==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 7, 1995
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: 1-4715
The Warnaco Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 95-4032739
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
90 Park Avenue
New York, New York 10016
(Address of registrant's principal executive offices)
(212) 661-1300
(Registrant's telephone number, including area code)
Copies of all communications to:
The Warnaco Group, Inc.
90 Park Avenue
New York, New York 10016
Attention: Vice President and General Counsel
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the registrant's Class A Common Stock
as of November 15, 1995 is as follows: 51,777,312
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PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
THE WARNACO GROUP, INC.
Consolidated Condensed Balance Sheets
(in thousands)
(unaudited)
October 7, January 7,
1995 1995
-------- --------
ASSETS
Current assets:
Cash.............................................. $ 2,927 $ 3,791
Accounts receivable-net........................... 194,788 148,659
Inventories:
Finished goods................................. 217,416 131,450
Work in process................................ 70,156 60,513
Raw materials.................................. 65,346 60,220
-------- --------
Total inventories............................ 352,918 252,183
Other current assets.............................. 27,697 15,892
-------- --------
Total current assets......................... 578,330 420,525
Property, plant and equipment net of accumulated
depreciation of $76,087 and $68,203............... 86,374 80,932
Intangible and other assets-net..................... 277,120 279,096
-------- --------
$941,824 $780,553
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowing under revolving credit facility......... $52,073 $115,679
Current portion of long-term debt................. 46,680 50,315
Borrowing under foreign credit facilities......... 285 9,822
Accounts payable and accrued liabilities.......... 124,706 137,624
Federal and other income taxes.................... 2,383 2,611
-------- --------
Total current liabilities.................... 226,127 316,051
Long-term debt...................................... 197,798 206,792
Other long-term liabilities......................... 12,032 17,238
Stockholders' equity:
Preferred stock; $.01 par value................... -- --
Class A common stock; $.01 par value.............. 521 421
Capital in excess of par value.................... 568,157 337,872
Cumulative translation adjustment................. (2,540) (1,732)
Accumulated deficit............................... (48,844) (83,897)
Treasury stock, at cost........................... (5,000) (5,000)
Notes receivable for common stock issued.......... (6,427) (7,192)
-------- --------
505,867 240,472
-------- --------
Total stockholders' equity................... $941,824 $780,553
======== ========
This statement should be read in conjunction with the accompanying
Notes to Consolidated Condensed Financial Statements.
THE WARNACO GROUP, INC.
Consolidated Condensed Statements of Operations
(in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Third Quarter Ended Nine Months Ended
------------------------ -------------------------
October 7, October 8, October 7, October 8,
1995 1994 1995 1994
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net revenues................................... $239,569 $217,872 $645,120 $555,905
Cost of goods sold............................. 154,941 147,976 425,449 378,643
-------- -------- -------- --------
Gross profit................................... 84,628 69,896 219,671 177,262
Selling, administrative and general expenses... 45,432 39,812 130,567 108,918
-------- -------- -------- --------
Income before loss on California earthquake,
interest and income taxes.................... 39,196 30,084 89,104 68,344
Loss on California earthquake.................. -- -- -- 3,000
-------- -------- -------- --------
Income before interest and income taxes........ 39,196 30,084 89,104 65,344
Interest expense............................... 10,017 7,873 27,852 23,586
-------- -------- -------- --------
Income before income taxes..................... 29,179 22,211 61,252 41,758
Provision for income taxes..................... 11,088 500 23,276 2,000
-------- -------- -------- --------
Net income..................................... $ 18,091 $ 21,711(1) $ 37,976 $ 39,758(1)
======== ======== ======== ========
Net income per share $ 0.41 $ 0.52(1) $ 0.89 $ 0.96(1)
======== ======== ======== ========
Weighted average number of common shares
outstanding.................................. 44,529 41,803 42,642 41,209
======== ======== ======== ========
<FN>
- --------
(1) Net income and net income per share before the loss on the California
earthquake and after a normalized provision for income taxes at an
effective income tax rate of 38% was $13,771 or $0.33 per share for
the third quarter of fiscal 1994 and $27,750 or $0.67 per share for
the nine months ended October 8, 1994.
</TABLE>
This statement should be read in conjunction with the accompanying
Notes to Consolidated Condensed Financial Statements.
THE WARNACO GROUP, INC.
Consolidated Condensed Statements of Cash Flow
(in thousands)
(unaudited)
Nine Months Ended
-----------------------
October 7, October 8,
1995 1994
----------- ---------
Cash flow from operations:
Net income $ 37,976 $ 39,758
Non-cash items included in net income:
Depreciation and amortization 14,412 14,644
Interest 1,236 832
Income taxes paid (2,584) (3,272)
Net change in other operating accounts (169,231) (65,570)
Other 5,184 (6,807)
-------- --------
Cash used in operations (113,007) (20,415)
Cash flow from investing activities:
Proceeds from the sale of fixed and other assets 5,932 1,375
Purchase of property, plant and equipment (18,142) (19,407)
Payment for purchase of Calvin Klein
underwear businesses and trademarks (5,000) (33,103)
Repurchase of Calvin Klein license-Canada (6,200) --
-------- --------
Cash used in investing activities (23,410) (51,135)
Cash flow from financing activities:
Borrowings (Repayments) under revolving credit
facilities (70,980) 76,909
Net proceeds from sale of common stock and
repayment of notes receivable from stockholders 224,339 1,672
Proceeds from other financing -- 8,626
Cash dividends paid (2,922) --
Increase in deferred financing costs (92) (415)
Purchase of treasury stock -- (5,000)
Repayments of debt (14,792) (9,437)
Cash provided from financing activities 135,553 72,355
-------- --------
Increase (decrease) in cash (864) 805
Cash at beginning of period 3,791 4,651
--------- ---------
Cash at end of period $ 2,927 $ 5,456
========= =========
This statement should be read in conjunction with the accompanying Notes
to Consolidated Condensed Financial Statements.
THE WