto, there are
no leases affecting a material portion of the Mortgaged
Property. Each Lease is in full force and effect, and, except
as set forth on Schedule A hereto, Mortgagor has not given,
nor to Mortgagor's knowledge has it received, any uncured or
unwaived notice of default with respect to any material
obligation under any Lease. Each Lease is subject to no lien,
charge or encumbrance other than this Mortgage and the
Permitted Encumbrances. Mortgagor has not received any notice
of, nor has any knowledge of, any pending or contemplated
condemnation proceeding affecting the Mortgaged Property or
any sale or disposition thereof in lieu of condemnation.
Mortgagor is not obligated under any right of first refusal,
option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein.
(d) All easement agreements, covenant or restrictive
agreements, supplemental agreements and any other instruments
hereinabove referred to and mortgaged hereby (collectively,
the "Agreements") are and will remain valid, subsisting and in
full force and effect, unless the failure to remain valid,
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subsisting and in full force and effect, individually or in
the aggregate, could not reasonably be expected to have a
material adverse effect on the Mortgaged Property, and
Mortgagor is not in default thereunder and has fully performed
the material terms thereof required to be performed through
the date hereof, and has no knowledge of any default
thereunder or failure to fully perform the terms thereof by
any other party, nor of the occurrence of any event that after
notice or the passage of time or both will constitute a
default thereunder. Mortgagor is in compliance, and shall
comply, with all Agreements and Legal Requirements (including
land use and zoning ordinances, regulations and restrictions)
affecting the Mortgaged Property, except for any Agreements
and Legal Requirements, the failure to comply with which could
not reasonably be expected to have a material adverse effect
on the Mortgaged Property.
(e) Mortgagor has good and lawful right and full power
and authority to mortgage the Mortgaged Property and will
forever warrant and defend its title to the Mortgaged
Property, the rights of Mortgagee therein under this Mortgage
and the validity and priority of the lien of this Mortgage
thereon against the claims of all persons and parties except
those having rights under Permitted Encumbrances to the extent
of those rights.
(f) This Mortgage, when duly recorded in the appropriate
public records and when financing statements are duly filed in
the appropriate public records, will create a valid, perfected
and enforceable lien upon and security interest in all the
Mortgaged Property and there will be no defenses or offsets to
this Mortgage that will be asserted by Mortgagor or its
Affiliates (or any third party defense or offset now known to
Mortgagor or its Affiliates) or to any of the Obligations
secured hereby for so long as any portion of the Obligations
is outstanding.
SECTION 1.02. Credit Agreement; Certain Amounts. (a)
This Mortgage is given pursuant to the Credit Agreement. Each
and every term and provision of the Credit Agreement
(excluding the governing law provisions thereof), including
the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of the
parties thereto shall be considered as if a part of this
Mortgage.
(b) To the extent the representations and covenants
contained in this Mortgage with respect to the Mortgaged
Property are more stringent or expansive than comparable
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representations and covenants contained in the Credit
Agreement, the representations and covenants contained herein
shall be construed to supplement the representations and
covenants in the Credit Agreement without creating a conflict
or inconsistency therewith, and Mortgagor shall be bound to
the more stringent or expansive representations and covenants
hereunder.
(c) If any remedy or right of Mortgagee pursuant hereto
is acted upon by Mortgagee or if any actions or proceedings
(including any bankruptcy, insolvency or reorganization
proceedings) are commenced in which Mortgagee is made a party
and is obliged to defend or uphold or enforce this Mortgage or
the rights of Mortgagee hereunder or the terms of any Lease,
or if a condemnation proceeding is instituted affecting the
Mortgaged Property, Mortgagor will pay all reasonable sums,
including reasonable attorneys' fees and disbursements,
incurred by Mortgagee related to the exercise of any remedy or
right of Mortgagee pursuant hereto or for the reasonable
expense of any such action or proceeding together with all
statutory or other costs, disbursements and allowances,
interest thereon from the date of demand for payment thereof
at the rate specified in clause (c) of Section 2.12(c) of the
Credit Agreement (the "Default Interest Rate"), and such sums
and the interest thereon shall, to the extent permissible by
law, be a lien on the Mortgaged Property prior to any right,
title to, interest in or claim upon the Mortgaged Property
attaching or accruing subsequent to the recording of this
Mortgage and shall be secured by this Mortgage to the extent
permitted by law. Any payment of amounts due under this
Mortgage not made on or before the due date for such payments
shall accrue interest daily without notice from the due date
until paid at the Default Interest Rate, and such interest at
the Default Interest Rate shall be immediately due upon demand
by Mortgagee.
SECTION 1.03. Payment of Taxes, Liens and Charges. (a)
Except as may be permitted by the Credit Agreement, Mortgagor
will pay and discharge from time to time prior to the time
when the same shall become delinquent, and before any interest
or penalty accrues thereon or attaches thereto, all taxes of
every kind and nature, all general and special assessments,
levies, permits, inspection and license fees, all water and
sewer rents, all vault charges, and all other public charges,
and all service charges, common area charges, private
maintenance charges, utility charges and all other private
charges, whether of a like or different nature, imposed upon
or assessed against the Mortgaged Property or any part thereof
or upon the Rents from the Mortgaged Property or arising in
respect of the occupancy, use or possession thereof.
(b) In the event of the passage of any state, Federal,
municipal or other governmental law, order, rule or regulation
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subsequent to the date hereof (i) deducting from the value of
real property for the purpose of taxation any lien or
encumbrance thereon or in any manner changing or modifying the
laws now in force governing the taxation of this Mortgage or
debts secured by mortgages or deeds of trust (other than laws
governing income, franchise and similar taxes generally) or
the manner of collecting taxes thereon and (ii) imposing a tax
to be paid by Mortgagee, either directly or indirectly, on
this Mortgage or any of the Loan Documents or to require an
amount of taxes to be withheld or deducted therefrom,
Mortgagor will promptly notify Mortgagee of such event. In
such event Mortgagor shall (i) agree to enter into such
further instruments as may be reasonably necessary or
desirable to obligate Mortgagor to make any applicable
additional payments and (ii) Mortgagor shall make such
additional payments.
(c) At any time that an Event of Default shall occur
hereunder and be continuing, or if required by any law
applicable to Mortgagor or to Mortgagee, Mortgagee shall have
the right to direct Mortgagor to make an initial deposit on
account of real estate taxes and assessments, insurance
premiums and common area charges, levied against or payable in
respect of the Mortgaged Property in advance and thereafter
semi-annually, each such deposit to be equal to one-half of
any such annual charges estimated in a reasonable manner by
Mortgagee in order to accumulate with Mortgagee sufficient
funds to pay such taxes, assessments, insurance premiums and
charges.
SECTION 1.04. Payment of Closing Costs. Mortgagor shall
pay all costs in connection with, relating to or arising out
of the preparation, execution and recording of this Mortgage,
including title company premiums and charges, inspection
costs, survey costs, recording fees and taxes, reasonable
attorneys', engineers', appraisers' and consultants' fees and
disbursements and all other similar reasonable expenses of
every kind.
SECTION 1.05. Alterations and Waste; Plans. (a) Except
as may be permitted by the Credit Agreement, no Improvements
will be materially altered or demolished or removed in whole
or in part by Mortgagor. Mortgagor will not erect any
additions to the existing Improvements or other structures on
the Premises which will materially interfere with the
operation conducted thereon on the date hereof, without the
written consent of Mortgagee. Mortgagor will not commit any
waste on the Mortgaged Property or make any alteration to, or
change in the use of, the Mortgaged Property that will
diminish the utility thereof for the operation of the business
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conducted thereon on the date hereof except as may be
permitted under the Credit Agreement or materially increase
any ordinary fire or other hazard arising out of construction
or operation, but in no event shall any such alteration or
change be contrary to the terms of any insurance policy
required to be kept pursuant to Section 1.06. Mortgagor will
maintain and operate the Improvements and Personal Property in
good repair, working order and condition, reasonable wear and
tear excepted.
(b) To the extent the same exist on the date hereof or
are obtained in connection with future permitted alterations,
Mortgagor shall maintain a complete set of final plans,
specifications, blueprints and drawings for the Mortgaged
Property either at the Mortgaged Property or in a particular
office at the headquarters of Mortgagor to which Mortgagee
shall have access upon reasonable advance notice and at
reasonable times.
SECTION 1.06. Insurance. Mortgagor will keep or cause
to be kept the Improvements and Personal Property insured
against such risks, and in the manner, required by Section
5.07 of the Credit Agreement.
SECTION 1.07. Casualty; Restoration of Casualty Damage.
Mortgagor, in accordance with Section 4.12 of the Security
Agreement, shall give Mortgagee prompt written notice of any
Casualty to the Mortgaged Property. Subject to the provisions
of Section 4.12 of the Security Agreement, payment of any loss
will be made directly in its entirety to Mortgagee and any
such proceeds relating to a Casualty shall be held or applied
by Mortgagee in accordance with Section 4.12 of the Security
Agreement.
SECTION 1.08. Condemnation/Eminent Domain. Mortgagor
shall, in accordance with Section 4.12 of the Security
Agreement, notify Mortgagee promptly upon obtaining knowledge
of any pending or threatened Condemnation of the Mortgaged
Property. All Condemnation Proceeds shall be held and applied
by Mortgagee in accordance with Section 4.12 of the Security
Agreement.
SECTION 1.09. Assignment of Leases and Rents. (a)
Mortgagor hereby irrevocably and absolutely grants, transfers
and assigns all of its right, title and interest in all
Leases, together with any and all extensions and renewals
thereof, for purposes of securing and discharging the
performance by Mortgagor of the Obligations. Mortgagor has
not assigned or executed any assignment of, and will not
assign or execute any assignment of, any other Lease or their
respective Rents to anyone other than Mortgagee.
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(b) Without Mortgagee's prior written consent, Mortgagor
will not (i) modify, amend, terminate or consent to the
cancelation or surrender of any Lease if such modification,
amendment, termination or consent would, in the reasonable
judgment of the Mortgagee, be adverse in any material respect
to the interests of the Lenders, the value of the Mortgaged
Property or the lien created by this Mortgage or (ii) consent
to an assignment of any tenant's interest in any Lease or to
a subletting thereof covering a material portion of the
Mortgaged Property.
(c) Subject to Section 1.09(d), Mortgagor has assigned
and transferred to Mortgagee all of Mortgagor's right, title
and interest in and to the Rents now or hereafter arising from
each Lease heretofore or hereafter made or agreed to by
Mortgagor, it being intended that this assignment establish,
subject to Section 1.09(d), an absolute transfer and
assignment of all Rents and all Leases to Mortgagee and not
merely to grant a security interest therein. Subject to
Section 1.09(d), Mortgagee may in Mortgagor's name and stead
(with or without first taking possession of any of the
Mortgaged Property personally or by receiver as provided
herein) operate the Mortgaged Property and rent, lease or let
all or any portion of any of the Mortgaged Property to any
party or parties at such rental and upon such terms as
Mortgagee shall, in its sole discretion, determine, and may
collect and have the benefit of all of said Rents arising from
or accruing at any time thereafter or that may thereafter
become due under any Lease.
(d) So long as an Event of Default shall not have
occurred and be continuing, Mortgagee will not exercise any of
its rights under Section 1.09(c), and Mortgagor shall receive
and collect the Rents accruing under any Lease; but after the
happening and during the continuance of any Event of Default,
Mortgagee may, at its option, receive and collect all Rents
and enter upon the Premises and Improvements through its
officers, agents, employees or attorneys for such purpose and
for the operation and maintenance thereof. Mortgagor hereby
irrevocably authorizes and directs each tenant, if any, and
each successor, if any, to the interest of any tenant under
any Lease, respectively, to rely upon any notice of a claimed
Event of Default sent by Mortgagee to any such tenant or any
of such tenant's successors in interest, and thereafter to pay
Rents to Mortgagee without any obligation or right to inquire
as to whether an Event of Default actually exists and even if
some notice to the contrary is received from the Mortgagor,
who shall have no right or claim against any such tenant or
successor in interest for any such Rents so paid to Mortgagee.
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Each tenant or any of such tenant's successors in interest
from whom Mortgagee or any officer, agent, attorney or
employee of Mortgagee shall have collected any Rents, shall be
authorized to pay Rents to Mortgagor only after such tenant or
any of their successors in interest shall have received
written notice from Mortgagee that the Event of Default is no
longer continuing, unless and until a further notice of an
Event of Default is given by Mortgagee to such tenant or any
of its successors in interest.
(e) Mortgagee will not become a mortgagee in possession
so long as it does not enter or take actual possession of the
Mortgaged Property. In addition, Mortgagee shall not be
responsible or liable for performing any of the obligations of
the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of
the Mortgaged Property, for negligence in the management,
upkeep, repair or control of any of the Mortgaged Property or
any other act or omission by any other person.
(f) Mortgagor shall furnish to Mortgagee, within 30 days
after a request by Mortgagee to do so, a written statement
containing the names of all tenants, subtenants and
concessionaires of the Premises or Improvements, the terms of
any Lease, the space occupied and the rentals or license fees
payable thereunder.
SECTION 1.10. Restrictions on Transfers and
Encumbrances. Except as permitted by the Credit Agreement,
Mortgagor shall not directly or indirectly sell, convey,
alienate, assign, lease, sublease, license, mortgage, pledge,
encumber or otherwise transfer, create, consent to or suffer
the creation of any lien, charges or any form of encumbrance
upon any interest in or any part of the Mortgaged Property, or
be divested of its title to the Mortgaged Property or any
interest therein in any manner or way, whether voluntarily or
involuntarily (other than resulting from a condemnation), or
engage in any common, cooperative, joint, time-sharing or
other congregate ownership of all or part thereof; provided,
however, that Mortgagor may in the ordinary course of business
within reasonable commercial standards, enter into easement or
covenant agreements that relate to and/or benefit the
operation of the Mortgaged Property and that do not materially
or adversely affect the use and operation of the same (except
for customary utility easements that service the Mortgaged
Property, which are permitted).
SECTION 1.11. Security Agreement. This Mortgage is both
a mortgage of real property and a grant of a security interest
in personal property, and shall constitute and serve as a
"Security Agreement" within the meaning of the uniform
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commercial code as adopted in the state wherein the Premises
are located ("UCC"). Mortgagor has hereby granted unto
Mortgagee a security interest in and to all the Mortgaged
Property described in this Mortgage that is not real property,
and simultaneously with the recording of this Mortgage,
Mortgagor has filed or will file UCC financing statements, and
will file continuation statements prior to the lapse thereof,
at the appropriate offices in the state in which the Premises
are located to perfect the security interest granted by this
Mortgage in all the Mortgaged Property that is not real
property. Mortgagor hereby appoints Mortgagee as its true and
lawful attorney-in-fact and agent, for Mortgagor and in its
name, place and stead, in any and all capacities, to execute
any document and to file the same in the appropriate offices
(to the extent it may lawfully do so), and to perform each and
every act and thing reasonably requisite and necessary to be
done to perfect the security interest contemplated by the
preceding sentence. Mortgagee shall have all rights with
respect to the part of the Mortgaged Property that is the
subject of a security interest afforded by the UCC in addition
to, but not in limitation of, the other rights afforded
Mortgagee hereunder and under the Security Agreement.
SECTION 1.12. Filing and Recording. Mortgagor will
cause this Mortgage, any other security instrument creating a
security interest in or evidencing the lien hereof upon the
Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in
order to publish notice of and fully to protect the lien
hereof upon, and the security interest of Mortgagee in, the
Mortgaged Property. Mortgagor will pay all filing,
registration or recording fees, and all reasonable expenses
incidental to the execution and acknowledgment of this
Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Personal Property, and any
instrument of further assurance and all Federal, state, county
and municipal recording, documentary or intangible taxes and
other taxes, duties, imposts, assessments and charges arising
out of or in connection with the execution, delivery and
recording of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Personal Property
or any instrument of further assurance.
SECTION 1.13. Further Assurances. Upon demand by
Mortgagee, Mortgagor will, at the cost of Mortgagor and
without expense to Mortgagee, do, execute, acknowledge and
deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances
as Mortgagee shall from time to time reasonably require for
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the better assuring, conveying, assigning, transferring and
confirming unto Mortgagee the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or
which Mortgagor may be or may hereafter become bound to convey
or assign to Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage, or
for filing, registering or recording this Mortgage, and on
demand, Mortgagor will also execute and deliver and hereby
appoints Mortgagee as its true and lawful attorney-in-fact and
agent, for Mortgagor and in its name, place and stead, in any
and all capacities, to execute and file to the extent it may
lawfully do so, one or more financing statements, chattel
mortgages or comparable security instruments reasonably
requested by Mortgagee to evidence more effectively the lien
hereof upon the Personal Property and to perform each and
every act and thing requisite and necessary to be done to
accomplish the same.
SECTION 1.14. Additions to Mortgaged Property. All
right, title and interest of Mortgagor in and to all
extensions, improvements, betterments, renewals, substitutes
and replacements of, and all additions and appurtenances to,
the Mortgaged Property hereafter acquired by or released to
Mortgagor or constructed, assembled or placed by Mortgagor
upon the Premises or the Improvements, and all conversions of
the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or
conversion, as the case may be, and in each such case without
any further mortgage, conveyance, assignment or other act by
Mortgagor, shall become subject to the lien and security
interest of this Mortgage as fully and completely and with the
same effect as though now owned by Mortgagor and specifically
described in the grant of the Mortgaged Property above, but at
any and all times Mortgagor will execute and deliver to
Mortgagee any and all such further assurances, mortgages,
conveyances or assignments thereof as Mortgagee may reasonably
require for the purpose of expressly and specifically
subjecting the same to the lien and security interest of this
Mortgage.
SECTION 1.15. No Claims Against Mortgagee. Nothing
contained in this Mortgage shall constitute any consent or
request by Mortgagee, express or implied, for the performance
of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any
part thereof, nor as giving Mortgagor any right, power or
authority to contract for or permit the performance of any
labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any
claim against Mortgagee in respect thereof.
SECTION 1.16. Fixture Filing. Certain of the Mortgaged
Property is or will become "fixtures" (as that term is defined
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in the UCC) on the Land, and this Mortgage upon being filed
for record in the real estate records of the county wherein
such fixtures are situated shall operate also as a financing
statement filed as a fixture filing in accordance with the
applicable provisions of said UCC upon such of the Mortgaged
Property that is or may become fixtures.
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default. Any Event of Default
under the Credit Agreement (as such term is defined therein)
shall constitute an Event of Default under this Mortgage.
SECTION 2.02. Demand for Payment. If an Event of
Default shall occur and be continuing, then, upon written
demand of Mortgagee, Mortgagor will pay to Mortgagee all
amounts due hereunder and such further amount as shall be
sufficient to cover the costs and expenses of collection,
including attorneys' fees, disbursements and expenses incurred
by Mortgagee and Mortgagee shall be entitled and empowered to
institute an action or proceedings at law or in equity for the
collection of the sums so due and unpaid, to prosecute any
such action or proceedings to judgment or final decree, to
enforce any such judgment or final decree against Mortgagor
and to collect, in any manner provided by law, all moneys
adjudged or decreed to be payable.
SECTION 2.03. Rights To Take Possession, Operate and
Apply Revenues. (a) If an Event of Default shall occur and
be continuing, Mortgagor shall, upon demand of Mortgagee,
forthwith surrender to Mortgagee actual possession of the
Mortgaged Property and, if and to the extent not prohibited by
applicable law, Mortgagee itself, or by such officers or
agents as it may appoint, may then enter and take possession
of all the Mortgaged Property without the appointment of a
receiver or an application therefor, exclude Mortgagor and its
agents and employees wholly therefrom, and have access to the
books, papers and accounts of Mortgagor.
(b) If Mortgagor shall for any reason fail to surrender
or deliver the Mortgaged Property or any part thereof after
such demand by Mortgagee, Mortgagee may to the extent not
prohibited by applicable law, obtain a judgment or decree
conferring upon Mortgagee the right to immediate possession or
requiring Mortgagor to deliver immediate possession of the
Mortgaged Property to Mortgagee, to the entry of which
judgment or decree Mortgagor hereby specifically consents.
Mortgagor will pay to Mortgagee, upon demand, all reasonable
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expenses of obtaining such judgment or decree, including
reasonable compensation to Mortgagee's attorneys and agents
with interest thereon at the Default Interest Rate; and all
such expenses and compensation shall, until paid, be secured
by this Mortgage.
(c) Upon every such entry or taking of possession,
Mortgagee may, to the extent not prohibited by applicable law,
hold, store, use, operate, manage and control the Mortgaged
Property, conduct the business thereof and, from time to time,
(i) make all necessary and proper maintenance, repairs,
renewals, replacements, additions, betterments and
improvements thereto and thereon, (ii) purchase or otherwise
acquire additional fixtures, personalty and other property,
(iii) insure or keep the Mortgaged Property insured, (iv)
manage and operate the Mortgaged Property and exercise all the
rights and powers of Mortgagor to the same extent as Mortgagor
could in its own name or otherwise with respect to the same,
or (v) enter into any and all agreements with respect to the
exercise by others of any of the powers herein granted
Mortgagee, all as may from time to time be directed or
determined by Mortgagee to be in its best interest and
Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name,
place and stead, in any and all capacities, to perform any of
the foregoing acts. Mortgagee may collect and receive all the
Rents, issues, profits and revenues from the Mortgaged
Property, including those past due as well as those accruing
thereafter, and, after deducting (i) all expenses of taking,
holding, managing and operating the Mortgaged Property
(including compensation for the services of all persons
employed for such purposes), (ii) the costs of all such
maintenance, repairs, renewals, replacements, additions,
betterments, improvements, purchases and acquisitions, (iii)
the costs of insurance, (iv) such taxes, assessments and other
similar charges as Mortgagee may at its option pay, (v) other
proper charges upon the Mortgaged Property or any part thereof
and (vi) the compensation, expenses and disbursements of the
attorneys and agents of Mortgagee, Mortgagee shall apply the
remainder of the moneys and proceeds so received first to the
payment of the Mortgagee for the satisfaction of the
Obligations, and second, if there is any surplus, to
Mortgagor, subject to the entitlement of others thereto under
applicable law.
(d) Whenever, before any sale of the Mortgaged Property
under Section 2.06, all Obligations that are then due shall
have been paid and all Events of Default fully cured,
Mortgagee will surrender possession of the Mortgaged Property
back to Mortgagor, its successors or assigns. The same right
of taking possession shall, however, arise again if any
subsequent Event of Default shall occur and be continuing.
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SECTION 2.04. Right To Cure Mortgagor's Failure to
Perform. Should Mortgagor fail in the payment, performance or
observance of any term, covenant or condition required by this
Mortgage or the Credit Agreement (with respect to the
Mortgaged Property), Mortgagee may pay, perform or observe the
same, and all payments made or costs or expenses incurred by
Mortgagee in connection therewith shall be secured hereby and
shall be, without demand, immediately repaid by Mortgagor to
Mortgagee with interest thereon at the Default Interest Rate.
Mortgagee shall be the judge using reasonable discretion of
the necessity for any such actions and of the amounts to be
paid. Mortgagee is hereby empowered to enter and to authorize
others to enter upon the Premises or the Improvements or any
part thereof for the purpose of performing or observing any
such defaulted term, covenant or condition without having any
obligation to so perform or observe and without thereby
becoming liable to Mortgagor, to any person in possession
holding under Mortgagor or to any other person.
SECTION 2.05. Right to a Receiver. If an Event of
Default shall occur and be continuing, Mortgagee, upon
application to a court of competent jurisdiction, shall be
entitled as a matter of right to the appointment of a receiver
to take possession of and to operate the Mortgaged Property
and to collect and apply the Rents. The receiver shall have
all of the rights and powers permitted under the laws of the
state wherein the Mortgaged Property is located. Mortgagor
shall pay to Mortgagee upon demand all reasonable expenses,
including receiver's fees, reasonable attorney's fees and
disbursements, costs and agent's compensation incurred
pursuant to the provisions of this Section 2.05; and all such
expenses shall be secured by this Mortgage and shall be,
without demand, immediately repaid by Mortgagor to Mortgagee
with interest thereon at the Default Interest Rate.
SECTION 2.06. Foreclosure and Sale. (a) If an Event of
Default shall occur and be continuing, Mortgagee may elect to
sell the Mortgaged Property or any part of the Mortgaged
Property by exercise of the power of foreclosure or of sale
granted to Mortgagee by applicable law or this Mortgage. In
such case, Mortgagee may commence a civil action to foreclose
this Mortgage, or it may proceed and sell the Mortgaged
Property to satisfy any Obligation. Mortgagee or an officer
appointed by a judgment of foreclosure to sell the Mortgaged
Property, may sell all or such parts of the Mortgaged Property
as may be chosen by Mortgagee at the time and place of sale
fixed by it in a notice of sale, either as a whole or in
separate lots, parcels or items as Mortgagee shall deem
expedient, and in such order as it may determine, at public
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auction to the highest bidder. Mortgagee or an officer
appointed by a judgment of foreclosure to sell the Mortgaged
Property may postpone any foreclosure or other sale of all or
any portion of the Mortgaged Property by public announcement
at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement or
subsequently noticed sale. Without further notice, Mortgagee
or an officer appointed to sell the Mortgaged Property may
make such sale at the time fixed by the last postponement, or
may, in its discretion, give a new notice of sale. Any
person, including Mortgagor or Mortgagee or any designee or
affiliate thereof, may purchase at such sale.
(b) The Mortgaged Property may be sold subject to unpaid
taxes and Permitted Encumbrances, and, after deducting all
costs, fees and expenses of Mortgagee (including costs of
evidence of title in connection with the sale), Mortgagee or
an officer that makes any sale shall apply the proceeds of
sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole
of the Mortgaged Property or any defective or irregular sale
made hereunder shall not exhaust the power of foreclosure or
of sale provided for herein; and subsequent sales may be made
hereunder until the Obligations have been satisfied, or the
entirety of the Mortgaged Property has been sold.
(d) If an Event of Default shall occur and be
continuing, Mortgagee may instead of, or in addition to,
exercising the rights described in Section 2.06(a) above and
either with or without entry or taking possession as herein
permitted, proceed by a suit or suits in law or in equity or
by any other appropriate proceeding or remedy (i) to
specifically enforce payment of some or all of the
Obligations, or the performance of any term, covenant,
condition or agreement of this Mortgage or any other Loan
Document or any other right, or (ii) to pursue any other
remedy available to Mortgagee, all as Mortgagee shall
determine most effectual for such purposes.
SECTION 2.07. Other Remedies. (a) In case an Event of
Default shall occur and be continuing, Mortgagee may also
exercise, to the extent not prohibited by law, any or all of
the remedies available to a secured party under the uniform
commercial code of the State wherein the Mortgaged Property is
located.
(b) In connection with a sale of the Mortgaged Property
or any Personal Property and the application of the proceeds
of sale as provided in Section 2.08, Mortgagee shall be
entitled to enforce payment of and to receive up to the
principal amount of the Obligations, plus all other charges,
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payments and costs due under this Mortgage, and to recover a
deficiency judgment for any portion of the aggregate principal
amount of the Obligations remaining unpaid, with interest.
SECTION 2.08. Application of Sale Proceeds and Rents.
After any foreclosure sale of all or any of the Mortgaged
Property, Mortgagee shall receive the proceeds of sale, no
purchaser shall be required to see to the application of the
proceeds and Mortgagee shall apply the proceeds of the sale
together with any Rents that may have been collected and any
other sums that then may be held by Mortgagee under this
Mortgage as follows:
FIRST, to the payment of the costs and expenses of
such sale, including compensation to Mortgagee's
attorneys and agents, and of any judicial proceedings
wherein the same may be made, and of all expenses,
liabilities and advances made or incurred by Mortgagee
under this Mortgage, together with interest at the
Default Interest Rate on all advances made by Mortgagee,
including all taxes or assessments (except any taxes,
assessments or other charges subject to which the
Mortgaged Property shall have been sold) and the cost of
removing any Permitted Encumbrance (except any Permitted
Encumbrance subject to which the Mortgaged Property was
sold);
SECOND, to the Mortgagee for the distribution to the
Secured Parties for the satisfaction of the Obligations
owed to the Secured Parties; and
THIRD, to the Mortgagor, its successors or assigns,
or as a court of competent jurisdiction may otherwise
direct.
The Mortgagee shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in
accordance with this Mortgage. Upon any sale of the Mortgaged
Property by the Mortgagee (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the
receipt of the Mortgagee or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers
of the Mortgaged Property so sold and such purchaser or
purchasers shall not be obligated to see to the application of
any part of the purchase money paid over to the Mortgagee or
such officer or be answerable in any way for the
misapplication thereof.
SECTION 2.09. Mortgagor as Tenant Holding Over. If
Mortgagor remains in possession of any of the Mortgaged
Property after any foreclosure sale by Mortgagee, at
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Mortgagee's election Mortgagor shall be deemed a tenant
holding over and shall forthwith surrender possession to the
purchaser or purchasers at such sale or be summarily
dispossessed or evicted according to provisions of law
applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay,
Extension and Redemption Laws. Mortgagor waives, to the
extent not prohibited by law, (i) the benefit of all laws now
existing or that hereafter may be enacted providing for any
appraisement of any portion of the Mortgaged Property, (ii)
the benefit of all laws now existing or that may be hereafter
enacted in any way extending the time for the enforcement or
the collection of amounts due under any of the Obligations or
creating or extending a period of redemption from any sale
made in collecting said debt or any other amounts due
Mortgagee, (iii) any right to at any time insist upon, plead,
claim or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, homestead
exemption, valuation, stay, statute of limitations, extension
or redemption, or sale of the Mortgaged Property as separate
tracts, units or estates or as a single parcel in the event of
foreclosure or notice of deficiency, and (iv) all rights of
redemption, valuation, appraisement, stay of execution, notice
of election to mature or declare due the whole of or each of
the Obligations and marshalling in the event of foreclosure of
this Mortgage.
SECTION 2.11. Discontinuance of Proceedings. In case
Mortgagee shall proceed to enforce any right, power or remedy
under this Mortgage by foreclosure, entry or otherwise, and
such proceedings shall be discontinued or abandoned for any
reason, or shall be determined adversely to Mortgagee, then
and in every such case Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder, and
all rights, powers and remedies of Mortgagee shall continue as
if no such proceeding had been taken.
SECTION 2.12. Suits To Protect the Mortgaged Property.
Mortgagee shall have power (a) to institute and maintain suits
and proceedings to prevent any impairment of the Mortgaged
Property by any acts that may be unlawful or in violation of
this Mortgage, (b) to preserve or protect its interest in the
Mortgaged Property and in the Rents arising therefrom and (c)
to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the
enforcement of or compliance with such enactment, rule or
order would impair the security or be prejudicial to the
interest of Mortgagee hereunder.
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SECTION 2.13. Filing Proofs of Claim. In case of any
receivership, insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition or other proceedings
affecting Mortgagor, Mortgagee shall, to the extent permitted
by law, be entitled to file such proofs of claim and other
documents as may be necessary or advisable in order to have
the claims of Mortgagee allowed in such proceedings for the
Obligations secured by this Mortgage at the date of the
institution of such proceedings and for any interest accrued,
late charges and additional interest or other amounts due or
that may become due and payable hereunder after such date.
SECTION 2.14. Possession by Mortgagee. Notwithstanding
the appointment of any receiver, liquidator or trustee of
Mortgagor, any of its property or the Mortgaged Property,
Mortgagee shall be entitled, to the extent not prohibited by
law, to remain in possession and control of all parts of the
Mortgaged Property now or hereafter granted under this
Mortgage to Mortgagee in accordance with the terms hereof and
applicable law.
SECTION 2.15. Waiver. (a) No delay or failure by
Mortgagee to exercise any right, power or remedy accruing upon
any breach or Event of Default shall exhaust or impair any
such right, power or remedy or be construed to be a waiver of
any such breach or Event of Default or acquiescence therein;
and every right, power and remedy given by this Mortgage to
Mortgagee may be exercised from time to time and as often as
may be deemed expedient by Mortgagee. No consent or waiver by
Mortgagee to or of any breach or default by Mortgagor in the
performance of the Obligations shall be deemed or construed to
be a consent or waiver to or of any other breach or Event of
Default in the performance of the same or any other
Obligations by Mortgagor hereunder. No failure on the part of
Mortgagee to complain of any act or failure to act or to
declare an Event of Default, irrespective of how long such
failure continues, shall constitute a waiver by Mortgagee of
its rights hereunder or impair any rights, powers or remedies
consequent on any future Event of Default by Mortgagor.
(b) Even if Mortgagee (i) grants some forbearance or an
extension of time for the payment of any sums secured hereby,
(ii) takes other or additional security for the payment of any
sums secured hereby, (iii) waives or does not exercise some
right granted herein or under the Loan Documents, (iv)
releases a part of the Mortgaged Property from this Mortgage,
(v) agrees to change some of the terms, covenants, conditions
or agreements of any of the Loan Documents, (vi) consents to
the filing of a map, plat or replat affecting the Premises,
(vii) consents to the granting of an easement or other right
affecting the Premises or (viii) makes or consents to an
agreement subordinating Mortgagee's lien on the Mortgaged
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Property hereunder; no such act or omission shall preclude
Mortgagee from exercising any other right, power or privilege
herein granted or intended to be granted in the event of any
breach or Event of Default then made or of any subsequent
default; nor, except as otherwise expressly provided in an
instrument executed by Mortgagee, shall this Mortgage be
altered thereby. In the event of the sale or transfer by
operation of law or otherwise of all or part of the Mortgaged
Property, Mortgagee is hereby authorized and empowered to deal
with any vendee or transferee with reference to the Mortgaged
Property secured hereby, or with reference to any of the
terms, covenants, conditions or agreements hereof, as fully
and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging
any liabilities, obligations or undertakings.
SECTION 2.16. Remedies Cumulative. No right, power or
remedy conferred upon or reserved to Mortgagee by this
Mortgage is intended to be exclusive of any other right, power
or remedy, and each and every such right, power and remedy
shall be cumulative and concurrent and in addition to any
other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity. In the event any one
or more of the provisions contained in this Mortgage shall for
any reason be held to be invalid, illegal or unenforceable in
any respect, such validity, illegality or unenforceability
shall, at the option of Mortgagee, not affect any other
provision of this Mortgage, and this Mortgage shall be
construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
SECTION 3.02. Notices. All notices and communications
hereunder shall be in writing and given to Mortgagor in
accordance with the terms of the Credit Agreement at the
address set forth on the first page of this Mortgage and to
the Administrative Agent or any Lender as provided in the
Credit Agreement.
SECTION 3.03. Successors and Assigns. All of the
grants, covenants, terms, provisions and conditions herein
shall run with the Premises and the Improvements and shall
apply to, bind and inure to, the benefit of the permitted
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successors and assigns of Mortgagor and the successors and
assigns of Mortgagee.
SECTION 3.04. Satisfaction and Cancellation. (a)
Except as otherwise provided in the Credit Agreement, the
conveyance to Mortgagee of the Mortgaged Property as security,
created and consummated by this Mortgage shall be null and
void when all the Obligations have been indefeasibly paid in
full in accordance with the terms of the Loan Documents and
the Lenders have no further commitment to make Loans under the
Credit Agreement, no Letters of Credit are outstanding and the
Issuing Lender has no further obligation to issue Letters of
Credit under the Credit Agreement.
(b) Upon a sale or financing by Mortgagor of all or any
portion of the Mortgaged Property that is permitted under the
Credit Agreement and the application of the Net Proceeds of
such sale or financing in accordance with the Credit
Agreement, the lien of this Mortgage shall be released from
the applicable portion of the Mortgaged Property. Mortgagor
shall give Mortgagee reasonable written notice of any sale or
financing of the Mortgaged Property prior to the closing of
such sale or financing.
(c) In connection with any termination or release
pursuant to paragraph (a), the Mortgage shall be marked
"satisfied" by the Mortgagee, and this Mortgage shall be
canceled of record at the request and at the expense of the
Mortgagor. Mortgagee shall execute any documents reasonably
requested by Mortgagor to accomplish the foregoing or to
accomplish any release contemplated by paragraph (a) and
Mortgagor will pay all costs and expenses, including
reasonable attorneys' fees, disbursements and other charges,
incurred by Mortgagee in connection with the preparation and
execution of such documents.
SECTION 3.05. Definitions. As used in this Mortgage,
the singular shall include the plural as the context requires
and the following words and phrases shall have the following
meanings: (a) "including" shall mean "including but not
limited to"; (b) "provisions" shall mean "provisions, terms,
covenants and/or conditions"; (c) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage or deed of
trust"; (d) "obligation" shall mean "obligation, duty,
covenant and/or condition"; and (e) "any of the Mortgaged
Property" shall mean "the Mortgaged Property or any part
thereof or interest therein". Any act that Mortgagee is
permitted to perform hereunder may be performed at any time
and from time to time by Mortgagee or any person or entity
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designated by Mortgagee. Any act that is prohibited to
Mortgagor hereunder is also prohibited to all lessees of any
of the Mortgaged Property. Each appointment of Mortgagee as
attorney-in-fact for Mortgagor under the Mortgage is
irrevocable, with power of substitution and coupled with an
interest. Subject to the applicable provisions hereof,
Mortgagee has the right to refuse to grant its consent,
approval or acceptance or to indicate its satisfaction, in its
sole discretion, whenever such consent, approval, acceptance
or satisfaction is required hereunder.
SECTION 3.06. Multisite Real Estate Transaction.
Mortgagor acknowledges that this Mortgage is one of a number
of Other Mortgages and Security Documents that secure the
Obligations. Mortgagor agrees that the lien of this Mortgage
shall be absolute and unconditional and shall not in any
manner be affected or impaired by any acts or omissions
whatsoever of Mortgagee and without limiting the generality of
the foregoing, the lien hereof shall not be impaired by any
acceptance by the Mortgagee of any security for or guarantees
of any of the Obligations hereby secured, or by any failure,
neglect or omission on the part of Mortgagee to realize upon
or protect any Obligation or indebtedness hereby secured or
any collateral security therefor including the Other Mortgages
and other Security Documents. The lien hereof shall not in
any manner be impaired or affected by any release (except as
to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence,
alteration, changing, modification or disposition of any of
the Obligations secured or of any of the collateral security
therefor, including the Other Mortgages and other Security
Documents or of any guarantee thereof, and Mortgagee may at
its discretion foreclose, exercise any power of sale, or
exercise any other remedy available to it under any or all of
the Other Mortgages and other Security Documents without first
exercising or enforcing any of its rights and remedies
hereunder. Such exercise of Mortgagee's rights and remedies
under any or all of the Other Mortgages and other Security
Documents shall not in any manner impair the indebtedness
hereby secured or the lien of this Mortgage and any exercise
of the rights or remedies of Mortgagee hereunder shall not
impair the lien of any of the Other Mortgages and other
Security Documents or any of Mortgagee's rights and remedies
thereunder. Mortgagor specifically consents and agrees that
Mortgagee may exercise its rights and remedies hereunder and
under the Other Mortgages and other Security Documents
separately or concurrently and in any order that it may deem
appropriate and waives any rights of subrogation.
SECTION 3.07. Intercreditor Agreements; Mortgagee. (a)
By acceptance of the benefits of this Mortgage, each of the
Secured Parties shall be deemed to have agreed to be bound by
25
<PAGE>
the terms hereof. The provisions of this Section 3.07 are,
and are intended, solely to establish certain rights as
between the Secured Parties and shall not create, and shall
not be construed as creating, any rights enforceable by the
Mortgagor, any Subsidiary or any Affiliate of the Mortgagor
(regardless of whether the Mortgagor, Subsidiary or Affiliate
is a Secured Party).
(b) By acceptance of the benefits of this Mortgage, each
of the Secured Parties shall be deemed irrevocably (i) to
consent to the appointment of the Mortgagee as its agent
hereunder, (ii) to confirm that the Mortgagee shall have the
authority to act as the exclusive agent of such Secured Party
for enforcement of any provisions of this Mortgage against the
Mortgagor or the exercise of remedies hereunder and (iii) to
agree that such Secured Party shall not take any action to
enforce any provisions of this Mortgage against the Mortgagor
or to exercise any remedy hereunder.
(c) The Mortgagee may act or refrain from acting
hereunder, and shall not incur any liability to the Secured
Parties for acting or refraining from acting hereunder, in
accordance with any such consent, direction or request of the
Required Lenders as shall be required or permitted under the
Credit Agreement. The Debenture Holders as Secured Parties
shall not be entitled to, and shall not, (i) direct the
actions of the Mortgagee hereunder, (ii) take any action, or
commence any legal proceeding seeking, to require, compel or
cause the Mortgagee to enforce any provisions of this Mortgage
against the Mortgagor or to exercise any remedy hereunder,
(iii) take any action, or commence any legal proceeding
seeking, to prevent or enjoin the Mortgagee from taking any
action (including, without limitation, the enforcement of any
provisions of this Mortgage against the Mortgagor, the
exercise of any remedy hereunder, the release of the Mortgaged
Property hereunder or the consent to any amendment or
modification of this Mortgage or the grant of any waiver
hereunder), or refraining from taking any such action, in
accordance with this Mortgage or (iv) take any action, or
commence any legal proceeding seeking, to delay, hinder or
otherwise impair the Mortgagee in taking any such action in
accordance with this Mortgage. By acceptance of the benefits
under this Mortgage, the Debenture Holders as Secured Parties
will be deemed to have acknowledged and agreed that the
provisions of the preceding sentence are intended to induce
the Lenders to permit the Debenture Holders to be Secured
Parties under this Mortgage and are being relied upon by the
Lenders as consideration therefor.
(d) THE MORTGAGEE HAS CONSENTED TO SERVE AS MORTGAGEE
HEREUNDER ON THE EXPRESS UNDERSTANDING, AND THE DEBENTURE
HOLDERS AS SECURED PARTIES, BY ACCEPTING THE BENEFITS OF THIS
26
<PAGE>
MORTGAGE, SHALL BE DEEMED TO HAVE AGREED, THAT THE MORTGAGEE
SHALL HAVE NO DUTY AND SHALL OWE NO OBLIGATION OR
RESPONSIBILITY (FIDUCIARY OR OTHERWISE) TO THE DEBENTURE
HOLDERS AS SECURED PARTIES, OTHER THAN THE DUTY TO PERFORM ITS
EXPRESS OBLIGATIONS UNDER THIS MORTGAGE IN ACCORDANCE WITH
THEIR TERMS, SUBJECT IN ALL EVENTS TO THE PROVISIONS OF THIS
MORTGAGE LIMITING THE RESPONSIBILITY OR LIABILITY OF THE
MORTGAGEE HEREUNDER.
(e) Each Secured Party shall, ratably in accordance with
the amount of the Obligations owed to it, indemnify the
Mortgagee (to the extent it shall not have been reimbursed by
the Mortgagor) against any expense or liability that the
Mortgagee would be entitled to recover from the Mortgagor
pursuant to this Mortgage. Any amount so owed by a Secured
Party can be withheld by the Mortgagee from any amount owed to
such Secured Party.
ARTICLE IV
Particular Provisions
This Mortgage is subject to the following provisions
relating to the particular laws of the state wherein the
Premises are located:
SECTION 4.01. Applicable Law; Certain Particular
Provisions. This Mortgage shall be governed by and construed
in accordance with the internal law of the State of New York;
provided, however, that the provisions of this Mortgage
relating to the creation, perfection and enforcement of the
lien and security interest created by this Mortgage in respect
of the Mortgaged Property and the exercise of each remedy
provided hereby, including the power of foreclosure or power
of sale procedures set forth in this Mortgage, shall be
governed by and construed in accordance with the internal law
of the state where the Mortgaged Property is located, and
Mortgagor and Mortgagee agrees to submit to jurisdiction and
the laying of venue for any suit on this Mortgage in such
state. The terms and provisions set forth in Appendix A
attached hereto are hereby incorporated by reference as though
fully set forth herein. In the event of any conflict between
the terms and provisions contained in the body of this
27
<PAGE>
Mortgage and the terms and provisions set forth in Appendix A,
the terms and provisions set forth in Appendix A shall govern
and control.
IN WITNESS WHEREOF, this Mortgage has been duly executed
and delivered to Mortgagee by Mortgagor on the date of the
acknowledgment attached hereto.
PHILLIPS-VAN HEUSEN
CORPORATION, a Delaware
corporation,
by
Name:
Title:
Attest:
by
____________________________
Name:
Title:
[Corporate Seal]
28
<PAGE>
[NEED LOCAL FORM OF ACKNOWLEDGMENT]
29
<PAGE>
Exhibit A
to Mortgage
Legal Description
<PAGE>
Schedule A
to Mortgage
Leases of Mortgaged Property
<PAGE>
Appendix A
to Mortgage
Local Law Provisions
____________________________________________________________
PHILLIPS-VAN HEUSEN CORPORATION
As Issuer
TO
UNION BANK OF CALIFORNIA, N.A.
As Trustee
________________
Indenture
Dated as of April 22, 1998
________________
$150,000,000
9 1/2% Senior Subordinated Notes due May 1, 2008
____________________________________________________________
<PAGE>
.....................................
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of August 7, 1997
Trust Indenture Indenture
Act Section Section
Sec. 310(a)(1) ............................... 609
(a)(2) ............................... 609
(a)(3) ............................... Not
Applicable
(a)(4) ............................... Not
Applicable
(b) ............................... 608
610
Sec. 311(a) ............................... 613(a)
(b) ............................... 613(b)
(b)(2) ............................... 703(a)(2)
703(b)
Sec. 312(a) ............................... 701
702(a)
(b) ............................... 702(b)
(c) ............................... 702(c)
Sec. 313(a) ............................... 703(a)
(b) ............................... 703(b)
(c) ............................... 703(a)
703(b)
(d) ............................... 703(c)
Sec. 314(a) ............................... 704
(b) ............................... Not
Applicable
(c)(1) ............................... 102
(c)(2) ............................... 102
(c)(3) ............................... Not
Applicable
(d) ............................... Not
Applicable
(e) ............................... 102
Sec. 315(a) ............................... 601(a)
(b) ............................... 602
703(a)(6)
(c) ............................... 601(b)
(d) ............................... 601(c)
(d)(1) ............................... 601(a)(1)
(d)(2) ............................... 601(c)(2)
(d)(3) ............................... 601(c)(3)
(e) ............................... 514
-i-
<PAGE>
Trust Indenture Indenture
Act Section Section
Sec. 316(a) ............................... 101
(a)(1)(A) ............................... 502
512
(a)(1)(B) ............................... 513
(a)(2) ............................... Not
Applicable
(b) ............................... 508
Sec. 317(a)(1) ............................... 503
(a)(2) ............................... 504
(b) ............................... 1003
Sec. 318(a) ............................... 107
______________
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
-ii-
<PAGE>
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . .1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . .1
Act. . . . . . . . . . . . . . . . . . . . . . . . . .2
Affiliate. . . . . . . . . . . . . . . . . . . . . . .2
Agent Member . . . . . . . . . . . . . . . . . . . . .3
Applicable Procedures. . . . . . . . . . . . . . . . .3
Asset Disposition. . . . . . . . . . . . . . . . . . .3
Board of Directors . . . . . . . . . . . . . . . . . .3
Board Resolution . . . . . . . . . . . . . . . . . . .3
Business Day . . . . . . . . . . . . . . . . . . . . .4
Capital Lease Obligation . . . . . . . . . . . . . . .4
Capital Stock. . . . . . . . . . . . . . . . . . . . .4
Cash Equivalents . . . . . . . . . . . . . . . . . . .4
Cedel. . . . . . . . . . . . . . . . . . . . . . . . .5
Closing Date . . . . . . . . . . . . . . . . . . . . .5
Commission . . . . . . . . . . . . . . . . . . . . . .5
Common Stock . . . . . . . . . . . . . . . . . . . . .5
Company. . . . . . . . . . . . . . . . . . . . . . . .5
Company Request/Company Order. . . . . . . . . . . . .5
Consolidated Cash Flow Available for Fixed Charges . .5
Consolidated Cash Flow Coverage Ratio. . . . . . . . .6
Consolidated Fixed Charges . . . . . . . . . . . . . .7
Consolidated Income Tax Expense. . . . . . . . . . . .7
Consolidated Interest Expense. . . . . . . . . . . . .7
Consolidated Net Income. . . . . . . . . . . . . . . .7
Consolidated Net Worth . . . . . . . . . . . . . . . .8
Consolidated Tangible Assets . . . . . . . . . . . . .8
Corporate Trust Office . . . . . . . . . . . . . . . .8
corporation. . . . . . . . . . . . . . . . . . . . . .9
Debt . . . . . . . . . . . . . . . . . . . . . . . . .9
Depositary . . . . . . . . . . . . . . . . . . . . . .9
Designated Senior Debt . . . . . . . . . . . . . . . 10
DTC. . . . . . . . . . . . . . . . . . . . . . . . . 10
Euroclear. . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . 10
Exchange and Registration Rights Agreement . . . . . 10
Exchange Notes . . . . . . . . . . . . . . . . . . . 10
Exchange Offer . . . . . . . . . . . . . . . . . . . 10
Exchange Registration Statement. . . . . . . . . . . 10
-iii-
<PAGE>
Page
Global Note. . . . . . . . . . . . . . . . . . . . . 11
Guarantee. . . . . . . . . . . . . . . . . . . . . . 11
Holder . . . . . . . . . . . . . . . . . . . . . . . 11
Incur. . . . . . . . . . . . . . . . . . . . . . . . 11
Indenture. . . . . . . . . . . . . . . . . . . . . . 11
Initial Purchasers . . . . . . . . . . . . . . . . . 12
Interest Payment Date. . . . . . . . . . . . . . . . 12
Interest Rate, Currency or Commodity Price
Agreement. . . . . . . . . . . . . . . . . . . . . . 12
Investment . . . . . . . . . . . . . . . . . . . . . 12
Lien . . . . . . . . . . . . . . . . . . . . . . . . 12
Maturity . . . . . . . . . . . . . . . . . . . . . . 12
Moody's. . . . . . . . . . . . . . . . . . . . . . . 13
Net Available Proceeds . . . . . . . . . . . . . . . 13
New Credit Facility. . . . . . . . . . . . . . . . . 14
Note Purchase Agreement. . . . . . . . . . . . . . . 14
Notes. . . . . . . . . . . . . . . . . . . . . . . . 14
Offer to Purchase. . . . . . . . . . . . . . . . . . 14
Officers' Certificate. . . . . . . . . . . . . . . . 17
Opinion of Counsel . . . . . . . . . . . . . . . . . 17
Original Notes . . . . . . . . . . . . . . . . . . . 17
Outstanding. . . . . . . . . . . . . . . . . . . . . 17
Paying Agent . . . . . . . . . . . . . . . . . . . . 18
Permitted Interest Rate, Currency or Commodity
Price Agreement. . . . . . . . . . . . . . . . . . . 18
Permitted Investments. . . . . . . . . . . . . . . . 19
Person . . . . . . . . . . . . . . . . . . . . . . . 19
Predecessor Note . . . . . . . . . . . . . . . . . . 19
Preferred Stock. . . . . . . . . . . . . . . . . . . 20
Public Equity Offering . . . . . . . . . . . . . . . 20
Receivables. . . . . . . . . . . . . . . . . . . . . 20
Receivables Sale . . . . . . . . . . . . . . . . . . 20
Redeemable Stock . . . . . . . . . . . . . . . . . . 20
Redemption Date. . . . . . . . . . . . . . . . . . . 20
Redemption Price . . . . . . . . . . . . . . . . . . 20
Registration Default . . . . . . . . . . . . . . . . 21
Registration Default Period. . . . . . . . . . . . . 21
Regulation S . . . . . . . . . . . . . . . . . . . . 21
Regulation S Certificate . . . . . . . . . . . . . . 21
Regulation S Global Note . . . . . . . . . . . . . . 21
Regulation S Legend. . . . . . . . . . . . . . . . . 21
Regulation S Notes . . . . . . . . . . . . . . . . . 21
Related Person . . . . . . . . . . . . . . . . . . . 22
Responsible Officer. . . . . . . . . . . . . . . . . 22
Restricted Notes . . . . . . . . . . . . . . . . . . 22
Restricted Notes Certificate . . . . . . . . . . . . 22
Restricted Notes Legend. . . . . . . . . . . . . . . 22
-iv-
<PAGE>
Page
Restricted Period. . . . . . . . . . . . . . . . . . 22
Restricted Subsidiary. . . . . . . . . . . . . . . . 22
Rule 144 . . . . . . . . . . . . . . . . . . . . . . 22
Rule 144A. . . . . . . . . . . . . . . . . . . . . . 23
Rule 144A Notes. . . . . . . . . . . . . . . . . . . 23
S&P. . . . . . . . . . . . . . . . . . . . . . . . . 23
Securities Act . . . . . . . . . . . . . . . . . . . 23
Security Register/Security Registrar . . . . . . . . 23
Senior Debt. . . . . . . . . . . . . . . . . . . . . 23
Shelf Registration Statement . . . . . . . . . . . . 24
Special Interest . . . . . . . . . . . . . . . . . . 24
Special Record Date. . . . . . . . . . . . . . . . . 24
Stated Maturity. . . . . . . . . . . . . . . . . . . 24
Subordinated Debt. . . . . . . . . . . . . . . . . . 24
Subsidiary . . . . . . . . . . . . . . . . . . . . . 25
Successor Note . . . . . . . . . . . . . . . . . . . 25
Temporary Cash Investments . . . . . . . . . . . . . 25
Trust Indenture Act. . . . . . . . . . . . . . . . . 27
Trustee. . . . . . . . . . . . . . . . . . . . . . . 27
2023 Debentures. . . . . . . . . . . . . . . . . . . 27
U.S. Person. . . . . . . . . . . . . . . . . . . . . 27
Vice President . . . . . . . . . . . . . . . . . . . 28
Voting Stock . . . . . . . . . . . . . . . . . . . . 28
Wholly Owned Restricted Subsidiary . . . . . . . . . 28
SECTION 102. Compliance Certificates and Opinions . . . 28
SECTION 103. Form of Documents Delivered to Trustee . . 29
SECTION 104. Acts of Holders; Record Date . . . . . . . 30
SECTION 105. Notices, Etc., to Trustee and Company. . . 31
SECTION 106. Notice to Holders; Waiver. . . . . . . . . 32
SECTION 107. Conflict with Trust Indenture Act. . . . . 33
SECTION 108. Effect of Headings and Table of Contents . 33
SECTION 109. Successors and Assigns . . . . . . . . . . 33
SECTION 110. Separability Clause. . . . . . . . . . . . 33
SECTION 111. Benefits of Indenture. . . . . . . . . . . 33
SECTION 112. Governing Law. . . . . . . . . . . . . . . 34
SECTION 113. Legal Holidays . . . . . . . . . . . . . . 34
-v-
<PAGE>
Page
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally; Initial Forms of Rule
144A and Regulation S Notes. . . . . . . . 34
SECTION 202. Form of Face of Note . . . . . . . . . . . 36
SECTION 203. Form of Reverse of Note. . . . . . . . . . 40
SECTION 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . 45
ARTICLE THREE
The Notes
SECTION 301. Title and Terms. . . . . . . . . . . . . . 46
SECTION 302. Denominations. . . . . . . . . . . . . . . 47
SECTION 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . 47
SECTION 304. Temporary Notes. . . . . . . . . . . . . . 49
SECTION 305. Global Notes . . . . . . . . . . . . . . . 49
SECTION 306. Registration, Registration of Transfer
and Exchange Generally; Restrictions
on Transfer and Exchange; Securities
Act Legends. . . . . . . . . . . . . . . . 51
SECTION 307. Mutilated, Destroyed, Lost and Stolen
Notes. . . . . . . . . . . . . . . . . . . 56
SECTION 308. Payment of Interest; Interest Rights
Preserved. . . . . . . . . . . . . . . . . 57
SECTION 309. Persons Deemed Owners. . . . . . . . . . . 59
SECTION 310. Cancellation . . . . . . . . . . . . . . . 60
SECTION 311. Computation of Interest. . . . . . . . . . 60
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. . 60
SECTION 402. Application of Trust Money . . . . . . . . 62
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . . . 62
-vi-
<PAGE>
Page
SECTION 502. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . . . 66
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . 67
SECTION 504. Trustee May File Proofs of Claim . . . . . 68
SECTION 505. Trustee May Enforce Claims Without
Possession of Notes. . . . . . . . . . . . 69
SECTION 506. Application of Money Collected . . . . . . 69
SECTION 507. Limitation on Suits. . . . . . . . . . . . 70
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . 71
SECTION 509. Restoration of Rights and Remedies . . . . 71
SECTION 510. Rights and Remedies Cumulative . . . . . . 71
SECTION 511. Delay or Omission Not Waiver . . . . . . . 72
SECTION 512. Control by Holders . . . . . . . . . . . . 72
SECTION 513. Waiver of Past Defaults. . . . . . . . . . 72
SECTION 514. Undertaking for Costs. . . . . . . . . . . 73
SECTION 515. Waiver of Stay or Extension Laws . . . . . 73
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. . . . 74
SECTION 602. Notice of Defaults . . . . . . . . . . . . 74
SECTION 603. Certain Rights of Trustee. . . . . . . . . 74
SECTION 604. Not Responsible for Recitals or
Issuance of Notes. . . . . . . . . . . . . 76
SECTION 605. May Hold Notes . . . . . . . . . . . . . . 76
SECTION 606. Money Held in Trust. . . . . . . . . . . . 77
SECTION 607. Compensation and Reimbursement . . . . . . 77
SECTION 608. Disqualification; Conflicting Interests. . 78
SECTION 609. Corporate Trustee Required; Eligibility. . 78
SECTION 610. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . 78
SECTION 611. Acceptance of Appointment by Successor . . 80
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 80
SECTION 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . 81
-vii-
<PAGE>
Page
ARTICLE SEVEN
Holders' Lists and Reports by
Trustee and Company
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . 81
SECTION 702. Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . 82
SECTION 703. Reports by Trustee . . . . . . . . . . . . 82
SECTION 704. Reports by Company . . . . . . . . . . . . 82
SECTION 705. Officers' Certificate with Respect to
Change in Interest Rates . . . . . . . . . 83
ARTICLE EIGHT
Consolidation, Merger, Conveyance,
Transfer or Lease
SECTION 801. Mergers, Consolidations and Certain
Transfers, Leases and Acquisition of
Assets . . . . . . . . . . . . . . . . . . 83
SECTION 802. Successor Substituted. . . . . . . . . . . 84
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders . . . . . . . . . . . . 85
SECTION 902. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . 86
SECTION 903. Execution of Supplemental Indentures . . . 87
SECTION 904. Effect of Supplemental Indentures. . . . . 87
SECTION 905. Conformity with Trust Indenture Act. . . . 88
SECTION 906. Reference in Notes to Supplemental
Indentures . . . . . . . . . . . . . . . . 88
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . 88
SECTION 1002. Maintenance of Office or Agency. . . . . . 88
SECTION 1003. Money for Note Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . 89
-viii-
<PAGE>
Page
SECTION 1004. Existence. . . . . . . . . . . . . . . . . 91
SECTION 1005. Maintenance of Properties. . . . . . . . . 91
SECTION 1006. Payment of Taxes and Other Claims. . . . . 91
SECTION 1007. Maintenance of Insurance . . . . . . . . . 92
SECTION 1008. Limitation on Consolidated Debt. . . . . . 92
SECTION 1009. Limitation on Senior Subordinated Debt . . 95
SECTION 1010. Limitation on Issuance of Guarantees
of Subordinated Debt . . . . . . . . . . . 95
SECTION 1011. Limitation on Liens. . . . . . . . . . . . 95
SECTION 1012. Limitation on Restricted Payments. . . . . 96
SECTION 1013. Limitations on Dividend and Other Payment
Restrictions Affecting Subsidiaries. . . . 98
SECTION 1014. Limitation on Asset Disposition. . . . . .100
SECTION 1015. Transactions with Affiliates and Related
Persons. . . . . . . . . . . . . . . . . .101
SECTION 1016. Change of Control. . . . . . . . . . . . .102
SECTION 1017. Provision of Financial Information . . . .103
SECTION 1018. Unrestricted Subsidiaries. . . . . . . . .103
SECTION 1019. Statement by Officers as to Default;
Compliance Certificates. . . . . . . . . .104
SECTION 1020. Waiver of Certain Covenants. . . . . . . .105
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Right of Redemption. . . . . . . . . . . .105
SECTION 1102. Applicability of Article . . . . . . . . .106
SECTION 1103. Election to Redeem; Notice to Trustee. . .106
SECTION 1104. Selection by Trustee of Notes to Be
Redeemed . . . . . . . . . . . . . . . . .106
SECTION 1105. Notice of Redemption . . . . . . . . . . .107
SECTION 1106. Deposit of Redemption Price. . . . . . . .108
SECTION 1107. Notes Payable on Redemption Date . . . . .108
SECTION 1108. Notes Redeemed in Part . . . . . . . . . .109
ARTICLE TWELVE
Subordination of Notes
SECTION 1201. Notes Subordinate to Senior Debt . . . . .109
SECTION 1202. Payment Over of Proceeds Upon
Dissolution, Etc.. . . . . . . . . . . . .109
SECTION 1203. No Payment When Senior Debt in Default . .111
SECTION 1204. Payment Permitted If No Default. . . . . .113
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Page
SECTION 1205. Subrogation to Rights of Holders of
Senior Debt. . . . . . . . . . . . . . . .113
SECTION 1206. Provisions Solely to Define Relative
Rights . . . . . . . . . . . . . . . . . .113
SECTION 1207. Trustee to Effectuate Subordination. . . .114
SECTION 1208. No Waiver of Subordination Provisions. . .114
SECTION 1209. Notice to Trustee. . . . . . . . . . . . .115
SECTION 1210. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . .116
SECTION 1211. Trustee Not Fiduciary for Holders of
Senior Debt. . . . . . . . . . . . . . . .116
SECTION 1212. Rights of Trustee as Holder of Senior
Debt; Preservation of Trustee's Rights . .117
SECTION 1213. Article Applicable to Paying Agents. . . .117
SECTION 1214. Defeasance of this Article Twelve. . . . .117
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
SECTION 1301. Company's Option to Effect Defeasance or
Covenant Defeasance. . . . . . . . . . . .118
SECTION 1302. Defeasance and Discharge . . . . . . . . .118
SECTION 1303. Covenant Defeasance. . . . . . . . . . . .119
SECTION 1304. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . .119
SECTION 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions . . . . . .122
SECTION 1306. Reinstatement. . . . . . . . . . . . . . .123
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ANNEX A -- Form of Regulation S Certificate. . . . . . . . 1
ANNEX B -- Form of Restricted Securities Certificate. . . .1
ANNEX C -- Form of Unrestricted Securities Certificate. . .1
ANNEX D -- Form of Certification to be Given by Holders of
Beneficial Interest in a Regulation S Temporary Global
Note. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ANNEX E -- Form of Certification to be Given by the
Euroclear Operator or Cedel S.A.. . . . . . . . . . . . . .1
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INDENTURE, dated as of April 22, 1998, between
Phillips-Van Heusen Corporation, a corporation duly
organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal
office at 1290 Avenue of the Americas, New York, New York
10104 and Union Bank of California, N.A., a national banking
association duly organized and existing under the laws of
the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an
issue of its 9 1/2% Senior Subordinated Notes due May 1, 2008
(the "Notes") of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this
Indenture.
All things necessary (i) to make the Notes, when
executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid
obligations of the Company and (ii) to make this Indenture a
valid agreement of the Company, all in accordance with their
respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Notes by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
<PAGE>
(1) the terms defined in this Article have
the meanings assigned to them in this Article and
include the plural as well as the singular;
(2) all other terms used herein which are
defined in the Trust Indenture Act, either
directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise
defined herein have the meanings assigned to them
in accordance with generally accepted accounting
principles (whether or not such is indicated
herein), and, except as otherwise herein expressly
provided, the term "generally accepted accounting
principles" or GAAP with respect to any
computation required or permitted hereunder shall
mean such accounting principles as are generally
accepted as consistently applied by the Company at
the date of such computation;
(4) unless otherwise specifically set forth
herein, all calculations or determinations of a
Person shall be performed or made on a
consolidated basis in accordance with generally
accepted accounting principles; and
(5) the words "herein", "hereof" and
"hereunder" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six,
are defined in that Article.
"Act", when used with respect to any Holder, has
the meaning specified in Section 104.
"Affiliate" of any Person means any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the
purposes of this definition, "control" when used with respect
to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
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"Agent Member" means any member of, or participant
in, the Depositary.
"Applicable Procedures" means, with respect to any
transfer or transaction involving a Global Note or
beneficial interest therein, the rules and procedures of the
Depositary for such Note, Euroclear and Cedel, in each case
to the extent applicable to such transaction and as in
effect at the time of such transfer or transaction.
"Asset Disposition" by any Person means any transfer,
conveyance, sale, lease or other disposition by such
Person or any of its Restricted Subsidiaries (including any
issuance or sale by a Restricted Subsidiary of Capital Stock
of such Restricted Subsidiary, and including a consolidation
or merger or other sale of any such Restricted Subsidiary
with, into or to another Person in a transaction in which
such Restricted Subsidiary ceases to be a Restricted Subsidiary,
but excluding a disposition by a Restricted Subsidiary
of such Person to such Person or a Wholly Owned Restricted
Subsidiary of such Person or by such Person to a Wholly
Owned Restricted Subsidiary of such Person) of (i) shares of
Capital Stock (other than directors' qualifying shares) or
other ownership interests of a Restricted Subsidiary of such
Person, (ii) substantially all of the assets of such Person
or any of its Restricted Subsidiaries representing a division
or line of business or (iii) other assets or rights of
such Person or any of its Restricted Subsidiaries outside of
the ordinary course of business, provided in each case that
the aggregate consideration to the Company or Restricted
Subsidiary in any single transaction or series of related
transactions for such transfer, conveyance, sale, lease or
other disposition is equal to $20.0 million or more.
"Board of Directors" means either the board of
directors of the Company or any duly authorized committee of
that board. Except as otherwise provided or unless context
otherwise requires, each reference herein to the "Board of
Directors" shall mean the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Trustee. Except as
otherwise expressly provided or unless the context otherwise
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requires, each reference herein to a "Board Resolution"
shall mean a Board Resolution of the Company.
"Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York, New York or in the city in
which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means the
obligation to pay rent or other payment amounts under a
lease of (or other Debt arrangements conveying the right to
use) real or personal property of such Person which is
required to be classified and accounted for as a capital
lease or a liability on the face of a balance sheet of such
Person in accordance with generally accepted accounting
principles. The stated maturity of such obligation shall be
the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a
penalty. The principal amount of such obligation shall be
the capitalized amount thereof that would appear on the face
of a balance sheet of such Person in accordance with
generally accepted accounting principles.
"Capital Stock" of any Person means any and all
shares, interests, participations or other equivalents
(however designated) of corporate stock or other equity
participations, including partnership interests, whether
general or limited, of such Person.
"Cash Equivalents" means (i) direct obligations of
the United States of America or any agency thereof having
maturities of not more than one year from the date of
acquisition, (ii) time deposits and certificates of deposit
of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500 million, with
maturities of not more than one year from the date of
acquisition, (iii) repurchase obligations issued by any bank
described in clause (ii) above with a term not to exceed
30 days; (iv) commercial paper rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, in each case maturing within one year
after the date of acquisition and (v) shares of any money
market mutual fund, or similar fund, in each case having
assets in excess of $500 million, which invests
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predominantly in investments of the types describes in
clauses (i) through (iv) above.
"Cedel" means Cedel, S.A. (or any successor
securities clearing agency).
"Closing Date" means April 22, 1998.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Exchange Act, or, if at any time after the execution of
this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such
time.
"Common Stock" of any Person means Capital Stock
of such Person that does not rank prior, as to the payment
of dividends or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other
class of such Person.
"Company" means the Person named as the "Company"
in the first paragraph of this instrument until a successor
Person shall have become such pursuant to the applicable
provisions of this Indenture and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a
written request or order signed in the name of the Company
by its Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary and delivered to the
Trustee.
"Consolidated Cash Flow Available for Fixed
Charges" means for any period the Consolidated Net Income of
the Company and its Restricted Subsidiaries for such period
increased by the sum of (i) Consolidated Interest Expense of
the Company and its Restricted Subsidiaries for such period,
plus (ii) Consolidated Income Tax Expense of the Company and
its Restricted Subsidiaries for such period, plus (iii) the
consolidated depreciation and amortization expense included
in the income statement of the Company and its Restricted
Subsidiaries for such period, plus (iv) all other non-cash
items reducing Consolidated Net Income of the Company and
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its Restricted Subsidiaries, less all non-cash items
increasing Consolidated Net Income of the Company and its
Restricted Subsidiaries; provided, however, that there shall
be excluded therefrom the Consolidated Cash Flow Available
for Fixed Charges (if positive) of any Restricted Subsidiary
of the Company (calculated separately for such Restricted
Subsidiary in the same manner as provided above for the
Company) that is subject to a restriction which prevents the
payment of dividends or the making of distributions to the
Company or another Restricted Subsidiary of the Company to
the extent of such restriction.
"Consolidated Cash Flow Coverage Ratio" as of any
date of determination means the ratio of (i) Consolidated
Cash Flow Available for Fixed Charges of the Company and its
Restricted Subsidiaries for the period of the most recently
completed four consecutive fiscal quarters for which
quarterly or annual financial statements are available to
(ii) Consolidated Fixed Charges of the Company and its
Restricted Subsidiaries for such period; provided, however,
that Consolidated Fixed Charges shall be adjusted to give
effect on a pro forma basis to any Debt (other than short-
term Debt Incurred for working capital purposes) that has
been Incurred by the Company or any Restricted Subsidiary
since the beginning of such period that remains outstanding
and to any Debt (other than short-term Debt Incurred for
working capital purposes) that is proposed to be Incurred by
the Company or any Restricted Subsidiary as if in each case
such Debt had been Incurred on the first day of such period
and as if any Debt (other than short-term Debt Incurred for
working capital purposes) that (i) is or will no longer be
outstanding as the result of the Incurrence of any such Debt
or (ii) had been repaid or retired during such period had
not been outstanding as of the first day of such period;
provided further that in making such computation, the
Consolidated Interest Expense of the Company and its
Restricted Subsidiaries attributable to interest on any
proposed Debt bearing a floating interest rate shall be
computed on a pro forma basis as if the rate in effect on
the date of computation had been the applicable rate for the
entire period; and provided further that, in the event the
Company or any of its Restricted Subsidiaries has made Asset
Dispositions or acquisitions of assets not in the ordinary
course of business (including acquisitions of other Persons
by merger, consolidation or purchase of Capital Stock)
during or after such period, such computation shall be made
on a pro forma basis as if the Asset Dispositions or
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acquisitions had taken place on the first day of such
period.
"Consolidated Fixed Charges" for any period means
the sum of (i) Consolidated Interest Expense and (ii) the
consolidated amount of interest capitalized by the Company
and its Restricted Subsidiaries during such period
calculated in accordance with generally accepted accounting
principles.
"Consolidated Income Tax Expense" for any period
means the consolidated provision for income taxes of the
Company and its Restricted Subsidiaries for such period
calculated on a consolidated basis in accordance with
generally accepted accounting principles.
"Consolidated Interest Expense" means for any
period the consolidated interest expense included in a
consolidated income statement (without deduction of interest
income) of the Company and its Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance
with generally accepted accounting principles, including
without limitation or duplication (or, to the extent not so
included, with the addition of), (i) the amortization of
Debt discounts; (ii) any payments or fees with respect to
letters of credit, bankers' acceptances or similar facilities;
(iii) fees with respect to Interest Rate, Currency or
Commodity Price Agreements; (iv) Preferred Stock dividends
of Restricted Subsidiaries of the Company (other than with
respect to Redeemable Stock) declared and paid or payable to
persons other than the Company or any Restricted Subsidiary;
(v) accrued Redeemable Stock dividends of the Company and
its Restricted Subsidiaries payable to persons other than
the Company or any Restricted Subsidiary, whether or not
declared or paid; (vi) interest on Debt guaranteed by the
Company and its Restricted Subsidiaries; and (vii) the
portion of any rental obligation with respect to capitalized
leases allocable to interest expense.
"Consolidated Net Income" for any period means the
consolidated net income (or loss) of the Company and its
Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted
accounting principles; provided that there shall be excluded
therefrom (a) the net income (or loss) of any Person
acquired by the Company or a Restricted Subsidiary of the
Company in a pooling-of-interests transaction for any period
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<PAGE>
prior to the date of such transaction, (b) the net income
(or loss) of any Person that is not a Subsidiary of the
Company except to the extent of the amount of dividends or
other distributions actually paid to the Company or a
Subsidiary of the Company by such Person during such period,
(c) gains or losses on Asset Dispositions by the Company or
its Restricted Subsidiaries, (d) all extraordinary gains and
extraordinary losses, (e) the cumulative effect of changes
in accounting principles and (f) the tax effect, if any, of
any of the items described in clauses (a) through (e) above;
provided, further, that for purposes of any determination
pursuant to the provisions described under Section 1012
hereof, there shall further be excluded therefrom the net
income (but not net loss) of any Restricted Subsidiary of
the Company that is subject to a restriction which prevents
the payment of dividends or the making of distributions to
the Company or another Restricted Subsidiary of the Company
to the extent of such restriction.
"Consolidated Net Worth" of any Person means the
consolidated stockholders' equity of such Person, determined
on a consolidated basis in accordance with generally
accepted accounting principles, less amounts attributable to
Redeemable Stock of such Person; provided that, with respect
to the Company, adjustments following the date of this
Indenture to the accounting books and records of the Company
in accordance with Accounting Principles Board Opinions
Nos. 16 and 17 (or successor opinions thereto) or otherwise
resulting from the acquisition of control of the Company by
another Person shall not be given effect to.
"Consolidated Tangible Assets" of any Person
means, as of any date, the amount which, in accordance with
GAAP, would be set forth under the caption "Total Assets"
(or any like caption) on a consolidated balance sheet of
such Person and its Restricted Subsidiaries, less all
intangible assets, including, without limitation, goodwill,
organization costs, patents, trademarks, copyrights,
franchises, and research and development costs.
"Corporate Trust Office" means the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which is, at
the date as of which this Indenture is dated, located at 475
Sansome Street, 12th Floor, San Francisco, California 94111.
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<PAGE>
"corporation" means a corporation, association,
company, joint-stock company, partnership or business trust.
"Debt" means (without duplication), with respect
to any Person, whether recourse is to all or a portion of
the assets of such Person and whether or not contingent,
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including
obligations Incurred in connection with the acquisition of
property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the
account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property
or services (including securities repurchase agreements but
excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person, (vi) all
Receivables Sales of such Person, together with any
obligation of such Person to pay any discount, interest,
fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith, (vii) all Redeemable Stock
issued by such Person, (viii) Preferred Stock of Restricted
Subsidiaries of such Person held by Persons other than such
Person or one of its Wholly Owned Restricted Subsidiaries,
(ix) every obligation under Interest Rate, Currency or
Commodity Price Agreements of such Person and (x) every
obligation of the type referred to in clauses (i) through
(ix) of another Person and all dividends of another Person
the payment of which, in either case, such Person has
Guaranteed or is responsible or liable for, directly or
indirectly, as obligor, Guarantor or otherwise. The
"amount" or "principal amount" of Debt at any time of
determination as used herein represented by (a) any
Receivables Sale, shall be the amount of the unrecovered
capital or principal investment of the purchaser (other than
the Company or a Wholly Owned Restricted Subsidiary of the
Company) thereof, excluding amounts representative of yield
or interest earned on such investment and (b) any Redeemable
Stock, shall be the maximum fixed redemption or repurchase
price in respect thereof.
"Depositary" means, with respect to any Notes, a
clearing agency that is registered as such under the
Exchange Act and is designated by the Company to act as
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Depositary for such Notes (or any successor securities
clearing agency so registered).
"Designated Senior Debt" shall mean (i) so long as
the New Credit Facility is in effect, the obligations of the
Company under the New Credit Facility and (ii) at any time
thereafter, the 2023 Debentures and any other Senior Debt of
the Company permitted under this Indenture, the principal
amount of which at original issuance is $25.0 million or
more and that has been designated by the Company as
Designated Senior Debt.
"DTC" means The Depository Trust Company, a New
York corporation.
"Euroclear" means the Euroclear Clearance System
(or any successor securities clearing agency).
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act
of 1934 as it may be amended and any successor act thereto.
"Exchange and Registration Rights Agreement" means
the Exchange and Registration Rights Agreement, dated as of
April 22, 1998, among the Company, Goldman, Sachs & Co.,
Chase Securities Inc. and Citicorp Securities, Inc., as
representatives of the Initial Purchasers, and the Holders
from time to time as provided therein, as such agreement may
be amended from time to time.
"Exchange Notes" means the Notes issued pursuant
to the Exchange Offer and their Successor Notes.
"Exchange Offer" means an offer made by the
Company pursuant to the Exchange and Registration Rights
Agreement under the effective registration statement under
the Securities Act to exchange securities substantially
identical to Outstanding Notes (except for the differences
provided for herein) for Outstanding Notes.
"Exchange Registration Statement" means a
registration statement of the Company under the Securities
Act registering Exchange Notes for distribution pursuant to
the Exchange Offer.
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"Global Note" means a Note that is registered in
the Security Register in the name of a Depositary or a
nominee thereof.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person guaranteeing, or
having the economic effect of guaranteeing, any Debt of any
other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation,
any obligation of such Person, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such
Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the
purpose of assuring the holder of such Debt of the payment
of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor
to pay such Debt (and "Guaranteed", "Guaranteeing" and
"Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any
Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary
course of business.
"Holder" means a Person in whose name a Note is
registered in the Security Register.
"Incur" means, with respect to any Debt or other
obligation of any Person, to create, issue, incur (by
conversion, exchange or otherwise), assume, Guarantee or
otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of
any such Debt or other obligation on the balance sheet of
such Person (and "Incurrence", "Incurred", "Incurrable" and
"Incurring" shall have meanings correlative to the
foregoing); provided, however, that a change in generally
accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall
not be deemed an Incurrence of such Debt.
"Indenture" means this instrument as originally
executed and as it may from time to time be supplemented or
amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof
including, for all purposes of this instrument and any such
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supplemental indenture, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means Goldman, Sachs & Co.,
Chase Securities Inc. and Citicorp Securities, Inc., as
purchasers of the Notes from the Company pursuant to the
Note Purchase Agreement.
"Interest Payment Date" means the Stated Maturity
of an installment of interest on the Notes.
"Interest Rate, Currency or Commodity Price
Agreement" of any Person means any forward contract, futures
contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors,
collars and similar agreements) relating to, or the value of
which is dependent upon, interest rates, currency exchange
rates or commodity prices or indices (excluding contracts
for the purchase or sale of goods in the ordinary course of
business).
"Investment" by any Person means any direct or
indirect loan, advance or other extension of credit or
capital contribution to (by means of transfers of cash or
other property to others or payments for property or
services for the account or use of others, or otherwise) to,
or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by
any other Person, including any payment on a Guarantee of
any obligation of such other Person.
"Lien" means, with respect to any property or
assets, any mortgage or deed of trust, pledge, hypothecation,
assignment, Receivables Sale, deposit arrangement,
security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or
assets (including, without limitation, any conditional sale
or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Maturity", when used with respect to any Note,
means the date on which the principal of such Note becomes
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due and payable as therein or herein provided, whether at
the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc.
"Net Available Proceeds" from any Asset Disposi-
tion by any Person means cash or readily marketable cash
equivalents received (including by way of sale or discount-
ing of a note, installment receivable or other receivable,
but excluding any other consideration received in the form
of assumption by the acquiree of Debt or other obligations
relating to such properties or assets) therefrom by such
Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses Incurred
and all federal, state, provincial, foreign and local taxes
required to be accrued as a liability as a consequence of
such Asset Disposition, (ii) all payments made by such
Person or its Restricted Subsidiaries on any Debt which is
secured by such assets in accordance with the terms of any
Lien upon or with respect to such assets or which must by
the terms of such Lien, or in order to obtain a necessary
consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person
or joint ventures as a result of such Asset Disposition and
(iv) appropriate amounts to be provided by such Person or
any Restricted Subsidiary thereof, as the case may be, as a
reserve in accordance with generally accepted accounting
principles against any liabilities associated with such
assets and retained by such Person or any Restricted
Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities
under any indemnification obligations and severance and
other employee termination costs associated with such Asset
Disposition, in each case as determined by the Board of
Directors, in its reasonable good faith judgment evidenced
by a resolution of the Board of Directors filed with the
Trustee; provided, however, that any reduction in such
reserve following the consummation of such Asset Disposition
will be treated for all purposes of the Indenture and the
Notes as a new Asset Disposition at the time of such
reduction with Net Available Proceeds equal to the amount of
such reduction.
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"New Credit Facility" means the senior secured
revolving credit facility in the aggregate principal amount
of $325.0 million between the Company, The Chase Manhattan
Bank, as administrative and collateral agent, Citibank USA,
Inc., as documentation agent, and certain other lenders, as
it may be amended or restated from time to time, and any
renewal, extension, refinancing, refunding or replacement
thereof, in whole or in part.
"Note Purchase Agreement" means the Purchase
Agreement, dated as of April 22, 1998, between the Company
and the Initial Purchasers, as such agreement may be amended
from time to time.
"Notes" means notes designated in the first
paragraph of the RECITALS OF THE COMPANY and includes the
Exchange Notes.
"Offer to Purchase" means a written offer (the
"Offer") sent by the Company by first class mail, postage
prepaid, to each Holder at his address appearing in the
Security Register on the date of the Offer offering to
purchase up to the principal amount of Notes specified in
such Offer at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise
required by applicable law, the Offer shall specify an
expiration date (the "Expiration Date") of the Offer to
Purchase which shall be, subject to any contrary
requirements of applicable law, not less than 30 days or
more than 60 days after the date of such Offer and a
settlement date (the "Purchase Date") for purchase of Notes
within five Business Days after the Expiration Date. The
Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee)
prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall
be mailed by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
The Offer shall contain information concerning the business
of the Company and its Restricted Subsidiaries which the
Company in good faith believes will enable such Holders to
make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most
recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in the documents
required to be filed with the Trustee pursuant to
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Section 1017 (which requirements may be satisfied by
delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's
business subsequent to the date of the latest of such
financial statements referred to in clause (i) (including a
description of the events requiring the Company to make the
Offer to Purchase), (iii) if applicable, appropriate pro
forma financial information concerning the Offer to Purchase
and the events requiring the Company to make the Offer to
Purchase and (iv) any other information required by
applicable law to be included therein. The Offer shall
contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Offer to
Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant
to which the Offer to Purchase is being made;
(2) the Expiration Date and the Purchase
Date;
(3) the aggregate principal amount of the
Outstanding Notes offered to be purchased by the
Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which
such has been determined pursuant to the Section
hereof requiring the Offer to Purchase) (the
"Purchase Amount");
(4) the purchase price to be paid by the
Company for each $1,000 aggregate principal amount
of Notes accepted for payment (as specified
pursuant to this Indenture) (the "Purchase
Price");
(5) that the Holder may tender all or any
portion of the Notes registered in the name of
such Holder and that any portion of a Note
tendered must be tendered in an integral multiple
of $1,000 principal amount;
(6) the place or places where Notes are to
be surrendered for tender pursuant to the Offer to
Purchase;
(7) that interest on any Note not tendered
or tendered but not purchased by the Company
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pursuant to the Offer to Purchase will continue to
accrue;
(8) that on the Purchase Date the Purchase
Price will become due and payable upon each Note
accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(9) that each Holder electing to tender a
Note pursuant to the Offer to Purchase will be
required to surrender such Note at the place or
places specified in the Offer prior to the close
of business on the Expiration Date (such Note
being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in
writing);
(10) that Holders will be entitled to
withdraw all or any portion of Notes tendered if
the Company (or their Paying Agent) receives, not
later than the close of business on the Expiration
Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the
principal amount of the Note the Holder tendered,
the certificate number of the Note the Holder
tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate
principal amount less than or equal to the
Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the
Company shall purchase all such Notes and (b) if
Notes in an aggregate principal amount in excess
of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the
Company shall purchase Notes having an aggregate
principal amount equal to the Purchase Amount on a
pro rata basis (with such adjustments as may be
deemed appropriate so that only Notes in
denominations of $1,000 or integral multiples
thereof shall be purchased); and
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(12) that in the case of any Holder whose
Note is purchased only in part, the Company shall
execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service
charge, a new Note or Notes, of any authorized
denomination as requested by such Holder, in an
aggregate principal amount equal to and in
exchange for the unpurchased portion of the Note
so tendered.
Any Offer to Purchase shall be governed by and effected in
accordance with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. Unless the context otherwise
requires, each reference herein to an "Officers'
Certificate" shall mean an Officers' Certificate of the
Company.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, and who shall
be reasonably acceptable to the Trustee.
"Original Notes" means all Notes other than
Exchange Notes.
"Outstanding", when used with respect to Notes,
means, as of the date of determination, all Notes there-
tofore authenticated and delivered under this Indenture,
except:
(i) Notes theretofore canceled by the
Trustee or delivered to the Trustee for
cancellation;
(ii) Notes for whose payment or redemption
money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders
of such Notes; provided that, if such Notes are to
be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision
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therefor satisfactory to the Trustee has been
made; and
(iii) Notes which have been transferred
pursuant to Section 306 or in exchange for or in
lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, other
than any such Notes in respect of which there
shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a
bona fide purchaser in whose hands such Notes are
valid obligations of the Company;
provided, however, that in determining whether the Holders
of the requisite principal amount of the Outstanding Notes
have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the
Company or any Affiliate of the Company shall be disregarded
and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the
Trustee knows to be so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the
Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the
Company to pay the principal of (and premium, if any) or
interest on any Notes on behalf of the Company.
"Permitted Interest Rate, Currency or Commodity
Price Agreement" of any Person means any Interest Rate,
Currency or Commodity Price Agreement entered into with one
or more financial institutions in the ordinary course of
business that is designed to protect such Person against
fluctuations in interest rates or currency exchange rates
with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with
respect to the Debt being hedged thereby, or in the case of
currency or commodity protection agreements, against currency
exchange rate or commodity price fluctuations in the
ordinary course of business relating to then existing
financial obligations or then existing or forecast production
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or for purchase of products for resale and not for
purposes of speculation.
"Permitted Investments" means (i) an Investment in
the Company or a Wholly-Owned Restricted Subsidiary of the
Company; (ii) an Investment in Pyramid Sportswear; provided,
however, that as a result thereof the Company owns not less
than a majority interest in Pyramid Sportswear; (iii) an
Investment in a Person, if such Person or a Subsidiary of
such Person will, as a result of the making of such
Investment and all other contemporaneous related
transactions, become a Wholly-Owned Restricted Subsidiary of
the Company or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to
the Company or a Wholly-Owned Restricted Subsidiary of the
Company; (iv) a Temporary Cash Investment; (v) stock,
obligations or securities received in settlement of debts
owing to the Company or a Restricted Subsidiary of the
Company as a result of bankruptcy or insolvency proceedings
or upon the foreclosure, perfection, enforcement or agree-
ment in lieu of foreclosure of any Lien in favor of the
Company or a Restricted Subsidiary of the Company;
(vi) Investments in the Notes; (vii) Investments in Permit-
ted Interest Rate, Currency or Commodity Price Agreements;
(viii) advances to employees of the Company made in the
ordinary course of business and (ix) entry into and
Investments in joint ventures, partnerships and other
Persons engaged or proposing to engage in businesses related
to those conducted by the Company or any Restricted
Subsidiary of the Company, in an amount not to exceed
$15 million.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company,
trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Note" of any particular Note means
every previous Note evidencing all or a portion of the same
debt as that evidenced by such particular Note; and, for the
purposes of this definition, any Note authenticated and
delivered under Section 307 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or
stolen Note.
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"Preferred Stock", of any Person, means Capital
Stock of such Person of any class or classes (however
designated) that ranks prior, as to the payment of dividends
or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of
such Person.
"Public Equity Offering" means an underwritten
primary public offering of Common Stock of the Company
pursuant to an effective registration statement under the
Securities Act of 1933, as amended.
"Receivables" means receivables, chattel paper,
instruments, documents or intangibles evidencing or relating
to the right to payment of money.
"Receivables Sale" of any Person means any sale of
Receivables of such Person (pursuant to a purchase facility
or otherwise), other than in connection with a disposition
of the business operations of such Person relating thereto
or a disposition of defaulted Receivables for purposes of
collection and not as a financing arrangement.
"Redeemable Stock" of any Person means any Capital
Stock of such Person that by its terms (or by the terms of
any security into which it is convertible or for which it is
exchangeable) or otherwise (including upon the occurrence of
an event) matures or is required to be redeemed (pursuant to
any sinking fund obligation or otherwise) or is convertible
into or exchangeable for Debt or is redeemable at the option
of the holder thereof, in whole or in part, at any time
prior to the final Stated Maturity of the Notes; provided
that "Redeemable Stock" shall not include any Capital Stock
that is payable at maturity, or upon required redemption or
redemption at the option of the holder thereof, or that is
automatically convertible or exchangeable, solely in or into
Common Stock of such Person.
"Redemption Date", when used with respect to any
Note to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Note to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.
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"Registration Default" means the occurrence of any
of the following events: (i) the Company has not filed the
Exchange Registration Statement or Shelf Registration
Statement on or before the date on which such registration
statement is required to be filed pursuant to the Exchange
and Registration Rights Agreement, (ii) the Exchange
Registration Statement or Shelf Registration Statement has
not become effective or been declared effective by the
Commission on or before the date on which such registration
statement is required to become or be declared effective
under the requirements of the Exchange and Registration
Rights Agreement, (iii) the Exchange Offer has not been
completed within 30 Business Days after the initial
effective date of the Exchange Registration Statement
relating to the Exchange Offer (if the Exchange Offer is
then required to be made under the Exchange and Registration
Rights Agreement) or (iv) any Exchange Registration
Statement or Shelf Registration Statement required to be
filed pursuant the Exchange and Registration Rights
Agreement is filed and declared effective but shall
thereafter either be withdrawn by the Company or shall
become subject to an effective stop order issued pursuant to
Section 8(d) of the Securities Act suspending the
effectiveness of such registration statement (except as
specifically permitted herein) without being succeeded
immediately by an additional registration statement filed
and declared effective.
"Registration Default Period" means any period
during which a Registration Default has occurred and is
continuing.
"Regulation S" means Regulation S under the
Securities Act.
"Regulation S Certificate" means a certificate
substantially in the form set forth in Annex A.
"Regulation S Global Note" has the meaning
specified in Section 201.
"Regulation S Legend" means a legend substantially
in the form of the legend required in the form of Note set
forth in Section 202 to be placed upon Regulation S Notes.
"Regulation S Notes" means all Notes required
pursuant to Section 306(c) to bear a Regulation S Legend.
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"Related Person" of any Person means any other
Person directly or indirectly owning (a) 5% or more of the
Outstanding Common Stock of such Person (or in the case of a
Person that is not a corporation, 5% or more of the equity
interest in such Person) or (b) 5% or more of the combined
voting power of the Voting Stock of such Person.
"Responsible Officer", when used with respect to
the Trustee, means the chairman or any vice-chairman of the
board of directors, the chairman or any vice-chairman of the
executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president,
the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller or
any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Notes" means all Notes required
pursuant to Section 306(c) to bear a Restricted Notes
Legend. Such term includes the Restricted Global Notes.
"Restricted Notes Certificate" means a certificate
substantially in for form set forth in Annex B.
"Restricted Notes Legend" means a legend
substantially in the form of the legend required in the form
of Note set forth in Section 202 to be placed upon a
Restricted Note.
"Restricted Period" means the period of 40
consecutive days beginning on the later of (i) the day on
which Notes are first offered to persons other than
distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the Closing Date.
"Restricted Subsidiary" means any Subsidiary,
whether existing on or after the date of this Indenture,
unless such Subsidiary is an Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act.
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"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Notes" means the Notes purchased by the
Initial Purchasers from the Company pursuant to the Note
Purchase Agreement, other than the Regulation S Notes.
"S&P" means Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc.
"Securities Act" means the Securities Act of 1933,
as it may be amended and any successor act thereto.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 306(a).
"Senior Debt" means (i) the principal of (and
premium, if any) and interest (including interest accruing
on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding)
on, and penalties and any obligation of the Company for
reimbursement, indemnities, fees and expenses relating to,
the New Credit Facility and (ii) every reimbursement
obligation of the Company with respect to letters of credit,
bankers' acceptances or similar facilities issued for the
account of the Company and (iii) the principal of (and pre-
mium, if any) and interest on Debt of the Company for money
borrowed, whether Incurred on or prior to the date of
original issuance of the Notes or thereafter, and any
amendments, renewals, extensions, modifications, refinanc-
ings and refundings of any such Debt and (iv) Permitted
Interest Rate, Currency or Commodity Price Agreements
entered into with respect to Debt described in clauses (i),
(ii) and (iii) above; provided, however, that the following
shall not constitute Senior Debt: (1) any Debt as to which
the terms of the instrument creating or evidencing the same
provide that such Debt is not superior in right of payment
to the Notes, (2) any Debt which is subordinated in right of
payment in any respect to any other Debt of the Company,
(3) Debt evidenced by the Notes, (4) any Debt owed to a
Person when such Person is a Subsidiary of the Company,
(5) any obligation of the Company arising from Redeemable
Stock of the Company, (6) that portion of any Debt which is
Incurred in violation of the Indenture and (7) Debt which,
when Incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without
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recourse to the Company. If any Senior Debt is disallowed,
avoided or subordinated pursuant to the provisions of
Section 548 of Title 11, United States Code, or any
applicable state fraudulent conveyance law, such Senior Debt
nevertheless will constitute Senior Debt.
"Shelf Registration Statement" means a shelf
registration statement under the Securities Act filed by the
Company, if required by, and meeting the requirements of,
the Exchange and Registration Rights Agreement, registering
Original Notes for resale.
"Special Interest" has the meaning specified in
the form of Notes set forth in Section 202.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by Trustee pursuant to
Section 308.
"Stated Maturity", when used with respect to any
Note or any installment of interest thereon, means the date
specified in such Note as the fixed date on which the
principal of such Note or such installment of interest is
due and payable.
"Subordinated Debt" means Debt of the Company as
to which the payment of principal of (and premium, if any)
and interest and other payment obligations in respect of
such Debt shall be subordinate to the prior payment in full
of the Notes to at least the following extent: (i) no
payments of principal of (or premium, if any) or interest on
or otherwise due in respect of such Debt may be permitted
for so long as any default in the payment of principal (or
premium, if any) or interest on the Notes exists; (ii) in
the event that any other default that with the passing of
time or the giving of notice, or both, would constitute an
event of default exists with respect to the Notes, upon
notice by 25% or more in principal amount of the Notes to
the Trustee, the Trustee shall have the right to give notice
to the Company and the holders of such Debt (or trustees or
agents therefor) of a payment blockage, and thereafter no
payments of principal of (or premium, if any) or interest on
or otherwise due in respect of such Debt may be made for a
period of 179 days from the date of such notice; and
(iii) such Debt may not (x) provide for payments of
principal of such Debt at the stated maturity thereof or by
way of a sinking fund applicable thereto or by way of any
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mandatory redemption, defeasance, retirement or repurchase
thereof by the Company (including any redemption, retirement
or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by
virtue of acceleration of such Debt upon an event of default
thereunder), in each case prior to the final Stated Maturity
of the Notes or (y) permit redemption or other retirement
(including pursuant to an offer to purchase made by the
Company) of such other Debt at the option of the holder
thereof prior to the final Stated Maturity of the Notes,
other than a redemption or other retirement at the option of
the holder of such Debt (including pursuant to an offer to
purchase made by the Company) which is conditioned upon a
change of control of the Company pursuant to provisions
substantially similar to those contained in Section 1016
hereof (and which shall provide that such Debt will not be
repurchased pursuant to such provisions prior to the
Company's repurchase of the Notes required to be repurchased
by the Company pursuant to the provisions described under
Section 1016).
"Subsidiary" of any Person means (i) a corporation
more than 50% of the combined voting power of the
outstanding Voting Stock of which is owned, directly or
indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or
more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or
more other Subsidiaries thereof, directly or indirectly, has
at least a majority ownership and power to direct the
policies, management and affairs thereof.
"Successor Note" of any particular Note means
every Note issued after, and evidencing all or a portion of
the same debt as that evidenced by, such particular Note;
and, for the purpose of this definition, any Note
authenticated and delivered under Section 307 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.
"Temporary Cash Investments" means any Investment
in the following kinds of instruments: (A) readily
marketable obligations issued or unconditionally guaranteed
as to principal and interest by the United States of America
or by any agency or authority controlled or supervised by
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and acting as an instrumentality of the United States of
America if, on the date of purchase or other acquisition of
any such instrument by the Company or any Restricted
Subsidiary of the Company, the remaining term to maturity or
interest rate adjustment is not more than two years;
(B) obligations (including, but not limited to, demand or
time deposits, bankers' acceptances and certificates of
deposit) issued or guaranteed by a depository institution or
trust company incorporated under the laws of the United
States of America, any state thereof or the District of
Columbia, provided that (1) such instrument has a final
maturity not more than one year from the date of purchase
thereof by the Company or any Restricted Subsidiary of the
Company and (2) such depository institution or trust company
has at the time of the Company's or such Restricted
Subsidiary's Investment therein or contractual commitment
providing for such Investment, (x) capital, surplus and
undivided profits (as of the date such institution's most
recently published financial statements) in excess of
$100 million and (y) the long-term unsecured debt
obligations (other than such obligations rated on the basis
of the credit of a Person other than such institution) of
such institution, at the time of the Company's or such
Restricted Subsidiary's Investment therein or contractual
commitment providing for such Investment, are rated in the
highest rating category of both S&P and Moody's;
(C) commercial paper issued by any corporation, if such
commercial paper has, at the time of the Company's or any
Restricted Subsidiary's Investment therein or contractual
commitment providing for such Investment credit ratings of
at least A-1 by S&P and P-1 by Moody's; (D) money market
mutual or similar funds having assets in excess of
$100 million; (E) readily marketable debt obligations issued
by any corporation, if at the time of the Company's or
Restricted Subsidiary's Investment therein or contractual
commitment providing for such Investment (1) the remaining
term to maturity is not more than two years and (2) such
debt obligations are rated in one of the two highest rating
categories of both S&P and Moody's; (F) demand or time
deposit accounts used in the ordinary course of business
with commercial banks the balances in which are at all times
fully insured as to principal and interest by the Federal
Deposit Insurance Corporation or any successor thereto; and
(G) to the extent not otherwise included herein, Cash
Equivalents. In the event that either S&P or Moody's ceases
to publish ratings of the type provided herein, a
replacement rating agency shall be selected by the Company
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with the consent of the Trustee, and in each case the rating
of such replacement rating agency most nearly equivalent to
the corresponding S&P or Moody's rating, as the case may be,
shall be used for purposes hereof.
"Trust Indenture Act" means the Trust Indenture
Act of 1939 as in force at the date as of which this instrument
was executed, except as provided in Section 905;
provided, however, that in the event the Trust Indenture Act
of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee"
in the first paragraph of this instrument until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"2023 Debentures" means the Company's 7.75%
Debentures due 2023.
"U.S. Person" means (i) any individual resident in
the United States, (ii) any partnership or corporation
organized or incorporated under the laws of the United
States, (iii) any estate of which an executor or
administrator is a U.S. Person (other than an estate
governed by foreign law and of which at least one executor
or administrator is a non-U.S. Person who has sole or shared
investment discretion with respect to its assets), (iv) any
trust of which any trustee is a U.S. Person (other than a
trust of which at least one trustee is a non-U.S. Person who
has sole or shared investment discretion with respect to its
assets and no beneficiary of the trust (and no settlor if
the Trust is revocable) is a U.S. Person), (v) any agency or
branch of a foreign entity located in the United States,
(vi) any non-discretionary or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the
benefit or account of a U.S. Person, (vii) any discretionary
or similar account (other than an estate or trust) held by a
dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such
an account held for the benefit or account of a non-U.S.
Person), (viii) any partnership or corporation organized or
incorporated under the laws of a foreign jurisdiction and
formed by a U.S. Person principally for the purpose of
investing in securities not registered under the Securities
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Act (unless it is organized or incorporated, and owned, by
accredited investors within the meaning of Rule 501(a) under
the Securities Act who are not natural persons, estates or
trusts); provided, however, that the term "U.S. Person" does
not include (A) a branch or agency of a U.S. Person that is
located and operating outside the United States for valid
business purposes as a locally regulated branch or agency
engaged in the banking or insurance business, (B) any
employee benefit plan established and administered in
accordance with the law, customary practices and
documentation of a foreign country and (C) the international
organizations set forth in Section 902(o)(7) of Regulation S
under the Securities Act and any other similar international
organizations, and their agencies, affiliates and pension
plans.
"Vice President", when used with respect to the
Company or the Trustee, means any vice president, whether or
not designated by a number or a word or words added before
or after the title "vice president".
"Voting Stock" of any Person means Capital Stock
of such Person which ordinarily has voting power for the
election of directors (or persons performing similar
functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power
by reason of any contingency.
"Wholly Owned Restricted Subsidiary" of any Person
means a Restricted Subsidiary of such Person all of the
outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the
time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person or by such Person and
one or more Wholly Owned Restricted Subsidiaries of such
Person.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be
given in the form of an Officers' Certificate, if to be
given by an officer of the Company, or an Opinion of
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Counsel, if to be given by counsel, and shall comply with
the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that each individual signing
such certificate or opinion has read such covenant
or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and
scope of the examination or investigation upon
which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each
such individual, he has made such examination or
investigation as is necessary to enable him to
express an informed opinion as to whether or not
such covenant or condition has been complied with;
and
(4) a statement as to whether, in the
opinion of each such individual, such condition or
covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representa-
tions by, counsel, unless such officer knows, or in the
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exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based
are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the informa-
tion with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in
the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be con-
solidated and form one instrument.
SECTION 104. Acts of Holders; Record Date.
(a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
(subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be proved by
the affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law
to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged
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to him the execution thereof. Where such execution is by a
signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or
the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems
sufficient.
(c) The Company may, in the circumstances
permitted by the Trust Indenture Act, fix any day as the
record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or
taken by Holders. If not set by the Company prior to the
first solicitation of a Holder made by any Person in respect
of any such action, or, in the case of any such vote, prior
to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most
recent list of Holders required to be provided pursuant to
Section 701) prior to such first solicitation or vote, as
the case may be. With regard to any record date, only the
Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant
action.
(d) The ownership of Notes shall be proved by the
Security Register.
(e) Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the
Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made
upon such Note.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the
Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in
writing and mailed, first-class postage prepaid,
or sent by facsimile to or with the Trustee at its
Corporate Trust Office, Attention: Corporate
Trust, or
(2) the Company by the Trustee or by any
Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class
postage prepaid, or sent by facsimile to the
Company addressed to it at the address of its
principal office specified in the first paragraph
of this instrument or at any other address
previously furnished in writing to the Trustee by
the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (if
any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken
in reliance upon such waiver.
In case by reason of the suspension of regular
mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such
notification as shall be made with the approval of the
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Trustee shall constitute a sufficient notification for every
purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act, that
is required under such Act to be part of and govern this
Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified
or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or to be excluded, as the
case may be. Until such time as this Indenture shall be
qualified under the Trust Indenture Act, this Indenture, the
Company and the Trustee shall be deemed for all purposes
hereof to be subject to and governed by the Trust Indenture
Act to the same extent as would be the case if this
Indenture were so qualified on the date hereof.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether
so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
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SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express
or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders
of Senior Debt and the Holders of Notes, any benefit or any
legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Notes shall be governed by
and construed in accordance with the laws of the State of
New York; provided, however, that the standard of
performance by the Trustee of its duties hereunder shall be
governed by the laws of the State of California.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date, Purchase Date or Stated Maturity of any
Note shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on
the Interest Payment Date, Redemption Date or Purchase Date,
or at the Stated Maturity, as the case may be, provided that
no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Purchase Date or
Stated Maturity, as the case may be.
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally; Initial Forms of Rule 144A
and Regulation S Notes.
The Notes and the Trustee's certificates of
authentication shall be in substantially the forms set forth
in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such
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letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the
Notes.
The definitive Notes to be endorsed thereon shall
be printed, lithographed or engraved or produced by any
combination of these methods on steel engraved borders or
may be produced in any other manner permitted by the rules
of any securities exchange on which the Notes may be listed,
all as determined by the officers executing such Notes, as
evidenced by their execution thereof.
Upon their original issuance, Rule 144A Notes
shall be issued in the form of one or more Global Notes
without interest coupons registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee,
as custodian for DTC, in New York, New York, for credit by
DTC to the respective accounts of beneficial owners of the
Notes represented thereby (or such other accounts as they
may direct). Such Global Notes, together with their
Successor Notes which are Global Notes other than the
Restricted Global Note are collectively herein called the
"Regulation S Global Note".
Upon their original issuance, Regulation S Notes
(herein called the "Regulation S Temporary Global Note")
shall be issued in the form of a single temporary Global
Note without coupons registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee at
its Corporate Trust Office, as custodian for DTC, for credit
to Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear, and Cedel to the
respective accounts of beneficial owners of the Notes
represented thereby (or such other accounts as they may
direct) in accordance with the rules thereof.
Beneficial interests in the Regulation S Temporary
Global Note may only be held through Euroclear and Cedel
until such interests are exchanged for corresponding
interests in an unrestricted Global Note as provided in the
next sentence. A holder of a beneficial interest in the
Regulation S Temporary Global Note must provide written
certification to Euroclear or CEDEL, as the case may be,
that the beneficial owner of the interest in such Global
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<PAGE>
Note is not a U.S. Person (an "Owner Securities
Certification"), and Euroclear or CEDEL, as the case may be,
must provide to the Trustee a similar certificate in the
form set form in Annex C (a "Depositary Securities
Certification"), prior to (i) the payment of interest with
respect to such holder's beneficial interest in the
Regulation S Temporary Global Note and (ii) any exchange of
such beneficial interest for a beneficial interest in the
Regulation S Global Note.
SECTION 202. Form of Face of Note.
[If the Note is a Restricted Note, then insert --
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO
INSTITUTIONAL ACCREDITED INVESTORS IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL
OTHER APPLICABLE SECURITIES LAWS.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF
THE ISSUER THAT THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS NOTE WILL NOT BE ACCEPTED FOR REGISTRATION OF
TRANSFER UNLESS THE REGISTRAR OR TRANSFER AGENT IS SATISFIED
THAT THE RESTRICTIONS ON TRANSFER SET FORTH ABOVE HAVE BEEN
COMPLIED WITH, ALL AS PROVIDED IN THE INDENTURE.]
[If the Note is a Global Note, then insert -- THIS
NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE
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EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO
TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED,
IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.]
[If the Note is a Global Note and The Depository
Trust Company is to be the Depositary therefor, then insert
- -- UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[If the Note is a Regulation S Note, then insert -
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933 , AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OF BENEFIT OF, ANY U.S. PERSON, UNLESS THIS
NOTE IS REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE.]
[If the Note is a Regulation S Temporary Global
Note, then insert --THIS NOTE IS A REGULATION S TEMPORARY
GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER. INTERESTS IN THIS REGULATION S TEMPORARY
GLOBAL NOTE MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON
PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (AS DEFINED
IN THE INDENTURE) EXCEPT IN CERTAIN LIMITED CIRCUMSTANCES IN
ACCORDANCE WITH THE TERMS OF THE INDENTURE.]
PHILLIPS-VAN HEUSEN CORPORATION
9 1/2% SENIOR SUBORDINATED NOTES DUE 2008
[If Restricted Global Note - CUSIP No. ____________]
[If Regulation S Temporary Global Note - CUSIP No.
[____________]
[If Regulation S Global Note - ISIN No. [____________]]
No. __________ $________
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Phillips-Van Heusen Corporation, a corporation
duly organized and existing under the laws of Delaware
(herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum
of ______________ Dollars (such amount the "principal
amount" of this Note) [if the Note is a Global Note, then
insert -- , or such other principal amount (which, when
taken together with the principal amounts of all other
Outstanding Notes, shall not exceed $150,000,000 in the
aggregate at any time) as may be set forth in the records of
the Trustee hereinafter referred to in accordance with the
Indenture,] on May 1, 2008 and to pay interest thereon from
April 22, 1998, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for,
semi-annually on May 1 and November 1 in each year,
commencing November 1, 1998, at the rate of 9 1/2% per annum,
until the principal hereof is paid or made available for
payment; provided that, if any Registration Default occurs
under the Exchange and Registration Rights Agreement, then
the per annum interest rate on the applicable principal
amount will increase for the period from and including the
date of the occurrence of the Registration Default to but
excluding such date as no Registration Default is in effect
(at which time the interest rate will be reduced to its
initial rate) at a per annum rate of 0.5% for the first 90-
day period following the occurrence of such Registration
Default, and by an additional 0.5% thereafter (up to a
maximum of 1.0%) (such additional interest being hereafter
referred to as "Special Interest"), and provided, further,]
that any amount of interest on this Note which is overdue
shall bear interest (to the extent that payment thereof
shall be legally enforceable) at the rate per annum then
borne by this Note from the date such amount is due to the
day it is paid or made available for payment, and such
overdue interest shall be payable on demand.
The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record
Date for such interest, which shall be the April 15 or
October 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date [if the Note
is an Original Note, then insert --, provided that any
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accrued and unpaid interest (including Special Interest) on
this Note upon the issuance of an Exchange Note in exchange
for this Note shall cease to be payable to the Holder hereof
and shall be payable on the next Interest Payment Date for
such Exchange Note to the Holder thereof on the related
Regular Record Date]. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable
to the Holder on the relevant Regular Record Date and may
either be paid to the Person in whose name this Note (or one
or more Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Notes not less than 10
days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
Interest on this Note shall be computed on the basis set
forth in the Indenture.
Payment of the principal of (and premium, if any)
and any such interest on this Note will be made at the
office or agency of the Company in the Borough of Manhattan,
The City of New York, New York, maintained for such purpose
and at any other office or agency maintained by the Company
for such purpose, in such coin or currency of the United
States of America as at the time of payment is legal tender
for payment of public and private debts; provided, however,
that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security
Register; provided further that all payments of the
principal (and premium, if any) and interest on Notes, the
Holders of which have given wire transfer instructions to
the Company or its agent at least 10 Business Days prior to
the applicable payment date will be required to be made by
wire transfer of immediately available funds to the accounts
specified by such Holders in such instructions.
Notwithstanding the foregoing, the final payment of
principal shall be payable only upon surrender of this Note
to the Trustee.
Reference is hereby made to the further provisions
of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if
set forth at this place.
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Unless the certificate of authentication hereon
has been executed by the Trustee referred to on the reverse
hereof by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
PHILLIPS-VAN HEUSEN CORPORATION
[SEAL]
By___________________________________
Attest:
______________________________
SECTION 203. Form of Reverse of Note.
This Note is one of a duly authorized issue of
Notes of the Company designated as its 9 1/2% Senior
Subordinated Notes due May 1, 2008 (herein called the
"Notes"), limited in aggregate principal amount to
$150,000,000, issued and to be issued under an Indenture,
dated as of April 22, 1998 (herein called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), between the Company and Union Bank of
California, N.A., as Trustee (herein called the "Trustee",
which term includes any successor trustee under the
Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a state-
ment of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and
the Holders of the Notes and of the terms upon which the
Notes are, and are to be, authenticated and delivered.
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The Notes will be subject to redemption, at the
option of the Company, in whole or in part, at any time on
or after May 1, 2003 and prior to maturity, upon not less
than 30 nor more than 60 days' notice mailed to each Holder
of Notes to be redeemed at such Holder's address appearing
in the Security Register, in amounts of $1,000 or an
integral multiple of $1,000, at the following Redemption
Prices (expressed as percentages of the principal amount)
plus accrued interest to but excluding the Redemption Date
(subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date), if
redeemed during the 12-month period beginning May 1 of the
years indicated:
Year Redemption
Price
2003. . . . . . . . . . . . . . . . . . 104.750%
2004. . . . . . . . . . . . . . . . . . 103.167%
2005. . . . . . . . . . . . . . . . . . 101.583%
2006 and thereafter . . . . . . . . . . 100.000%
In addition, if on or before May 1, 2001 the
Company receives net proceeds from the sale of its Common
Stock in one or more Public Equity Offerings, the Company
may, at its option use an amount equal to all or a portion
of any such net proceeds to redeem Notes in an aggregate
principal amount of up to 33 1/3% of the original aggregate
principal amount of the Notes, provided, however, that Notes
having a principal amount equal to at least 66 2/3% of the
original aggregate principal amount of the Notes remain
outstanding after such redemption. Such redemption must
occur on a Redemption Date within 90 days of such sale and
upon not less than 30 nor more than 60 days' notice mailed
to each Holder of Notes to be redeemed at such Holder's
address appearing in the Security Register, in amounts of
$1,000 or an integral multiple of $1,000, at a redemption
price of 109.50% of the principal amount of the Notes plus
accrued interest to but excluding the Redemption Date
(subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date).
If less than all the Notes are to be redeemed, the
Trustee shall select, in such manner as it shall deem fair
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and appropriate, the particular Notes to be redeemed or any
portion thereof that is an integral multiple of $1,000.
The Notes do not have the benefit of any sinking
fund obligations.
The Indenture provides that, subject to certain
conditions, if (i) certain Net Available Proceeds are
available to the Company as a result of Asset Dispositions
or (ii) a Change of Control occurs, the Company shall be
required to make an Offer to Purchase for all or a specified
portion of the Notes.
In the event of redemption or purchase pursuant to
an Offer to Purchase of this Note in part only, a new Note
or Notes of like tenor for the unredeemed or unpurchased
portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing,
the principal of all the Notes may be declared due and
payable in the manner and with the effect provided in the
Indenture.
The Indenture contains provisions for defeasance
at any time of (i) the entire indebtedness of this Note
having been paid or discharged or (ii) certain restrictive
covenants and Events of Default with respect to this Note
having occurred, in each case upon compliance with certain
conditions set forth therein.
The Notes shall be subordinated in right of
payment to Senior Debt of the Company as provided in the
Indenture.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Notes under the Indenture at any time
by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the
Notes at the time Outstanding. The Indenture also contains
provisions permitting the Holders of a majority in aggregate
principal amount of the Notes at the time Outstanding, on
behalf of the Holders of all the Notes, to waive compliance
by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their
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consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder
and upon all future Holders of this Note and of any Note
issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of
the Indenture, the Holder of this Note shall not have the
right to institute any proceeding with respect to the
Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes, the
Holders of not less than 25% in aggregate principal amount
of the Notes at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect
of such Event of Default as Trustee and offered the Trustee
reasonable indemnity and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount
of Notes at the time Outstanding a direction inconsistent
with such request and shall have failed to institute any
such proceeding for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not
apply to certain suits described in the Indenture, including
any suit instituted by the Holder of this Note for the
enforcement of any payment of principal hereof or any
premium (if any) or interest hereon on or after the
respective due dates expressed herein (or, in the case of
redemption, on or after the Redemption Date or, in the case
of any purchase of this Note required to be made pursuant to
an Offer to Purchase, on the Purchase Date).
No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of (and premium, if any)
and interest on this Note at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this
Note is registrable in the Security Register, upon surrender
of this Note for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City
of New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company
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and the Note Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon
one or more new Notes, of authorized denominations and for
the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form
without coupons in denominations of $1,000 principal amount
and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set
forth, Notes are exchangeable for a like aggregate principal
amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Note for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for
all purposes (subject to the provisions hereof with respect
to determination of the Person to whom interest is payable),
whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
Interest on this Note shall be computed on the
basis of a 360-day year of twelve 30-month days.
All terms used in this Note which are defined in
the Indenture shall have the meanings assigned to them in
the Indenture.
The Indenture and this Note shall be governed by
and construed in accordance with the laws of the State of
New York; provided, however, that the standard of
performance by the Trustee of its duties hereunder shall be
governed by the laws of the State of California.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased
in its entirety by the Company pursuant to Section 1014 or
1016 of the Indenture, check the box:
___
/__/
If you want to elect to have only a part of this
Note purchased by the Company pursuant to Section 1014 or
1016 of the Indenture, state the principal amount of this
Note you want to elect to have so purchased by the Company:
$___________
Dated:______________ Your Signature:____________________
(Sign exactly as name
appears on the other
side of this Note)
Signature Guarantee:________________________________________
Notice: Signature(s) must be guaranteed
by an "eligible guarantor institution"
meeting the requirements of the Trustee,
which requirements will include membership
or participation in STAMP or such other
"signature guarantee program" as may be
determined by the Trustee in addition to,
or in substitution for STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.
SECTION 204. Form of Trustee's Certificate of
Authentication.
This is one of the Notes referred to in the
within-mentioned Indenture.
___________________
as Trustee
By ____________________
Authorized Officer
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ARTICLE THREE
The Notes
SECTION 301. Title and Terms.
The aggregate principal amount of Notes which may
be authenticated and delivered under this Indenture is
limited to $150,000,000 except for Notes authenticated and
delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304,
305, 306, 906 or 1108 or in connection with an Offer to
Purchase pursuant to Sections 1014 and 1016.
The Notes shall be known and designated as the
"9 1/2% Senior Subordinated Notes due May 1, 2008" of the
Company. Their Stated Maturity shall be May 1, 2008 and
they shall bear interest at the rate of 9 1/2% per annum, from
April 22, 1998 or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the
case may be, payable semi-annually on May 1 and November 1,
commencing November 1, 1998, until the principal thereof is
paid or made available for payment provided, if any Registration
Default occurs under the Exchange and Registration
Rights Agreement, then the per annum interest rate on the
applicable principal amount will increase for the period
from and including the date of occurrence of the Registra-
tion Default to but excluding such date as no Registration
Default is in effect (at which time the interest rate will
be reduced to its initial rate) by a per annum rate of 0.5%
for the first 90-day period following the occurrence of such
Registration Default, and by an additional 0.5% thereafter
(up to a maximum of 1.0%).
The principal of (and premium, if any) and
interest on the Notes shall be payable at the office or
agency of the Company in the Borough of Manhattan, The City
of New York maintained for such purpose and at any other
office or agency maintained by the Company for such purpose;
provided, however, that at the option of the Company payment
of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in
the Security Register.
The Notes shall be subject to repurchase by the
Company pursuant to an Offer to Purchase as provided in
Sections 1014 and 1016.
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The Notes shall be redeemable as provided in
Article Eleven.
The Notes shall be subordinated in right of
payment to Senior Debt of the Company as provided in Article
Twelve.
The Notes shall be subject to defeasance at the
option of the Company as provided in Article Thirteen.
Unless the context otherwise requires, the Original
Notes and the Exchange Notes shall constitute one series
for all purposes under the Indenture, including with respect
to any amendment, waiver, acceleration or other Act of
Holders, redemption or Offer to Purchase.
SECTION 302. Denominations.
The Notes shall be issuable only in registered
form without coupons and only in denominations of $1000 and
integral multiples thereof.
SECTION 303. Execution, Authentication, Delivery
and Dating.
The Notes shall be executed on behalf of the
Company by its Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the
Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such
Notes.
At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Notes executed by the Company to the Trustee for
authentication, together with a Company Order for the
authentication and delivery of such Notes; and the Trustee
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in accordance with such Company Order shall authenticate and
deliver such Notes as in this Indenture provided and not
otherwise.
At any time and from time to time after the
execution and delivery of this Indenture and after the
effectiveness of a registration statement under the
Securities Act with respect thereto, the Company may deliver
Exchange Notes executed by the Company to the Trustee for
authentication, together with a Company Order for the
authentication and delivery of such Exchange Notes and a
like principal amount of Original Notes for cancellation in
accordance with this Article Three of this Indenture, and
the Trustee in accordance with the Company Order shall
authenticate and deliver such Notes. Prior to
authenticating such Exchange Notes, and accepting any
additional responsibilities under this Indenture in relation
to such Notes, the Trustee shall be entitled to receive, if
requested, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating in
substance:
(a) that all conditions hereunder precedent to
the authentication and delivery of such Exchange Notes
have been complied with and that such Exchange Notes,
when such Notes have been duly authenticated and
delivered by the Trustee (and subject to any other
conditions specified in such Opinion of Counsel), have
been duly issued and delivered and will constitute
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles; and
(b) that the issuance of the Exchange Notes in
exchange for Original Notes has been effected in
compliance with the Securities Act.
Each Note shall be dated the date of its
authentication.
No Note shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose
unless there appears on such Note a certificate of
authentication substantially in the form provided for herein
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executed by the Trustee by manual signature, and such
certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 304. Temporary Notes.
Pending the preparation of definitive Notes, the
Company may execute, and upon Company Order the Trustee
shall authenticate and deliver, temporary Notes, which Notes
are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially
of the tenor of the definitive Notes in lieu of
which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the
officers executing such Notes may determine, as evidenced by
their execution thereof.
If temporary Notes are issued, the Company will
cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the
temporary Notes shall be exchangeable for definitive Notes,
upon surrender of the temporary Notes at any office or
agency of the Company designated pursuant to Section 1002,
without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company
shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive
Notes of authorized denominations. Until so exchanged the
temporary Notes shall in all respects be entitled to the
same benefits under this Indenture as definitive Notes.
SECTION 305. Global Notes.
(a) Each Global Note authenticated under this
Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Note or a nominee
thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Note
shall constitute a single Note for all purposes of this
Indenture.
(b) Notwithstanding any other provision in this
Indenture, no Global Note may be exchanged in whole or in
part for Notes registered, and no transfer of a Global Note
in whole or in part may be registered, in the name of any
Person other than the Depositary for such Global Note or a
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nominee thereof unless (i) such Depositary (A) has notified
the Company that it is unwilling or unable to continue as
Depositary for such Global Note or (B) has ceased to be a
clearing agency registered as such under the Exchange Act,
and in either case the Company fails to appoint a successor
Depositary within 90 days, (ii) the Company executes and
delivers to the Trustee a Company Order stating that it
elects to cause the issuance of the Notes in certificated
form and that all Global Notes shall be exchanged in whole
for Securities that are not Global Notes (in which case such
exchange shall be effected by the Trustee) or (iii) there
shall have occurred and be continuing an Event of Default or
any Event which after notice or lapse of time or both would
be an Event of Default with respect to the Notes.
(c) If any Global Note is to be exchanged for
other Notes or canceled in whole, it shall be surrendered by
or on behalf of the Depositary or its nominee to the
Trustee, as Security Registrar, for exchange or cancellation
as provided in this Article Three. If any Global Note is to
be exchanged for other Notes or canceled in part, or if
another Note is to be exchanged in whole or in part for a
beneficial interest in any Global Note, then either (i) such
Global Note shall be so surrendered for exchange or
cancellation as provided in this Article Three or (ii) the
principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other
Note to be so exchanged for a beneficial interest therein,
as the case may be, by means of an appropriate adjustment
made on the records of the Trustee, as Security Registrar,
whereupon the Trustee, in accordance with the Applicable
Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its
records. Upon any such surrender or adjustment of a Global
Note, the Trustee shall, subject to Section 306(c) and as
otherwise provided in this Article Three, authenticate and
deliver any Notes issuable in exchange for such Global Note
(or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the
Depositary or its authorized representative. Upon the
request of the Trustee in connection with the occurrence of
any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a rea-
sonable supply of Notes that are not in the form of Global
Notes. The Trustee shall be entitled to rely upon any
order, direction or request of the Depositary or its
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authorized representative which is given or made pursuant to
this Article Three if such order, direction or request is
given or made in accordance with the Applicable Procedures.
(d) Every Note authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu
of, a Global Note or any portion thereof, whether pursuant
to this Article Three or otherwise, shall be authenticated
and delivered in the form of, and shall be, a Global Note,
unless such Note is registered in the name of a Person other
than the Depositary for such Global Note or a nominee
thereof.
(e) The Depositary or its nominee, as registered
owner of a Global Note, shall be the Holder of such Global
Note for all purposes under the Indenture and the Notes, and
owners of beneficial interests in a Global Note shall hold
such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a
Global Note will be shown only on, and the transfer of such
interest shall be effected only through, records maintained
by the Depositary or its nominee or its Agent Members.
SECTION 306. Registration, Registration of Transfer and
Exchange Generally; Restrictions on Transfer
and Exchange; Securities Act Legends.
(a) Registration, Registration of Transfer and
Exchange Generally. The Company shall cause to be kept at
the Corporate Trust Office of the Trustee a register (the
register maintained in such office and in any other office
or agency of the Company designated pursuant to Section 1002
being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide
for the registration of Notes and of transfers and exchanges
of Notes. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Notes and
transfers and exchanges of Notes as herein provided. Such
Security Register shall distinguish between Original Notes
and Exchange Notes.
Upon surrender for registration of transfer of any
Note at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, and provided that
the other requirements of this Section 306 have been
satisfied, the Company shall execute, and the Trustee shall
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authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any
authorized denominations, of a like aggregate principal
amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder, and subject to the
other provisions of this Section 306, Notes may be exchanged
for other Notes of any authorized denominations, of a like
aggregate principal amount and bearing such restrictive
legends as may be required by this Indenture upon surrender
of the Notes to be exchanged at any such office or agency.
Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate
and deliver, the Notes which the Holder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer
or exchange of Notes shall be the valid obligations of the
Company, evidencing the same debt, and (except for the
differences between Original Notes and Exchange Notes
provided for herein) entitled to the same benefits under
this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company or the Security Registrar) be duly
endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Note
Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registra-
tion of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Sections 303, 304, 305,
306, 906, 1016, 1017 or 1109 not involving any transfer.
The Company shall not be required (i) to issue,
register the transfer of, or exchange any Note during a
period beginning at the opening of business 15 days before
the day of the mailing of a notice of redemption of Notes
selected for redemption under Section 1105 and ending at the
close of business on the day of such mailing, or (ii) to
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register the transfer of or exchange any Note so selected
for redemption, in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(b) Certain Transfers and Exchanges. Notwith-
standing any other provision of this Indenture or the Notes,
transfers and exchanges of Notes and beneficial interests in
a Global Note of the kinds specified in this Section 306(b)
shall be made only in accordance with this Section 306(b).
(i) Restricted Global Note to Regulation S
Temporary Global Note or Regulation S Global Note. If the
owner of a beneficial interest in the Restricted Global Note
wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial
interest in the Regulation S Temporary Global Note (if
before the expiration of the Restricted Period) or in
the Regulation S Global Note (if thereafter), such
transfer may be effected only in accordance with the
provisions of this Clause (b)(i) subject to the
Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (A) an order given by the
Depositary or its authorized representative directing
that a beneficial interest in the Regulation S
Temporary Global Note or Regulation S Temporary Global
Note or Regulation S Global Note (as applicable) in a
specified principal amount be credited to a specified
Agent Member's account and that a beneficial interest
in the Restricted Global Note in an equal principal
amount be debited from another specified Agent Member's
account and (B) a Regulation S Certificate, satisfactory
to the Trustee and duly executed by the owner
of such beneficial interest in the Restricted Global
Note or his attorney duly authorized in writing, then
the Trustee, as Security Registrar but subject to
Clause (b)(iv) below, shall reduce the principal amount
of the Restricted Global Note and increase the
principal amount of the Regulation S Temporary Global
Note or Regulation S Global Note (as applicable) by
such specified principal amount as provided in Section
305(c).
(ii) Regulation S Temporary Global Note to
Restricted Global Note. If the owner of a beneficial interest
in the Regulation S Temporary Global Note wishes at any time
to transfer such interest to a Person who wishes to acquire
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the same in the form of a beneficial interest in the
Restricted Global Note, such transfer may be effected
only in accordance with this Clause (b)(ii) and subject
to the Applicable Procedures. Upon receipt by the
Trustee, as Security Registrar, of (A) an order given
by the Depositary or its authorized representative
directing that a beneficial interest in the Restricted
Global Note in a specified principal amount be credited
to a specified Agent Member's account and that a
beneficial interest in the Regulation S Temporary
Global Note in an equal principal amount be debited
from another specified Agent Member's account and (B) a
Restricted Notes Certificate, satisfactory to the
Trustee and duly executed by the owner of such
beneficial interest in the Regulation S Temporary
Global Note or his attorney duly authorized in writing,
then the Trustee, as Security Registrar, shall reduce
the principal amount of the Regulation S Temporary
Global Note and increase the principal amount of the
Restricted Global Note by such specified principal
amount as provided in Section 305(c).
(iii) Exchanges between Global Note and Non-Global
Note. A beneficial interest in a Global Note may be exchanged
for a Note that is not a Global Note as provided in Section
305, provided that, if such interest is a beneficial
interest in the Restricted Global Note, or if such
interest is a beneficial interest in the Regulation S
Temporary Global Note, then such interest shall be
exchanged for a Restricted Note (subject in each case
to Section 306(c)).
(iv) Regulation S Temporary Global Note to be Held
Through Euroclear or Cedel during Restricted Period. The
Company shall use its best efforts to cause the Depositary to
ensure that beneficial interests in the Regulation S Temporary
Global Note may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or
by Agent Members acting for the account thereof), and
no person shall be entitled to effect any transfer or
exchange that would result in any such interest being
held otherwise than in or through such an account;
provided that this Clause (b)(iv) shall not prohibit
any transfer or exchange of such an interest in
accordance with Clause (b)(ii) above.
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(c) Securities Act Legends. Rule 144A Notes and
their respective Successor Notes shall bear a Restricted
Notes Legend, and Regulation S Notes and their Successor
Notes shall bear a Regulation S Legend, subject to the
following:
(i) subject to the following Clauses of this Section
306(c), a Note or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Note or any portion
thereof shall bear the Securities Act Legend borne by such
Global Note while represented thereby;
(ii) subject to the following Clauses of this
Section 306(c), a new Note which is not a Global Note and is
issued in exchange for another Note (including a Global Note)
or any portion thereof, upon transfer or otherwise, shall
bear the Securities Act Legend borne by such other
Note, provided that, if such new Note is required
pursuant to Section 306(b)(iii) to be issued in the
form of a Restricted Note, it shall bear a Restricted
Notes Legend and, if such new Note is so required to be
issued in the form of a Regulation S Note, it shall
bear a Regulation S Legend;
(iii) Exchange Notes shall not bear a Securities Act
Legend;
(iv) at any time after the Notes may be freely
transferred without registration under the Securities Act or
without being subject to transfer restrictions pursuant to the
Securities Act, a new Note which does not bear a
Securities Act Legend may be issued in exchange for or
in lieu of a Note (other than a Global Note) or any
portion thereof which bears such a legend if the
Trustee has received an Unrestricted Notes Certificate,
satisfactory to the Trustee and duly executed by the
Holder of such legended Note or his attorney duly
authorized in writing, and after such date and receipt
of such certificate, the Trustee shall authenticate and
deliver such a new Note in exchange for or in lieu of
such other Note as provided in this Article Three;
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(v) a new Note which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Note
(other than a Global Note) or any portion thereof which bears
such a legend if, in the Company's judgment, placing such a
legend upon such new Note is not necessary to ensure
compliance with the registration requirements of the
Securities Act, and the Trustee, at the direction of
the Company, shall authenticate and deliver such a new
Note as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of
this Section 306(c), a Successor Note of a Note that does not
bear a particular form of Securities Act Legend shall not bear
such form of legend unless the Company has reasonable
cause to believe that such Successor Note is a
"restricted security" within the meaning of Rule 144,
in which case the Trustee, at the direction of the
Company, shall authenticate and deliver a new Note
bearing a Restricted Notes Legend in exchange for such
Successor Note as provided in this Article Three.
SECTION 307. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Note of
like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction,
loss or theft of any Note and (ii) such security or
indemnity as may be required by either of them to save each
of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that
such Note has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed,
lost or stolen Note, a new Note of like tenor and principal
amount and bearing a number not contemporaneously
outstanding.
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In case any such mutilated, destroyed, lost or
stolen Note has become or is about to become due and
payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this
Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Note issued pursuant to this Section in
lieu of any destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 308. Payment of Interest; Interest
Rights Preserved.
Interest on any Note which is payable, and is
punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that
Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such
interest.
Any interest on any Note which is payable, but is
not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Clause (1) or (2)
below:
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(1) The Company may elect to make payment of
any Defaulted Interest to the Persons in whose
names the Notes (or their respective Predecessor
Notes) are registered at the close of business on
a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note and the
date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date
and, in the name and at the expense of the
Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been
so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at
the close of business on such Special Record Date
and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any
Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any
securities exchange on which the Notes may be
listed, and upon such notice as may be required by
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such exchange, if, after notice given by the
Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this
Section, each Note delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other
Note.
SECTION 309. Persons Deemed Owners.
Prior to due presentment of a Note for registra-
tion of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose
name such Note is registered as the owner of such Note for
the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 308) interest on
such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Company, the
Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee or any agent of
the Company or the Trustee shall have any responsibility or
liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests
of a Note in global form, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, with respect to
any Note in global form, nothing herein shall prevent the
Company or the Trustee, or any agent of the Company or the
Trustee, from giving effect to any written certification,
proxy or other authorization furnished by any Depositary (or
its nominee), as a Holder, with respect to such Note in
global form or impair, as between such Depositary and owners
of beneficial interests in such Note in global form, the
operation of customary practices governing the exercise of
the rights of such Depositary (or its nominee) as Holder of
such Note in global form.
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SECTION 310. Cancellation.
All Notes surrendered for payment, redemption,
registration of transfer or exchange or any Offer to
Purchase pursuant to Section 1014 or 1016 shall, if
surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes
canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes held by the
Trustee shall be disposed of as directed by a Company Order.
SECTION 311. Computation of Interest.
Interest on the Notes shall be computed on the
basis of a 360 day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect
(except as to (i) rights of registration of transfer and
exchange and the Company's right of optional redemption,
(ii) substitution of apparently mutilated, defaced,
destroyed, lost or stolen Notes, (iii) rights of Holders to
receive payment of principal and interest on the Notes,
(iv) rights, obligations and immunities of the Trustee under
the Indenture, (v) rights of the Holders of the Notes as
beneficiaries of the Indenture with respect to any property
deposited with the Trustee payable to all or any of them and
(vi) obligations of the Company under Section 610(e)), and
the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
(1) either
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(A) all Notes theretofore
authenticated and delivered (other than
(i) Notes which have been destroyed,
lost or stolen and which have been
replaced or paid as provided in
Section 307 and (ii) Notes for whose
payment money has theretofore been
deposited in trust or segregated and
held in trust by the Company and there-
after repaid to the Company or
discharged from such trust, as provided
in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Notes not theretofore
delivered to the Trustee for
cancellation
(i) have become due and
payable, or
(ii) will become due and
payable at their Stated Maturity
within one year, or
(iii) are to be called for
redemption within one year under
arrangements satisfactory to the
Trustee for the giving of notice of
redemption by the Trustee in the
name, and at the expense, of the
Company,
and the Company, in the case of (i),
(ii) or (iii) above, has deposited or
caused to be deposited with the Trustee
as trust funds in trust for the purpose
an amount sufficient to pay and dis-
charge the entire indebtedness on such
Notes not theretofore delivered to the
Trustee for cancellation, for principal
(and premium, if any) and interest to
the date of such deposit (in the case of
Notes which have become due and payable)
or to the Stated Maturity or Redemption
Date, as the case may be;
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(2) the Company has paid or caused to be
paid all other sums payable hereunder by the
Company; and
(3) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions
precedent herein provided for relating to the
satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture pursuant to this Article Four, the obligations of
the Company to the Trustee under Section 607 and, if money
shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations
of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant
to Section 401 shall be held in trust uninvested and applied
by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money has been deposited
with the Trustee but such money need not be separated from
other funds except to the extent required by law.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means
any one of the following events (whatever the reason for
such Event of Default and whether it shall be occasioned by
the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order,
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rule or regulation of any administrative or governmental
body):
(1) failure to pay the principal of (or
premium, if any, on) any Note at its
Maturity; or
(2) failure to pay any interest upon any
Note when it becomes due and payable,
and continuance of such default for a
period of 30 days; or
(3) default in the payment of principal and
interest on Notes required to be
purchased by the Company pursuant to an
Offer to Purchase as described in
Section 1014 herein and Section 1016
herein when due and payable; or
(4) failure to perform or comply with the
provisions of Section 801; or
(5) failure to perform any other covenant or
agreement of the Company in this
Indenture or Notes (other than a covenant
or warranty a default in whose
performance or whose breach is elsewhere
in this Section specifically dealt
with), and continuance of such default
or breach for a period of 60 days after
there has been given, by registered or
certified mail, to the Company by the
Trustee or to the Company and the
Trustee by the Holders of at least 25%
in principal amount of the Outstanding
Notes a written notice specifying such
default or breach and requiring it to be
remedied and stating that such notice is
a "Notice of Default" hereunder; or
(6) default under the terms of any
instrument evidencing or securing Debt
for money borrowed by the Company or any
Restricted Subsidiary having an
outstanding principal amount of
$5.0 million individually or in the
aggregate which default results in the
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acceleration of the payment of such
indebtedness or constitutes the failure
to pay such indebtedness when due; or
(7) a final judgment or judgments (not
subject to appeal) for the payment of
money are entered against the Company or
any Restricted Subsidiary of the Company
in an amount in excess of $5.0 million
by a court or courts of competent jurisdiction,
which judgments remain undischarged or
unstayed for a period of
60 days after the date on which the
right to appeal all such judgments has
expired; or
(8) the entry by a court having jurisdiction
in the premises of (A) a decree or order
for relief in respect of the Company or
any Restricted Subsidiary of the Company
in an involuntary case or proceeding
under any applicable Federal or State
bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or
order adjudging the Company or any such
Restricted Subsidiary a bankrupt or
insolvent, or approving as properly
filed a petition seeking reorganization,
arrangement, adjustment or composition
of or in respect of the Company or any
such Restricted Subsidiary under any
applicable Federal or State law, or
appointing a custodian, receiver,
liquidator, assignee, trustee,
sequestrator or other similar official
of the Company or any such Restricted
Subsidiary of any substantial part of
the property of the Company or any such
Restricted Subsidiary, or ordering the
winding up or liquidation of the affairs
of the Company or any such Subsidiary,
and the continuance of any such decree
or order for relief or any such other
decree or order unstayed and in effect
for a period of 60 consecutive days; or
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(9) the commencement by the Company or any
Restricted Subsidiary of the Company of
a voluntary case or proceeding under any
applicable Federal or State bankruptcy,
insolvency, reorganization or other
similar law or of any other case or
proceeding to be adjudicated a bankrupt
or insolvent, or the consent by the
Company or any such Restricted
Subsidiary to the entry of a decree or
order for relief in respect of the
Company or any Restricted Subsidiary of
the Company in an involuntary case or
proceeding under any applicable Federal
or State bankruptcy, insolvency,
reorganization or other similar law or
to the commencement of any bankruptcy or
insolvency case or proceeding against
the Company or any Restricted Subsidiary
of the Company, or the filing by the
Company or any such Restricted
Subsidiary of a petition or answer or
consent seeking reorganization or relief
under any applicable Federal or State
law, or the consent by the Company or
any such Restricted Subsidiary to the
filing of such petition or to the
appointment of or taking possession by a
custodian, receiver, liquidator,
assignee, trustee, sequestrator or
similar official of the Company or any
Restricted Subsidiary of the Company of
any substantial part of the property of
the Company or any Restricted Subsidiary
of the Company, or the making by the
Company or any Restricted Subsidiary of
the Company of an assignment for the
benefit of creditors, or the admission
by the Company or any such Restricted
Subsidiary in writing of its inability
to pay its debts generally as they
become due, or the taking of corporate
action by the Company or any such
Restricted Subsidiary in furtherance of
any such action.
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SECTION 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of
Default specified in Section 501(8) or (9)) occurs and is
continuing, then and in every such case the Trustee or the
Holders of not less than 25% in aggregate principal amount
of the Outstanding Notes may declare all of the Notes to be
due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon
any such declaration such principal and any accrued
interest, if any, shall become immediately due and payable.
If an Event of Default specified in Section 501(8) or (9)
occurs, the principal and any accrued interest on the Notes
then Outstanding shall ipso facto become immediately due and
payable without any declaration or other Act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a
majority in aggregate principal amount of the Outstanding
Notes, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with
the Trustee a sum sufficient to pay
(A) all overdue interest on all
Notes,
(B) the principal of (and premium,
if any, on) any Notes which have become
due otherwise than by such declaration
of acceleration (including any Notes
required to have been purchased on the
Purchase Date pursuant to an Offer to
Purchase made by the Company) and, to
the extent that payment of such interest
is lawful, interest thereon at the rate
provided by the Notes,
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(C) to the extent that payment of
such interest is lawful, interest upon
overdue interest at the rate provided by
the Notes, and
(D) all sums paid or advanced by
the Trustee hereunder and the reasonable
compensation, expenses, disbursements
and advances of the Trustee, its agents
and counsel;
and
(2) all Events of Default, other than the
non-payment of the principal of Notes which have
become due solely by such declaration of
acceleration, have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any
interest on any Note when such interest becomes
due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the
principal of (or premium, if any, on) any Note at
the Maturity thereof or, with respect to any Note
required to have been purchased pursuant to an
Offer to Purchase made by the Company, at the
Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Notes, the whole amount
then due and payable on such Notes for principal (and
premium, if any) and interest, and, to the extent that
payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and
on any overdue interest, at the rate provided by the Notes,
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if any, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of col-
lection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial pro-
ceeding for the collection of the sums so due and unpaid,
may prosecute such proceeding to judgment or final decree
and may enforce the same against the Company or any other
obligor upon the Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the
Notes, wherever situated.
If an Event of Default occurs and is continuing,
the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the
Company or any other obligor upon the Notes, or upon the
property of the Company or its creditors, the Trustee shall
be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized
to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount
due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
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counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 505. Trustee May Enforce Claims Without
Possession of Notes.
All rights of action and claims under this Inden-
ture or the Notes may be prosecuted and enforced by the
Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the
Notes in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Notes
and the notation thereon of the payment if only partially
paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts
due the Trustee under Section 607; and
SECOND: To the extent provided in
Article Twelve, to the holders of Senior Debt
in accordance with Article Twelve; and
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THIRD: To the payment of the amounts
then due and unpaid for principal of (and
premium, if any) and interest on the Notes in
respect of which or for the benefit of which
such money has been collected, ratably,
without preference or priority of any kind,
according to the amounts due and payable on
such Notes for principal (and premium, if
any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Note shall have any right to
institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written
notice to the Trustee of a continuing Event of
Default;
(2) the Holders of not less than 25% in
aggregate principal amount of the Outstanding
Notes shall have made written request to the
Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to
the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its
receipt of such notice, request and offer of
indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such
written request has been given to the Trustee
during such 60-day period by the Holders of a
majority in aggregate principal amount of the
Outstanding Notes;
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it being understood and intended that no one or more Holders
shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and
ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest.
Notwithstanding any other provision in this
Indenture, the Holder of any Note shall have the right,
which is absolute and unconditional, to receive payment of
the principal of (and premium, if any) and (subject to
Section 306) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of
redemption, on the Redemption Date or in the case of an
Offer to Purchase made by the Company and required to be
accepted as to such Note, on the Purchase Date) and to
institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Inden-
ture and such proceeding has been discontinued or abandoned
for any reason, or has been determined adversely to the
Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Notes in the last paragraph of Section 307, no right
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or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the
case may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal
amount of the Outstanding Notes shall have the right to
direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict
with any rule of law or with this Indenture, and
(2) the Trustee may take any other action
deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes may on
behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
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(1) in the payment of the principal of (or
premium, if any) or interest on any Note
(including any Note which is required to have been
purchased pursuant to an Offer to Purchase which
has been made by the Company), or
(2) in respect of a covenant or provision
hereof which under Article Ten cannot be modified
or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as
Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and
may assess costs against any such party litigant, in the
manner and to the extent provided in the Trust Indenture
Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in
any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
Except during the continuance of an Event of
Default, the duties and responsibilities of the Trustee
shall be as provided by the Indenture. During the existence
of an Event of Default, the Trustee will exercise such
rights and powers vested in it under the Indenture and use
the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the
conduct of such person's own affairs. Notwithstanding the
foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any
default hereunder as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any
default of the character specified in Section 501(4), no
such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Sec-
tion, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of
Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be
protected in acting or refraining from acting upon
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any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document believed by it to be genuine and to have
been signed or presented by the proper party or
parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order and any
resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that
a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and
the written advice of such counsel or any Opinion
of Counsel shall be full and complete
authorization and protection in respect of any
action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation
to exercise any of the rights or powers vested in
it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the
Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be
incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make
any investigation into the facts or matters stated
in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may
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make such further inquiry or investigation into
such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to
examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents
or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on
the part of any agent or attorney appointed with
due care by it hereunder; and
(h) the Trustee shall not be deemed to have
notice of a "default" as defined in Section 602,
or an Event of Default as defined in Section 501
hereof, unless and until it has actual knowledge
thereof at its Corporate Trust Office.
SECTION 604. Not Responsible for Recitals or
Issuance of Notes.
The recitals contained herein and in the Notes,
except the Trustee's certificates of authentication, shall
be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. The Trustee
shall not be accountable for the use or application by the
Company of Notes or the proceeds thereof.
SECTION 605. May Hold Notes.
The Trustee, any Paying Agent, any Note Registrar
or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Notes
and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Note Registrar or such other
agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability
for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time
such compensation as shall be agreed to in writing
by the Company and the Trustee for all services
rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard
to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in
accordance with any provision of this Indenture
(including the reasonable compensation and the
expenses and disbursements of its agents and
counsel), except any such expense, disbursement or
advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee for, and to
hold it harmless against, any loss, liability or
expense (other than taxes based on the income of
the Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection
with the acceptance or administration of this
trust, including the costs and expenses of
defending itself against any claim or liability in
connection with the exercise or performance of any
of its powers or duties hereunder.
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SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the
Trustee shall either eliminate such conflict or resign, to
the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder
which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capi-
tal and surplus of at least $50,000,000 and its Corporate
Trust Office in the Borough of Manhattan, The City of New
York. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus
of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment
of Successor.
(a) No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act
of the Holders of a majority in aggregate principal amount
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of the Outstanding Notes, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible
under Section 609 and shall fail to resign after
written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer
shall take charge or control of the Trustee or of
its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolu-
tion may remove the Trustee, or (ii) subject to Section 514,
any Holder who has been a bona fide Holder of a Note for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent juris-
diction for the removal of the Trustee and the appointment
of a successor Trustee.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability,
or the occurrence of such vacancy, a successor
Trustee shall be appointed by Act of the Holders of a
majority in aggregate principal amount of the Outstanding
Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed
by the Company or the Holders and accepted appointment in
the manner hereinafter provided, any Holder who has been a
bona fide Holder of a Note for at least six months may, on
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behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment
of a successor Trustee to all Holders in the manner provided
in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on request of the Company or the suc-
cessor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts
of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of
any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate
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trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes
shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated
with the same effect as if such successor Trustee had itself
authenticated such Notes.
SECTION 613. Preferential Collection of Claims
Against Company.
If and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the
Notes), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days
after each Regular Record Date, a list, in such
form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such
Regular Record Date, and
(b) at such other times as the Trustee may
request in writing, within 30 days after the
receipt by the Company of any such request, a list
of similar form and content as of a date not more
than 15 days prior to the time such list is
furnished;
excluding from any such list names and addresses received by
the Trustee in its capacity as Note Registrar.
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SECTION 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses
of Holders contained in the most recent list furnished to
the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with
other Holders with respect to their rights under this
Indenture or under the Notes and the corresponding rights
and duties of the Trustee, shall be provided by the Trust
Indenture Act.
(c) Every Holder of Notes, by receiving and
holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses of
Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which the Notes are listed,
with the Commission and with the Company. The Company will
notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents
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and other reports, and such summaries thereof, as may
be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant to such Act; provided
that any such information, documents or reports required to
be filed with Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed with the Trustee within 30
days after the same is so required to be filed with the
Commission.
SECTION 705. Officers' Certificate with Respect to
Change in Interest Rates.
Within five days after the day on which any
Special Interest begins accruing, and within five days after
any Special Interest ceases to accrue, the Company shall
deliver an Officers' Certificate to the Trustee stating the
interest rate thereupon in effect for the applicable Notes
(if any are Outstanding) and the date on which such rate
became effective.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Mergers, Consolidations and Certain
Transfers, Leases and Acquisition
of Assets.
The Company shall not, in a single transaction or
a series of related transactions, (i) consolidate with or
merge into any other Person or permit any other Person to
consolidate with or merge into the Company or (ii) directly
or indirectly, transfer, sell, lease or otherwise dispose of
all or substantially all of its assets unless: (1) in a
transaction in which the Company does not survive or in
which the Company sells, leases or otherwise disposes of all
or substantially all of its assets, the successor entity to
the Company is organized under the laws of the United States
of America or any State thereof or the District of Columbia
and shall expressly assume, by a supplemental indenture
executed and delivered to the Trustee in form satisfactory
to the Trustee, all of the Company's obligations under the
Indenture; (2) immediately before and after giving effect to
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such transaction and treating any Debt which becomes an
obligation of the Company or a Restricted Subsidiary as a
result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the
transaction, no Event of Default or event that with the
passing of time or the giving of notice, or both, would
constitute an Event of Default shall have occurred and be
continuing; (3) immediately after giving effect to such
transaction, the Consolidated Net Worth of the Company (or
other successor entity to the Company) is equal to or
greater than that of the Company immediately prior to the
transaction; (4) immediately after giving effect to such
transaction and treating any Debt which becomes an
obligation of the Company or a Restricted Subsidiary as a
result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the
transaction, the Company (including any successor entity to
the Company) could Incur at least $1.00 of additional Debt
pursuant to the provisions of the Indenture described in the
first paragraph under Section 1008 hereof; and (5) the
Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which Opinion of
Counsel may rely, as to factual matters, on such Officer's
Certificate), each stating that such consolidation, merger,
conveyance, transfer, lease or acquisition and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, complies with this
Article and that all conditions precedent herein provided
for relating to such transaction have been complied with,
and, with respect to such Officer's Certificate, setting
forth the manner of determination of the Consolidated Net
Worth and the ability to Incur Debt in accordance with
Clause (4) of Section 801, of the Company or, if applicable,
of the Successor Company as required pursuant to the
foregoing.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or
merger of the Company into, any other Person or any
transfer, conveyance, sale, lease or other disposition of
all or substantially all of the properties and assets of the
Company as an entirety in accordance with Section 801, the
Successor Company shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor
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Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall
be relieved of all obligations and covenants under this
Indenture and the Notes.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders.
Without the consent of any Holders, the Company,
when authorized by a Board Resolution of the Company, and
the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following
purposes:
(1) to evidence the succession of another
Person to the Company and the assumption by any
such successor of the covenants of the Company
herein and in the Notes; or
(2) to add to the covenants of the Company
for the benefit of the Holders, or to surrender
any right or power herein conferred upon the
Company; or
(3) to secure the Notes pursuant to the
requirements of Section 1011 or otherwise; or
(4) to comply with any requirements of the
Commission in order to effect and maintain the
qualification of this Indenture under the Trust
Indenture Act; or
(5) to cure any ambiguity, to correct or
supplement any provision herein which may be
inconsistent with any other provision herein, or
to make any other provisions with respect to
matters or questions arising under this Indenture
which shall not be inconsistent with the provi-
sions of this Indenture, provided such action
pursuant to this Clause (5) shall not adversely
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affect the interests of the Holders in any mate-
rial respect.
SECTION 902. Supplemental Indentures with
Consent of Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Notes, by
Act of said Holders delivered to the Company and the Trus-
tee, the Company, when authorized by a Board Resolution of
the Company, and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding
Note affected thereby,
(1) change the Stated Maturity of the
principal of, or any instalment of interest on,
any Note, or reduce the principal amount thereof
or the rate of interest thereon or any premium
payable thereon, or change the place of payment
where, or the coin or currency in which, any Note
or any premium or the interest thereon is payable,
or impair the right to institute suit for the
enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date or, in
the case of an Offer to Purchase which has been
made, on or after the applicable Purchase Date),
or
(2) reduce the percentage in principal
amount of the Outstanding Notes, the consent of
whose Holders is required for any such
supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance
with certain provisions of this Indenture or
certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this
Section, Section 513 or Section 1020, except to
increase any such percentage or to provide that
certain other provisions of this Indenture cannot
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be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby,
or
(4) modify any of the provisions of this
Indenture relating to the subordination of the
Notes in a manner adverse to the Holders, or
(5) following the mailing of an Offer with
respect to an Offer to Purchase pursuant to
Sections 1014 and 1016, modify the provisions of
this Indenture with respect to such Offer to
Purchase in a manner materially adverse to such
Holder.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by a
Board Resolution authorizing the execution of any supplemental
indenture, the Trustee shall join the Company in the
execution of any supplemental indenture authorized or
permitted by this Indenture and shall make any further
appropriate agreements and stipulations as may be contained
therein. In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall
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form a part of this Indenture for all purposes; and every
Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
SECTION 906. Reference in Notes to
Supplemental Indentures.
Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company
shall so determine, new Notes so modified as to conform, in
the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal
of (and premium, if any) and interest on the Notes in
accordance with the terms of the Notes and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where
Notes may be presented or surrendered for payment, where
Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the
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Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate
one or more other offices or agencies (in or outside the
Borough of Manhattan, The City of New York) where the Notes
may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations;
provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will
give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location
of any such other office or agency.
SECTION 1003. Money for Note Payments to Be Held
in Trust.
If the Company shall at any time act as its own
Paying Agent, it will, on or before each due date of the
principal of or interest on any of the Notes, segregate and
hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action
or failure so to act.
Whenever the Company shall have one or more Paying
Agents, it will, prior to each due date of the principal of
(and premium, if any) or interest on any Notes, deposit with
a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
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The Company will cause each Paying Agent other
than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment
of the principal of (and premium, if any) or
interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default
by the Company (or any other obligor upon the
Notes) in the making of any payment of principal
(and premium, if any) or interest; and
(3) at any time during the continuance of
any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture
or for any other purpose, pay, or by Company Order direct
any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which
such sums were held by the Company or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment
of the principal of (and premium, if any) or interest on any
Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying
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Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily
published on each Business Day and of general circulation in
The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or
cause to be done all things necessary to preserve and keep
in full force and effect its existence, rights (charter and
statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or
franchise if the Board of Directors in good faith shall
determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties used or
useful in the conduct of its business or the business of any
Subsidiary of the Company to be maintained and kept in good
condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at
all times; provided, however, that nothing in this Section
shall prevent the Company from discontinuing the operation
or maintenance of any of such properties if such discontinuance
is, as determined by the Board of Directors in good
faith, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
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SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent,
(1) all taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Subsidiaries or
upon the income, profits or property of the Company or any
of its Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become
a lien upon the property of the Company or any of its
Subsidiaries; provided, however, that the Company shall not
be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 1007. Maintenance of Insurance.
The Company shall, and shall cause its Subsidiaries
to, keep at all times all of their properties which
are of an insurable nature insured against loss or damage
with insurers believed by the Company to be responsible to
the extent that property of similar character is usually so
insured by corporations similarly situated and owning like
properties in accordance with good business practice. The
Company shall, and shall cause its Subsidiaries to, use an
amount equal to not less than the proceeds from any such
insurance policy to repair, replace or otherwise restore the
property to which such proceeds relate.
SECTION 1008. Limitation on Consolidated Debt.
The Company shall not, and shall not permit any
Restricted Subsidiary of the Company to, Incur any Debt
unless immediately after giving pro forma effect to the
Incurrence of such Debt and the receipt and application of
the proceeds thereof, the Consolidated Cash Flow Coverage
Ratio of the Company would be greater than 2.0 to 1 for any
Incurrence of Debt prior to May 1, 2001, and 2.5 to 1 for
any Incurrence of Debt thereafter.
Notwithstanding the foregoing paragraph, the
Company may, and may permit any Restricted Subsidiary, to
Incur the following Debt:
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(i) Debt under the New Credit Facility in an
aggregate principal amount at any one time not to
exceed $325.0 million, less any amounts by which
any revolving credit facility commitments under
the New Credit Facility are permanently reduced
pursuant to Section 1014 (so long as and to the
extent that any required payments in connection
therewith are actually made);
(ii) the original issuance by the Company of
the Debt evidenced by the Notes (including any
Exchange Notes);
(iii) Debt (other than Debt described in
another clause of this paragraph) outstanding on
the date of original issuance of the Notes after
giving effect to the application of the proceeds
of the Notes, as described in Schedule I hereto;
(iv) Debt owed by the Company to any Wholly
Owned Restricted Subsidiary of the Company or Debt
owed by a Restricted Subsidiary of the Company to
the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided, however, that
upon either (A) the transfer or other disposition
by such Wholly Owned Restricted Subsidiary or the
Company of any Debt so permitted to a Person other
than the Company or another Wholly Owned
Restricted Subsidiary of the Company or (B) the
issuance (other than directors' qualifying
shares), sale, lease, transfer or other
disposition of shares of Capital Stock (including
by consolidation or merger) of such Wholly Owned
Restricted Subsidiary to a Person other than the
Company or another such Wholly Owned Restricted
Subsidiary, the provisions of this Clause (iv)
shall no longer be applicable to such Debt and
such Debt shall be deemed to have been Incurred at
the time of such transfer or other disposition;
(v) Debt consisting of Permitted Interest
Rate, Currency or Commodity Price Agreements;
(vi) Debt which is exchanged for or the
proceeds of which are used to refinance or refund,
or any extension or renewal of, outstanding Debt
Incurred pursuant to the preceding paragraph or
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clauses (ii) or (iii) of this paragraph (each of
the foregoing, a "refinancing") in an aggregate
principal amount not to exceed the principal
amount of the Debt so refinanced plus the amount
of any premium required to be paid in connection
with such refinancing pursuant to the terms of the
Debt so refinanced or the amount of any premium
reasonably determined by the Company as necessary
to accomplish such refinancing by means of a
tender offer or privately negotiated repurchase,
plus the expenses of the Company or the Restricted
Subsidiary, as the case may be, incurred in
connection with such refinancing; provided,
however, that (A) Debt the proceeds of which are
used to refinance the Notes or Debt which is pari
passu with or subordinate in right of payment to
the Notes shall only be permitted if (x) in the
case of any refinancing of the Notes or Debt which
is pari passu to the Notes, the refinancing Debt
is made pari passu to the Notes or subordinated to
the Notes, and (y) in the case of any refinancing
of Debt which is subordinated to the Notes, the
refinancing Debt constitutes Subordinated Debt;
(B) the refinancing Debt by its terms, or by the
terms of any agreement or instrument pursuant to
which such Debt is issued, (1) does not provide
for payments of principal of such Debt at the
stated maturity thereof or by way of a sinking
fund applicable thereto or by way of any mandatory
redemption, defeasance, retirement or repurchase
thereof (including any redemption, defeasance,
retirement or repurchase which is contingent upon
events or circumstances, but excluding any
retirement required by virtue of acceleration of
such Debt upon any event of default thereunder),
in each case prior to the stated maturity of the
Debt being refinanced and (2) does not permit
redemption or other retirement (including pursuant
to an offer to purchase) of such debt at the
option of the holder thereof prior to the final
stated maturity of the Debt being refinanced),
other than a redemption or other retirement at the
option of the holder of such Debt (including
pursuant to an offer to purchase) which is
conditioned upon provisions substantially similar
to those described under Sections 1014 and 1016;
and (C) in the case of any refinancing of Debt
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Incurred by the Company, the refinancing Debt may
be Incurred only by the Company, and in the case
of any refinancing of Debt Incurred by a
Restricted Subsidiary, the refinancing Debt may be
Incurred only by such Restricted Subsidiary;
provided, further, that Debt Incurred pursuant to
this clause (vi) may not be Incurred more than
45 days prior to the application of the proceeds
to repay the Debt to be refinanced; and
(vii) Debt not otherwise permitted to be
Incurred pursuant to Clauses (i) through (vi)
above, which, together with any other outstanding
Debt Incurred pursuant to this Clause (vii), has
an aggregate principal amount not in excess of
$50.0 million at any time outstanding.
SECTION 1009. Limitation on Senior Subordinated Debt.
The Company shall not Incur any Debt which by its
terms is both (i) subordinated in right of payment to any
Senior Debt and (ii) senior in right of payment to the
Notes.
SECTION 1010. Limitation on Issuance of Guarantees
of Subordinated Debt.
The Company shall not permit any Restricted
Subsidiary, directly or indirectly, to assume, guarantee or
in any other manner become liable with respect to any Debt
of the Company that by its terms is pari passu or junior in
right of payment to the Notes.
SECTION 1011. Limitation on Liens.
The Company shall not, and shall not permit any
Subsidiary to, create, incur, assume or suffer to exist any
Lien on or with respect to any property or assets of the
Company or any such Restricted Subsidiary now owned or
hereafter acquired to secure Debt which is pari passu with
or subordinated in right of payment to the Notes without
making, or causing such Restricted Subsidiary to make,
effective provision for securing the Notes (and, if the
Company shall so determine, any other Debt of the Company
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which is not subordinate to the Notes or of such Restricted
Subsidiary) (x) equally and ratably with such Debt as to
such property or assets for so long as such Debt shall be so
secured or (y) in the event such Debt is Debt of the Company
which is subordinate in right of payment to the Notes, prior
to such Debt as to such property for so long as such Debt
will be so secured. The foregoing restrictions shall not
apply to Liens in respect of Debt existing at the date of
this Indenture or to: (i) Liens securing only the Notes;
(ii) Liens in favor of the Company or a Wholly Owned
Restricted Subsidiary; or (iii) Liens to secure Debt
incurred to extend, renew, refinance or refund (or
successive extensions, renewals, refinancings or
refundings), in whole or in part, any Debt secured by Liens
referred to in the foregoing clause (i) so long as such Lien
does not extend to any other property and the principal
amount of Debt so secured is not increased except as
otherwise permitted under Clause (vi) of Section 1008.
SECTION 1012. Limitation on Restricted Payments.
The Company (i) shall not, directly or indirectly,
declare or pay any dividend or make any distribution
(including any payment in connection with any merger or
consolidation derived from assets of the Company or any
Restricted Subsidiary) in respect of its Capital Stock or to
the holders thereof, excluding any dividends or
distributions by the Company payable solely in shares of its
Capital Stock (other than Redeemable Stock) or in options,
warrants or other rights to acquire its Capital Stock (other
than Redeemable Stock), (ii) shall not, and shall not permit
any Restricted Subsidiary to, purchase, redeem, or otherwise
acquire or retire for value (a) any Capital Stock of the
Company or any Related Person of the Company or (b) any
options, warrants or other rights to acquire shares of
Capital Stock of the Company or any Related Person of the
Company or any securities convertible or exchangeable into
shares of Capital Stock of the Company or any Related Person
of the Company, (iii) shall not make, or permit any
Restricted Subsidiary to make, any Investment other than a
Permitted Investment, and (iv) shall not, and shall not
permit any Restricted Subsidiary to, redeem, repurchase,
defease or otherwise acquire or retire for value prior to
any scheduled maturity, repayment or sinking fund payment
Debt of the Company which is subordinate in right of payment
to the Notes (each of clauses (i) through (iv) being a
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"Restricted Payment") if: (1) an Event of Default, or an
event that with the passing of time or the giving of notice,
or both, would constitute an Event of Default, shall have
occurred and is continuing or would result from such
Restricted Payment, or (2) after giving pro forma effect to
such Restricted Payment as if such Restricted Payment had
been made at the beginning of the applicable four-fiscal-
quarter period, the Company could not Incur at least $1.00
of additional Debt pursuant to the terms of the Indenture
described in the first paragraph of Section 1008 hereof;
provided that in connection with regular quarterly dividends
on the Company's Common Stock (not to exceed $7.5 million in
the aggregate) declared or payable prior to January 31,
1999, the Company's pro forma capacity to Incur additional
Debt shall be computed on a basis that excludes the non-
recurring charges recorded during the Company's 1997 fiscal
year, or (3) upon giving effect to such Restricted Payment,
the aggregate of all Restricted Payments from the date of
issuance of the Notes exceeds the sum of: (a) 50% of
cumulative Consolidated Net Income (or, in the case Consol-
idated Net Income shall be negative, less 100% of such
deficit) of the Company since the date of issuance of the
Notes through the last day of the last full fiscal quarter
ending immediately preceding the date of such Restricted
Payment for which quarterly or annual financial statements
are available (taken as a single accounting period); plus
(b) 100% of the aggregate net proceeds received by the
Company after the date of original issuance of the Notes,
including the fair market value of property other than cash
(determined in good faith by the Board of Directors as
evidenced by a resolution of the Board of Directors filed
with the Trustee), from the issuance and sale (other than to
a Restricted Subsidiary) of Capital Stock (other than
Redeemable Stock) of the Company, options, warrants or other
rights to acquire Capital Stock (other than Redeemable
Stock) of the Company and Debt of the Company that has been
converted into or exchanged for Capital Stock (other than
Redeemable Stock and other than by or from a Restricted
Subsidiary) of the Company after the date of original
issuance of the Notes, provided that any such net proceeds
received by the Company from an employee stock ownership
plan financed by loans from the Company or a Restricted
Subsidiary of the Company shall be included only to the
extent such loans have been repaid with cash on or prior to
the date of determination; plus (c) $40.0 million. Prior to
the making of any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate setting
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forth the computations by which the determinations required
by clauses (2) and (3) above were made and stating that no
Event of Default, or event that with the passing of time or
the giving of notice, or both, would constitute an Event of
Default, has occurred and is continuing or will result from
such Restricted Payment.
Notwithstanding the foregoing, so long as no Event
of Default, or event that with the passing of time or the
giving of notice, or both, would constitute an Event of
Default, shall have occurred and is continuing or would
result therefrom, (i) the Company may pay any dividend on
Capital Stock of any class within 60 days after the
declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in
accordance with the foregoing provisions; (ii) the Company
may refinance any Debt otherwise permitted by clause (vi) of
the second paragraph under Section 1008 above or solely in
exchange for or out of the net proceeds of the substantially
concurrent sale (other than from or to a Restricted Subsid-
iary or from or to an employee stock ownership plan financed
by loans from the Company or a Restricted Subsidiary of the
Company) of shares of Capital Stock (other than Redeemable
Stock) of the Company, provided that the amount of net
proceeds from such exchange or sale shall be excluded from
the calculation of the amount available for Restricted
Payments pursuant to the preceding paragraph; (iii) the
Company may purchase, redeem, acquire or retire any shares
of Capital Stock of the Company solely in exchange for or
out of the net proceeds of the substantially concurrent sale
(other than from or to a Restricted Subsidiary or from or to
an employee stock ownership plan financed by loans from the
Company or a Restricted Subsidiary of the Company) of shares
of Capital Stock (other than Redeemable Stock) of the
Company; and (iv) the Company or a Restricted Subsidiary may
purchase or redeem any Debt from Net Available Proceeds to
the extent permitted under Section 1014. Any payment made
pursuant to clause (i) or (iii) of this paragraph shall be a
Restricted Payment for purposes of calculating aggregate
Restricted Payments pursuant to the preceding paragraph.
SECTION 1013. Limitations on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or
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otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted
Subsidiary of the Company (i) to pay dividends (in cash or
otherwise) or make any other distributions in respect of its
Capital Stock or pay any Debt or other obligation owed to
the Company or any other Restricted Subsidiary; (ii) to make
loans or advances to the Company or any other Restricted
Subsidiary; or (iii) to transfer any of its property or
assets to the Company or any other Restricted Subsidiary.
Notwithstanding the foregoing, the Company may, and may
permit any Restricted Subsidiary to, suffer to exist any
such encumbrance or restriction (a) pursuant to any
agreement in effect on the date of original issuance of the
Notes; (b) pursuant to an agreement relating to any Debt
Incurred by a Person (other than a Restricted Subsidiary of
the Company existing on the date of original issuance of the
Notes or any Restricted Subsidiary carrying on any of the
businesses of any such Restricted Subsidiary) prior to the
date on which such Person became a Restricted Subsidiary of
the Company and outstanding on such date and not Incurred in
anticipation of becoming a Restricted Subsidiary, which
encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the
Person so acquired; (c) pursuant to an agreement effecting
a renewal, refunding or extension of Debt Incurred pursuant
to an agreement referred to in clause (a) or (b) above,
provided, however, that the provisions contained in such
renewal, refunding or extension agreement relating to such
encumbrance or restriction are no more restrictive in any
material respect than the provisions contained in the
agreement the subject thereof, as determined in good faith
by the Board of Directors and evidenced by a resolution of
the Board of Directors filed with the Trustee; (d) pursuant
to an agreement relating to Debt of a Restricted Subsidiary
that is not materially more restrictive than customary
provisions in comparable financing arrangements and which
the Board of Directors determines (as evidenced by a
resolution of the Board of Directors filed with the Trustee)
will not materially impair the Company's ability to make
payments under the Notes; (e) in the case of clause (iii)
above, restrictions contained in any security agreement
(including a capital lease) securing Debt of a Restricted
Subsidiary otherwise permitted under this Indenture, but
only to the extent such restrictions restrict the transfer
of the property subject to such security agreement; (f) in
the case of clause (iii) above, customary nonassignment
provisions entered into in the ordinary course of business
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consistent with past practices in leases and other contracts
to the extent such provisions restrict the transfer or
subletting of any such lease or the assignment of rights
under any such contract; (g) any restriction with respect to
a Restricted Subsidiary of the Company imposed pursuant to
an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock
or assets of such Restricted Subsidiary, provided that
consummation of such transaction would not result in an
Event of Default or an event that, with the passing of time
or the giving of notice or both, would constitute an Event
of Default, that such restriction terminates if such
transaction is closed or abandoned and that the closing or
abandonment of such transaction occurs within one year of
the date such agreement was entered into; or (h) such
encumbrance or restriction is the result of applicable
corporate law or regulation relating to the payment of
dividends or distributions.
SECTION 1014. Limitation on Asset Disposition.
The Company shall not, and shall not permit any
Restricted Subsidiary to, make any Asset Disposition in one
or more related transactions unless: (i) the Company or the
Restricted Subsidiary, as the case may be, receives consid-
eration for such disposition at least equal to the fair
market value for the assets sold or disposed of as deter-
mined by the Board of Directors in good faith and evidenced
by a resolution of the Board of Directors filed with the
Trustee; (ii) at least 85% of the consideration for such
disposition consists of cash or readily marketable cash
equivalents or the assumption of Debt (other than Debt that
is subordinated to the Notes) relating to such assets and
release from all liability on the Debt assumed; and
(iii) all Net Available Proceeds, less any amounts invested
or committed to be invested within 365 days of such
disposition in assets related to the business of the Company
or applied to permanently repay Senior Debt, are applied
within 365 days of such disposition (1) first, to the
permanent repayment or reduction of Senior Debt then
outstanding under any agreements or instruments which would
require such application or prohibit payments pursuant to
clause (2) following, (2) second, to the extent of remaining
Net Available Proceeds, to make an Offer to Purchase
Outstanding Notes at 100% of their principal amount plus
accrued interest to the date of purchase and, to the extent
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required by the terms thereof, any other Debt of the Company
that is pari passu with the Notes at a price no greater than
100% of the principal amount thereof plus accrued interest
to the date of purchase, and (3) third, to the extent of any
remaining Net Available Proceeds, to any other use as determined
by the Company which is not otherwise prohibited by
this Indenture.
SECTION 1015. Transactions with Affiliates and
Related Persons.
The Company shall not, and shall not permit any
Restricted Subsidiary of the Company to, enter into any
transaction (or series of related transactions) with an
Affiliate or Related Person of the Company (other than the
Company or a Wholly Owned Restricted Subsidiary of the
Company), including any Investment, either directly or
indirectly, unless such transaction is on terms no less
favorable to the Company or such Restricted Subsidiary than
those that could be obtained in a comparable arm's-length
transaction with an entity that is not an Affiliate or
Related Person. For any transaction that involves in excess
of $5,000,000, a majority of the disinterested members of
the Board of Directors shall determine that the transaction
satisfies the above criteria and shall evidence such a
determination by a Board Resolution filed with the Trustee.
For any transaction that involves in excess of $10,000,000,
the Company shall also obtain an opinion from a nationally
recognized expert with experience in appraising the terms
and conditions of the type of transaction (or series of
related transactions) for which the opinion is required
stating that such transaction (or series of related
transactions) is on terms no less favorable to the Company
or such Restricted Subsidiary than those that could be
obtained in a comparable arm's-length transaction with an
entity that is not an Affiliate or Related Person of the
Company, which opinion shall be filed with the Trustee.
Notwithstanding anything to the contrary contained
in this Indenture, the foregoing provisions shall not apply
to (i) transactions with any employee, officer or director
of the Company or any of its Restricted Subsidiaries pursuant
to employee benefit plans or compensation arrangements
or agreements entered into in the ordinary course of business,
(ii) purchases or sales of goods or services in the
ordinary course of business, or (iii) transactions with any
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Affiliate or Related Person of the Company in which such
Affiliate or Related Person acquires or purchases the capital
stock of the Company or any Restricted Subsidiary at
fair market value.
SECTION 1016. Change of Control.
Within 60 days of the occurrence of a Change of
Control, the Company will be required to make an Offer to
Purchase all Outstanding Notes at a purchase price equal to
101% of their principal amount plus accrued interest to but
excluding the date of purchase. A "Change of Control" will
be deemed to have occurred at such time as either (a) any
Person (other than a Permitted Holder) or any Persons acting
together that would constitute a "group" (a "Group") for
purposes of Section 13(d) of the Exchange Act, or any
successor provision thereto (other than Permitted Holders),
together with any Affiliates or Related Persons thereof,
shall beneficially own (within the meaning of Rule 13d-3
under the Exchange Act, or any successor provision thereto),
directly or indirectly, at least 50% of the aggregate voting
power of all classes of Voting Stock of the Company (for the
purposes of this clause (a) a person shall be deemed to
beneficially own the Voting Stock of a corporation that is
beneficially owned (as defined above) by another corporation
(a "parent corporation"), if such person beneficially owns
(as defined above) at least 50% of the aggregate voting
power of all classes of Voting Stock of such parent
corporation); or (b) any Person or Group (other than
Permitted Holders), together with any Affiliates or Related
Persons thereof, shall succeed in having a sufficient number
of its nominees elected to the Board of Directors of the
Company such that such nominees, when added to any existing
director remaining on the Board of Directors of the Company
after such election who was a nominee of or is an Affiliate
or Related Person of such Person or Group, will constitute a
majority of the Board of Directors of the Company; or
(c) the Company shall, directly or indirectly, transfer,
sell, lease or otherwise dispose of all or substantially all
of its assets; or (d) there shall be adopted a plan of
liquidation or dissolution of the Company; provided,
however, that a transaction effected to create a holding
company of the Company, (i) pursuant to which the Company
becomes a wholly-owned Subsidiary of such holding company,
and (ii) as a result of which the holders of Capital Stock
of such holding company are substantially the same as the
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holders of Capital Stock of the Company immediately prior to
such transaction, shall not be deemed to involve a "Change
of Control".
In the event that the Company makes an Offer to
Purchase the Notes, the Company intends to comply with any
applicable securities laws and regulations, including any
applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
SECTION 1017. Provision of Financial Information.
For so long as any of the Notes are outstanding,
the Company shall file with the Commission the annual
reports, quarterly reports and other documents which the
Company is required to file with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act or any successor
provisions thereto.
SECTION 1018. Unrestricted Subsidiaries.
The Company may designate any Subsidiary of the
Company to be an "Unrestricted Subsidiary" as provided below
in which event such Subsidiary and each other Person that is
then or thereafter becomes a Subsidiary of such Subsidiary
will be deemed to be an Unrestricted Subsidiary.
"Unrestricted Subsidiary" means (1) any Subsidiary
designated as such by the Board of Directors as set forth
below where (a) neither the Company nor any of its other
Subsidiaries (other than another Unrestricted Subsidiary)
(i) provides credit support for, or any Guarantee of, any
Debt of such Subsidiary or any Subsidiary of such Subsidiary
(including any undertaking, agreement or instrument
evidencing such Debt) or (ii) is directly or indirectly
liable for any Debt of such Subsidiary or any Subsidiary of
such Subsidiary, and (b) no default with respect to any Debt
of such Subsidiary or any Subsidiary of such Subsidiary
(including any right which the holders thereof may have to
take enforcement action against such Subsidiary) would
permit (upon notice, lapse of time or both) any holder of
any other Debt of the Company and its Subsidiaries (other
than another Unrestricted Subsidiary) to declare a default
on such other Debt or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity
and (2) any Subsidiary of an Unrestricted Subsidiary. The
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Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property
of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or
otherwise an Unrestricted Subsidiary, provided that either
(x) the Subsidiary to be so designated has total assets of
$1,000 or less or (y) immediately after giving effect to
such designation, the Company could Incur at least $1.00 of
additional Debt pursuant to the first paragraph under
Section 1008 hereof and provided, further, that the Company
could make a Restricted Payment in an amount equal to the
greater of the fair market value and book value of such
Subsidiary pursuant to Section 1012 hereof and such amount
is thereafter treated as a Restricted Payment for the
purpose of calculating the aggregate amount available for
Restricted Payments thereunder.
SECTION 1019. Statement by Officers as to Default;
Compliance Certificates.
(a) The Company will deliver to the Trustee,
within 90 days after the end of each fiscal quarter of the
Company ending after the date hereof an Officers' Certificate,
stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions
of Section 801 or Sections 1004 to 1018, inclusive,
and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may
have knowledge.
(b) The Company shall deliver to the Trustee, as
soon as possible and in any event within 10 days after the
Company becomes aware or should reasonably become aware of
the occurrence of an Event of Default or an event which,
with notice or the lapse of time or both, would constitute
an Event of Default, an Officers' Certificate setting forth
the details of such Event of Default or default, and the
action which the Company proposes to take with respect
thereto.
(c) The Company shall deliver to the Trustee
within 90 days after the end of each fiscal year a written
statement by the Company's independent public accountants
stating (A) that their audit examination was conducted in
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accordance with generally accepted accounting standards, and
(B) whether, in connection with their audit examination, any
event which, with notice or the lapse of time or both, would
constitute an Event of Default has come to their attention
insofar as it relates to accounting matters and, if such a
default has come to their attention, specifying the nature
and period of the existence thereof.
SECTION 1020. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Section
801 and Sections 1004 to 1018, if before the time for
such compliance the Holders of at least a majority in
principal amount of the Outstanding Notes shall, by Act of
such Holders, either waive such compliance in such instance
or generally waive compliance with such covenant or condition,
but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in
respect of any such covenant or condition shall remain in
full force and effect; provided, however, with respect to an
Offer to Purchase as to which an Offer has been mailed, no
such waiver may be made or shall be effective against any
Holder tendering Notes pursuant to such Offer, and the
Company may not omit to comply with the terms of such Offer
as to such Holder.
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Right of Redemption.
The Notes may be redeemed at the option of the
Company, in whole or in part, at any time on or after May 1,
2003, and prior to maturity, at the Redemption Prices
specified in the form of Note hereinbefore set forth
together with accrued interest to, but excluding, the
Redemption Date.
In addition, if on or before May 1, 2001 the
Company receives net proceeds from the sale of its Common
Stock in one or more Public Equity Offerings, the Company
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may, at its option, use an amount equal to all or a portion
of any such net proceeds to redeem Notes in an aggregate
principal amount of up to 33 1/3% of the original aggregate
principal amount of the Notes, provided, however, that
Notes having a principal amount equal to at least 66 2/3% of
the original aggregate principal amount of the Notes remain
outstanding after such redemption. Such redemption must
occur on a Redemption Date within 90 days of such sale and
upon not less than 30 nor more than 60 days' notice mailed
to each Holder of Notes to be redeemed at such Holder's
address appearing in the Security Register, in amounts of
$1,000 or an integral multiple of $1,000, at a redemption
price of 109.50% of the principal amount of the Notes plus
accrued interest to but excluding the Redemption Date
(subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest
Payment Date that is on or prior to the Redemption Date).
If less than all the Notes are to be redeemed, the
Trustee shall select, in such manner as it shall deem fair
and appropriate, the particular Notes to be redeemed or any
portion thereof that is an integral multiple of $1,000.
The Notes will not have the benefit of any sinking
fund.
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the
Company, as permitted by any provision of this Indenture,
shall be made in accordance with such provision and this
Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes
pursuant to Section 1101 shall be evidenced by a Board Resolution.
In case of any redemption at the election of the
Company of less than all the Notes, the Company shall, at
least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to
the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Notes to be redeemed.
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SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
If less than all the Notes are to be redeemed, the
particular Notes to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Notes not previously called for
redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or any integral
multiple thereof) of the principal amount of Notes of a
denomination larger than $1,000.
The Trustee shall promptly notify the Company and
each Note Registrar in writing of the Notes selected for
redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption of Notes shall relate, in the case of any Notes
redeemed or to be redeemed only in part, to the portion of
the principal amount of such Notes which has been or is to
be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of
Notes to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
the Redemption Price,
(3) if less than all the Outstanding Notes
are to be redeemed, the identification (and, in
the case of partial redemption, the principal
amounts) of the particular Notes to be redeemed,
(4) that on the Redemption Date the
Redemption Price will become due and payable upon
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each such Note to be redeemed and that interest
thereon will cease to accrue on and after said
date, and
(5) the place or places where such Notes are
to be surrendered for payment of the Redemption
Price.
Notice of redemption of Notes to be redeemed at
the election of the Company shall be given by the Company
or, at the Company's request, by the Trustee in the name and
at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Notes which are to be redeemed
on that date.
SECTION 1107. Notes Payable on Redemption Date.
Notice of redemption having been given as afore-
said, the Notes so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price plus
accrued interest) such Notes shall cease to bear interest.
Upon surrender of any such Note for redemption in accordance
with said notice, such Note shall be paid by the Company at
the Redemption Price together with accrued interest to the
Redemption Date; provided, however, that instalments of
interest whose Stated Maturity is on or prior to the Redemp-
tion Date shall be payable to the Holders of such Notes, or
one or more Predecessor Notes, registered as such at the
close of business on the relevant Record Dates according to
their terms and the provisions of Section 307.
If any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal
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(and premium, if any) shall, until paid, bear interest from
the Redemption Date at the rate provided by the Note.
SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part
shall be surrendered at an office or agency of the Company
designated for that purpose pursuant to Section 1002 (with,
if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Note without service
charge, a new Note or Notes, of any authorized denomination
as requested by such Holder, in aggregate principal amount
equal to and in exchange for the unredeemed portion of the
principal of the Note so surrendered.
ARTICLE TWELVE
Subordination of Notes
SECTION 1201. Notes Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder
of a Note, by his acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner herein-
after set forth in this Article (subject to the provisions
of Article Four and Article Thirteen), the payment of the
principal of (and premium, if any) and interest on each and
all of the Notes (and any liquidated damages under the
Exchange and Registration Rights Agreement ("Additional
Amounts")) are hereby expressly made subordinate and subject
in right of payment to the prior payment in full in cash of
all Senior Debt of the Company.
SECTION 1202. Payment Over of Proceeds Upon
Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reor-
ganization or other similar case or proceeding in connection
therewith, relative to the Company or to its creditors, as
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such, or to its assets, or (b) any liquidation, dissolution
or other winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or bank-
ruptcy, or (c) any assignment for the benefit of creditors
or any other marshaling of assets and liabilities of the
Company, then and in any such event specified in (a), (b) or
(c) above (each such event, if any, herein sometimes
referred to as a "Proceeding") the holders of Senior Debt
shall be entitled to receive or retain payment in full in
cash or cash equivalents of all amounts due or to become due
on or in respect of all Senior Debt, or provision shall be
made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior
Debt, before the Holders of the Notes are entitled to
receive any payment or distribution of any kind or
character, whether in cash, property or securities, on
account of principal of (or premium, if any) or interest on
(or Additional Amounts) or other obligations in respect of
the Notes or on account of any purchase, redemption or other
acquisition of Notes by the Company or any Subsidiary of the
Company (all such payments, distributions, purchases and
acquisitions herein referred to, individually and collectively,
as a "Notes Payment"), and to that end the holders
of Senior Debt shall be entitled to receive, for application
to the payment thereof, any Notes Payment which may be
payable or deliverable in respect of the Notes in any such
Proceeding.
In the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any
Note shall have received any Notes Payment before all Senior
Debt of the Company is paid in full in cash or cash
equivalents or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the
holders of such Debt, then and in such event such Notes
Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy or other person making payment or
distribution of assets of the Company for the application to
the payment of all Senior Debt remaining unpaid, to the
extent necessary to pay the Senior Debt in full.
For purposes of this Article only, the words "any
payment or distribution of any kind or character, whether in
cash, property or securities" shall not be deemed to include
a payment or distribution of stock or securities of the
Company provided for by a plan of reorganization or read-
justment authorized by an order or decree of a court of
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competent jurisdiction in a reorganization proceeding under
any applicable bankruptcy law or of any other corporation
provided for by such plan of reorganization or readjustment
which stock or securities are subordinated in right of
payment to all then outstanding Senior Debt to substantially
the same extent as the Notes are so subordinated as provided
in this Article. The consolidation of the Company with, or
the merger of the Company into, another Person or the liqui-
dation or dissolution of the Company following the convey-
ance or transfer of all or substantially all of its
properties and assets as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall
not be deemed a Proceeding for the purposes of this Section
if the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance
or transfer such properties and assets as an entirety, as
the case may be, shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions
set forth in Article Eight.
SECTION 1203. No Payment When Senior Debt in Default.
In the event that any Company Senior Payment
Default (as defined below) shall have occurred and be
continuing, then no Notes Payment shall be made, and no
defeasance of the Notes may be made, unless and until such
Company Senior Payment Default shall have been cured or
waived or shall have ceased to exist or all amounts then due
and payable in respect of Senior Debt shall have been paid
in full in cash or cash equivalents, or provision shall have
been made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior
Debt. "Company Senior Payment Default" means any default in
the payment of principal of (or premium, if any) or interest
on Designated Senior Debt when due, whether at the Stated
Maturity of any such payment or by declaration of acceleration,
call for redemption or otherwise.
Upon the occurrence of a Senior Nonmonetary
Default and receipt of written notice by the Company and the
Trustee of the occurrence of such Senior Nonmonetary Default
from any holder of Designated Senior Debt (or any trustee,
agent or other representative for such holder) which is the
subject of such Senior Nonmonetary Default, no Notes Payment
may be made, and no defeasance of the Notes, may be made for
a period (the "Payment Blockage Period") commencing on the
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date of the receipt of such notice and ending the earlier of
(i) the date on which such Senior Nonmonetary Default shall
have been cured or waived or ceased to exist or all Senior
Debt the subject of such Senior Nonmonetary Default shall
have been discharged and (ii) the 179th day after the date
of the receipt of such notice. In any event, no more than
one Payment Blockage Period may be commenced during any 360-
day period and there shall be a period of at least 181 days
during each 360-day period when no Payment Blockage Period
is in effect. In addition, no Senior Nonmonetary Default
that existed or was continuing on the date of the commencement
of a Payment Blockage Period may be made the basis of
the commencement of a subsequent Payment Blockage Period
whether or not within a period of 360 consecutive days,
unless such Senior Nonmonetary Default shall have been cured
for a period of not less than 90 consecutive days. "Senior
Nonmonetary Default" means the occurrence or existence and
continuance of an event of default with respect to Company
Senior Debt, other than a Senior Payment Default, permitting
the holders of the Designated Senior Debt (or a trustee or
other agent on behalf of the holders thereof) then to
declare such Designated Senior Debt due and payable prior to
the date on which it would otherwise become due and payable.
The failure to make any payment on the Notes by
reason of the provisions of the Indenture described under
this Article Twelve will not be construed as preventing the
occurrence of an Event of Default with respect to the Notes
arising from any such failure to make payment. Upon termination
of any period of payment blockage the Company shall
resume making any and all required payments in respect of
the Notes, including any missed payments.
In the event that, notwithstanding the foregoing,
the Company shall make any Company Notes Payment to the
Trustee or any Holder prohibited by the foregoing of this
Section, and if such fact shall, at or prior to the time of
such Notes Payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such
Notes Payment shall be paid over and delivered forthwith to
the holders of the Senior Debt of the Company.
The subordination provisions described above will
not be applicable to payments in respect of the Notes from a
defeasance trust established in connection with any
defeasance or covenant defeasance of the Notes as described
under Article Thirteen.
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The provisions of this Section shall not apply to
any Notes Payment with respect to which Section 1202 would
be applicable.
SECTION 1204. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in
this Indenture or in any of the Notes shall prevent (a) the
Company, at any time except during the pendency of any
Proceeding referred to in Section 1202 or under the
conditions described in Section 1203, from making Notes
Payments, or (b) the application by the Trustee of any money
deposited with it hereunder to Notes Payments or the
retention of such Notes Payment by the Holders, if, at the
time of such application by the Trustee, it did not have
knowledge that such Notes Payment would have been prohibited
by the provisions of this Article.
SECTION 1205. Subrogation to Rights of Holders of
Senior Debt.
Subject to the payment in full in cash or cash
equivalents of all amounts due or to become due on or in
respect of Senior Debt of the Company or the provision for
such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, the
Holders of the Notes shall be subrogated to the rights of
the holders of such Debt to receive payments and
distributions of cash, property and securities applicable to
such Debt until the principal of (and premium, if any) and
interest on the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the
holders of the Senior Debt of the Company of any cash, property
or securities to which the Holders of the Notes or the
Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Debt by Holders of the
Notes or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt and the Holders
of the Notes, be deemed to be a payment or distribution by
the Company to or on account of the Senior Debt of the
Company.
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SECTION 1206. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are
intended solely for the purpose of defining the relative
rights of the Holders on the one hand and the holders of
Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is
intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Debt and the Holders
of the Notes, the obligation of the Company, which is
absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Debt, is
intended to rank equally with all other general obligations
of the Company), to pay to the Holders of the Notes the
principal of (and premium, if any) and interest on the Notes
as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights
against the Company of the Holders of the Notes and creditors
of the Company, other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Note from
exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior
Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
SECTION 1207. Trustee to Effectuate Subordination.
Each Holder of a Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate
the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 1208. No Waiver of Subordination Provisions.
No right of any present or future holder of any
Senior Debt to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by
any act or failure to act by any such holder, or by any
noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged
with.
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Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Debt may, at any
time and from time to time, without the consent of or notice
to the Trustee or the Holders of the Notes, without incur-
ring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of the
Notes to the holders of Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter,
Senior Debt, or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt;
(iii) release any Person liable in any manner for the
collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other
Person.
SECTION 1209. Notice to Trustee.
The Company shall give prompt written notice to
the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in
respect of the Notes, provided that failure to notify will
not affect the subordination provisions set forth herein.
Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the
Trustee in respect of the Notes, unless and until the
Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee
therefor at its Corporate Trust Office; and, prior to the
receipt of any such written notice, the Trustee, subject to
the provisions of Section 601, shall be entitled in all
respects to assume that no such facts exist.
Subject to the provisions of Section 601, the
Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a
holder of Senior Debt (or a trustee therefor) to establish
that such notice has been given by a holder of Senior Debt
(or a trustee therefor). In the event that the Trustee
determines in good faith that further evidence is required
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with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution
pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this
Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 1210. Reliance on Judicial Order or Certificate
of Liquidating Agent.
Upon any payment or distribution of assets or
securities of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 601, and the
Holders of the Notes shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction
in which such Proceeding is pending, or a certificate
of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered
to the Trustee or to the Holders of Notes, for the purpose
of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this
Article.
SECTION 1211. Trustee Not Fiduciary for Holders of
Senior Debt.
The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly
pay over or distribute to Holders of Notes or to the
Company or to any other Person cash, property or securities
to which any holders of Senior Debt shall be entitled by
virtue of this Article or otherwise.
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SECTION 1212. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article with
respect to any Senior Debt which may at any time be held by
it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
Nothing in this Article shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 607.
SECTION 1213. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than
the Trustee shall have been appointed by the Company and be
then acting hereunder, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article
in addition to or in place of the Trustee; provided,
however, that Section 1212 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
SECTION 1214. Defeasance of this Article Twelve.
The subordination of the Notes provided by this
Article Twelve is expressly made subject to the provisions
for defeasance or covenant defeasance in Article Thirteen
hereof and, anything herein to the contrary notwithstanding,
upon the effectiveness of any such defeasance or covenant
defeasance effected in compliance with this Indenture, the
Notes then outstanding shall thereupon cease to be
subordinated pursuant to this Article Twelve.
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ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
SECTION 1301. Company's Option to Effect Defeasance
or Covenant Defeasance.
The Company may at its option by Board Resolution,
at any time, in accordance with the Exchange and
Registration Rights Agreement, elect to have either
Section 1302 or Section 1303 applied to the Outstanding
Notes upon compliance with the conditions set forth below in
this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided
in Section 1301 applicable to this Section, the Company
shall be deemed to have been discharged from its obligations
with respect to the Outstanding Notes, and the provisions of
Article Twelve hereof shall cease to be effective, on the
date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by
the Outstanding Notes and to have satisfied all its other
obligations under such Notes and this Indenture insofar as
such Notes are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging
the same), except for the following which shall survive
until otherwise terminated or discharged hereunder: (A) the
rights of Holders of such Notes to receive, solely from the
trust fund described in Section 1304 and as more fully set
forth in such Section, payments in respect of the principal
of (and premium, if any) and interest on such Notes when
such payments are due, (B) the Company's obligations with
respect to such Notes under Sections 304, 305, 306, 1002 and
1003, (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and (D) this Article Thirteen.
Subject to compliance with this Article Thirteen, the
Company may exercise its option under this Section 1302
notwithstanding the prior exercise of its option under
Section 1303.
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SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided
in Section 1301 applicable to this Section, (i) the Company
shall be released from its obligations under Sections 1005
through 1018, inclusive, and Clauses (3), (4) and (5) of
Section 801, (ii) the occurrence of an event specified in
Sections 501(3), 501(4) (with respect to Clauses (1), (3),
(4) or (5) of Section 801), 501(5) (with respect to any of
Sections 1005 through 1018, inclusive), 501(6) and 501(7)
shall not be deemed to be an Event of Default and (iii) the
provisions of Article Twelve hereof shall cease to be
effective on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that the
Company may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in
any such Section, Clause or Article, whether directly or
indirectly by reason of any reference elsewhere herein to
any such Section, Clause or Article or by reason of any
reference in any such Section, Clause or Article to any
other provision herein or in any other document, but the
remainder of this Indenture and such Notes shall be
unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to application
of either Section 1302 or Section 1303 to the then
Outstanding Notes:
(1) The Company shall irrevocably have
deposited or caused to be deposited with the
Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to
comply with the provisions of this Article
Thirteen applicable to it) as trust funds in trust
for the purpose of making the following payments,
specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of
such Notes, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled
payment of principal and interest in respect
thereof in accordance with their terms will
provide, not later than one day before the due
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date of any payment, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public
accountants expressed in a written certification
thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and
discharge, the principal of (, premium, if any,)
and each instalment of interest on the Notes on
the Stated Maturity of such principal or
instalment of interest in accordance with the
terms of this Indenture and of such Notes. For
this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the
United States of America for the payment of which
its full faith and credit is pledged or
(y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality
of the United States of America the
payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United
States of America, which, in either case, are not
callable or redeemable at the option of the issuer
thereof, and shall also include a depository
receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended)
as custodian with respect to any such U.S.
Government Obligation or a specific payment of
principal of or interest on any such U.S.
Government Obligation held by such custodian for
the account of the holder of such depository
receipt, provided that (except as required by law)
such custodian is not authorized to make any
deduction from the amount payable to the holder of
such depository receipt from any amount received
by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of
or interest on the U.S. Government Obligation
evidenced by such depository receipt.
(2) In the case of an election under Section
1302, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been
published by, the Internal Revenue Service a
ruling, or (y) since the date of this Indenture
there has been a change in the applicable Federal
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income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that,
the Holders of the Outstanding Notes will not
recognize gain or loss for Federal income tax
purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal
income tax on the same amount, in the same manner
and at the same times as would have been the case
if such deposit, defeasance and discharge had not
occurred.
(3) In the case of an election under Section 1303,
the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that
the Holders of the Outstanding Notes will not
recognize gain or loss for Federal income tax
purposes as a result of such deposit and covenant
defeasance and will be subject to Federal income
tax on the same amount, in the same manner and at
the same times as would have been the case if such
deposit and covenant defeasance had not occurred.
(4) The Company shall have delivered to the
Trustee an Officer's Certificate to the effect
that the Notes, if then listed on any securities
exchange, will not be delisted as a result of such
deposit.
(5) Such defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting
interest as defined in Section 608 and for
purposes of the Trust Indenture Act with respect
to any securities of the Company.
(6) At the time of such deposit: (A) no
default in the payment of all or a portion of
principal of (or premium, if any) or interest on
or other obligations in respect of any Senior Debt
shall have occurred and be continuing, and no
event of default with respect to any Senior Debt
shall have occurred and be continuing and shall
have resulted in such Senior Debt becoming or
being declared due and payable prior to the date
on which it would otherwise have become due and
payable and (B) no other event of default with
respect to any Senior Debt shall have occurred and
be continuing permitting (after notice or the
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lapse of time, or both) the holders of such Senior
Debt (or a trustee on behalf of the holders
thereof) to declare such Senior Debt due and
payable prior to the date on which it would
otherwise have become due and payable, or, in the
case of either Clause (A) or Clause (B) above,
each such default or event of default shall have
been cured or waived or shall have ceased to
exist.
(7) No Event of Default or event which with
notice or lapse of time or both would become an
Event of Default shall have occurred and be
continuing.
(8) Such defeasance or covenant defeasance
shall not result in a breach or violation of, or
constitute a default under, any other agreement or
instrument to which the Company is a party or by
which it is bound.
(9) The Company shall have delivered to the
Trustee an Officer's Certificate and an Opinion of
Counsel (which Opinion of Counsel may rely, as to
factual matters, on such Officer's Certificate),
each stating that all conditions precedent
provided for relating to either the defeasance
under Section 1302 or the covenant defeasance
under Section 1303 (as the case may be) have been
complied with.
(10) Such defeasance or covenant defeasance
shall not result in the trust arising from such
deposit constituting an investment company as
defined in the Investment Company Act of 1940, as
amended, or such trust shall be qualified under
such act or exempt from regulation thereunder.
SECTION 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of
Section 1003, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee
(or other qualifying trustee--collectively, for purposes of
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this Section 1305, the "Trustee") pursuant to Section 1304
in respect of the Notes shall be held in trust uninvested
and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Notes, of all sums due and
to become due thereon in respect of principal (and premium,
if any) and interest, but such money need not be segregated
from other funds except to the extent required by law.
Money so held in trust shall not be subject to the provisions
of Article Twelve.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant
to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the Outstanding
Notes.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon Company Request any money or
U.S. Government Obligations held by it as provided in Section
1304 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are
in excess of the amount thereof which would then be required
to be deposited to effect an equivalent defeasance or covenant
defeasance.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money in accordance with Section 1302 or 1303 by
reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to this Article
Thirteen until such time as the Trustee or Paying Agent is
-123-
<PAGE>
permitted to apply all such money in accordance with Section
1302 or 1303; provided, however, that if the Company makes
any payment of principal of (and premium, if any) or
interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights
of the Holders of such Note to receive such payment from the
money held by the Trustee or the Paying Agent.
____________________
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to
be an original, but all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as
of the day and year first above written.
PHILLIPS-VAN HEUSEN CORPORATION
By
Name:
Title:
Attest:
__________________________
UNION BANK OF CALIFORNIA, N.A.
By
Name: Gillian Wallace
Title: Assistant Vice President
-124-
<PAGE>
STATE OF _________ ) ss.:
COUNTY OF _________)
On the _____ day of __________, 19__, before me
personally came ___________________________, to me known, who,
being by me duly sworn, did depose and say that [he -- she] is
___________________________________________________ of
___________________________, one of the corporations described
in and which executed the foregoing instrument; that [he --
she] knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said
corporation; and that [he -- she] signed [his -- her] name
thereto by like authority.
______________________________
STATE OF __________) ss.:
COUNTY OF _________)
On the _____ day of __________, 19__, before me
personally came ___________________________, to me known, who,
being by me duly sworn, did depose and say that [he -- she] is
___________________________________________________ of
___________________________, one of the corporations described
in and which executed the foregoing instrument; that [he --
she] knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said
corporation; and that [he -- she] signed [his -- her] name
thereto by like authority.
______________________________
-125-
<PAGE>
SCHEDULE I
7.75% Debentures due 2023
Capital Lease re: Industrial Development Board of Ozark, AL
(Interest rate: 6.50% - 7.75%; Maturity date: 09/01/99;
Amount outstanding as of 03/31/98: $670,000)
-126-
<PAGE>
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Sec. 306(b)(i) of the Indenture)
[ ]
[ ]
[ ]
[ ]
Re: 9 1/2% Senior Subordinated Notes
due May 1, 2008 of Phillips-
Van Heusen Corporation (the
"Securities")
Reference is made to the Indenture, dated as of
April 22, 1998 (the "Indenture"), from Phillips-Van Heusen
Corporation (the "Company") to Union Bank of California,
N.A., as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S. $_______________
principal amount of Securities, which are evidenced by the
following certificate(s) (the "Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below
(the "Undersigned") hereby certifies that either (i) it is
the sole beneficial owner of the Specified Securities or
(ii) it is acting on behalf of all the beneficial owners of
the Specified Securities and is duly authorized by them to
do so. Such beneficial owner or owners are referred to
herein collectively as the "Owner". The Specified
Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner.
A-1
<PAGE>
The Owner has requested that the Specified
Securities be transferred to a person (the "Transferee") who
will take delivery in the form of a Regulation S Security.
In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act,
it is being effected in accordance with Rule 904 or Rule 144
under the Securities Act and with all applicable securities
laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further
certifies as follows:
(1) Rule 904 Transfers. If the transfer is being
effected in accordance with Rule 904:
(A) the Owner is not a distributor of the
Securities, an affiliate of the Company or any
such distributor or a person acting on behalf of
any of the foregoing;
(B) the offer of the Specified Securities
was not made to a person in the United States;
(C) either:
(i) at the time the buy order was
originated, the Transferee was outside the
United States or the Owner and any person
acting on its behalf reasonably believed that
the Transferee was outside the United States,
or
(ii) the transaction is being executed
in, on or through the facilities of the
Eurobond market, as regulated by the
Association of International Bond Dealers, or
another designated offshore securities market
and neither the Owner nor any person acting
on its behalf knows that the transaction has
been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been
made in the United States by or on behalf of the
Owner or any affiliate thereof;
A-2
<PAGE>
(E) if the Owner is a dealer in securities
or has received a selling concession, fee or other
renumeration in respect of the Specified
Securities, and the transfer is to occur during
the Restricted Period, then the requirements of
Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or
scheme to evade the registration requirements of
the Securities Act.
(2) Rule 144 Transfers. If the transfer is being
effected pursuant to Rule 144:
(A) the transfer is occurring after a
holding period of at least one year (computed in
accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of
the Company, whichever is later, and is being
effected in accordance with the applicable amount,
manner of sale and notice requirements of Rule
144; or
(B) the transfer is occurring after a
holding period of at least two years has elapsed
since the Specified Securities were last acquired
from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not,
and during the preceding three months has not
been, an affiliate of the Company.
A-3
<PAGE>
This certificate and the statements contained
herein are made for your benefit and the benefit of the
Company and the Initial Purchasers.
Dated:
(Print the name of the Undersigned,
as such term is defined in the second
paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title
of the person signing on behalf of
the Undersigned must be stated.)
A-4
<PAGE>
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Sec. 306(b)(ii) of the Indenture)
[ ]
[ ]
[ ]
[ ]
Re: 9 1/2% Senior Subordinated Notes
due May 1, 2008 of Phillips-
Van Heusen Corporation (the
"Securities")
Reference is made to the Indenture, dated as of
April 22, 1998 (the "Indenture"), from Phillips-Van Heusen
Corporation (the "Company") to Union Bank of California,
N.A., as Trustee. Terms used herein and defined in the
Indenture or in Rule 144A or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S.$_____________
principal amount of Securities, which are evidenced by the
following certificate(s) (the "Specified Securities"):
CUSIP No(s). ___________________________
ISIN No(s) If any. ____________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below
(the "Undersigned") hereby certifies that either (i) it is
the sole beneficial owner of the Specified Securities or
(ii) it is acting on behalf of all the beneficial owners of
the Specified Securities and is duly authorized by them to
do so. Such beneficial owner or owners are referred to
herein collectively as the "Owner". The Specified
Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified
Securities be transferred to a person (the "Transferee") who
B-1
<PAGE>
will take delivery in the form of a Restricted Security. In
connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act,
it is being effected in accordance with Rule 144A or Rule
144 under the Securities Act and all applicable securities
laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further
certifies as:
(1) Rule 144A Transfers. If the transfer is
being effected in accordance with Rule 144A:
(A) the Specified Securities are being
transferred to a person that the Owner and any
person acting on its behalf reasonably believe is
a "qualified institutional buyer" within the
meaning of Rule 144A, acquiring for its own
account or for the account of a qualified institutional
buyer; and
(B) the Owner and any person acting on its
behalf have taken reasonable steps to ensure that
the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the
transfer; and
(2) Rule 144 Transfers. If the transfer is being
effected pursuant to Rule 144:
(A) the transfer is occurring after a
holding period of at least one year (computed in
accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of
the Company, whichever is later, and is being
effected in accordance with the applicable amount,
manner of sale and notice requirements of Rule
144; or
(B) the transfer is occurring after a
holding period of at least two years has elapsed
since the Specified Securities were last acquired
from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not,
and during the preceding three months has not
been, an affiliate of the Company.
B-2
<PAGE>
This certificate and the statements contained
herein are made for your benefit and the benefit of the
Company and the Initial Purchasers.
Dated:
(Print the name of the Undersigned,
as such term is defined in the second
paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title
of the person signing on behalf of
the Undersigned must be stated.)
B-3
<PAGE>
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Sec. 306(c))
[ ]
[ ]
[ ]
[ ]
Re: 9 1/2% Senior Subordinated Notes
due May 1, 2008 of Phillips-
Van Heusen Corporation (the
"Securities")
Reference is made to the Indenture, dated as of
April 22, 1998 (the "Indenture"), from Phillips-Van Heusen
Corporation (the "Company") to Union Bank of California,
N.A., as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S. $_____________
principal amount of Securities, which are evidenced by the
following certificate(s) (the "Specified Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below
(the "Undersigned") hereby certifies that either (i) it is
the sole beneficial owner of the Specified Securities or
(ii) it is acting on behalf of all the beneficial owners of
the Specified Securities and is duly authorized by them to
do so. Such beneficial owner or owners are referred to
herein collectively as the "Owner". If the Specified
Securities are represented by a Global Security, they are
held through the Depositary or an Agent Member in the name
of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Global
Security, they are registered in the name of the Undersigned,
as or on behalf of the Owner.
C-1
<PAGE>
The Owner has requested that the Specified
Securities be exchanged for Securities bearing no Securities
Act Legend pursuant to Section 306(c) of the Indenture. In
connection with such exchange, the Owner hereby certifies
that the exchange is occurring after a holding period of at
least three years (computed in accordance with paragraph (d)
of Rule 144) has elapsed since the Specified Securities were
last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and
during the preceding three months has not been, an affiliate
of the Company. The Owner also acknowledges that any future
transfers of the Specified Securities must comply with all
applicable securities laws of the states of the United
States and other jurisdictions.
This certificate and the statements contained
herein are made for your benefit and the benefit of the
Company and the Initial Purchasers.
Dated:
(Print the name of the Undersigned,
as such term is defined in the second
paragraph of this certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title
of the person signing on behalf of
the Undersigned must be stated.)
C-2
<PAGE>
ANNEX D -- Form of Certification to
be Given by Holders of Beneficial
Interest in a Regulation S Temporary
Global Note
OWNER SECURITIES CERTIFICATION
PHILLIPS-VAN HEUSEN CORPORATION
9 1/2% Senior Subordinated Notes due May 1, 2008
This is to certify that, as of the date hereof,
$________ of the above-captioned Notes are beneficially
owned by non-U.S. person(s). As used in this paragraph, the
term "U.S. person" has the meaning given to it by Regulation
S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested
telex on or prior to the date on which you intend to submit
your certification relating to the Notes held by you for our
account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed
that this certification applies as of such date.
We understand that this certificate is required in
connection with certain securities laws of the United
States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with
which this certificate is or would be relevant, we
irrevocably authorize you to produce this certificate to any
interested party in such proceedings.
Dated:______________, ____
By:____________________________________________
As, or as agent for, the beneficial owner(s)
of the Notes to which this certificate
relates.
D-1
<PAGE>
ANNEX E -- Form of Certification to
be Given by the Euroclear Operator
or Cedel S.A.
DEPOSITARY SECURITIES CERTIFICATION
PHILLIPS-VAN HEUSEN CORPORATION
9 1/2% Senior Subordinated Notes due May 1, 2008
This is to certify that, with respect to
U.S.$___________ principal amount of the above-captioned
Notes, except as set forth below, we have received in
writing, by tested telex or by electronic transmission, from
member organizations appearing in our records as persons
being entitled to a portion of the principal amount of Notes
set forth above (our "Member Organizations"), certifications
with respect to such portion, substantially to the effect
set forth in the Indenture.
We further certify (i) that we are not making
available herewith for exchange (or, if relevant, exercise
of any rights or collection of any interest) any portion of
the Regulation S Temporary Global Note (as defined in the
Indenture) excepted in such certifications and (ii) that as
of the date hereof we have not received any notification
from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to
any portion of the part submitted herewith for exchange (or,
if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of
the date hereof.
We understand that this certification is required
in connection with certain securities laws of the United
States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with
E-1
<PAGE>
which this certification is or would be relevant, we
irrevocably authorize you to produce this certification to
any interested party in such proceedings.
Dated: _____________, _______
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Brussels office,
as operator of the Euroclear System]
or
[CEDEL S.A.]
By____________________________
E-2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PHILLIPS-VAN HEUSEN CORPORATION FINANCIAL STATEMENTS INCLUDED IN ITS 10-Q REPORT
FOR THE QUARTER ENDED MAY 3, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-END> MAY-03-1998
<CASH> 12,694
<SECURITIES> 0
<RECEIVABLES> 104,670
<ALLOWANCES> 2,769
<INVENTORY> 261,739
<CURRENT-ASSETS> 411,328
<PP&E> 92,614<F1>
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 690,245
<CURRENT-LIABILITIES> 162,837
<BONDS> 249,349
0
0
<COMMON> 27,189
<OTHER-SE> 185,608
<TOTAL-LIABILITY-AND-EQUITY> 690,245
<SALES> 295,765
<TOTAL-REVENUES> 295,765
<CGS> 193,257
<TOTAL-COSTS> 193,257
<OTHER-EXPENSES> 103,954
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 5,466
<INCOME-PRETAX> (6,912)
<INCOME-TAX> 2,427
<INCOME-CONTINUING> (4,485)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,060)
<CHANGES> 0
<NET-INCOME> (5,545)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> (0.20)
<FN>
<F1>Property, plant and equipment is presented net of accumulated depreciation.
<F2>Provision for doubtful accounts is included in other costs and expenses.
</FN>
</TABLE>
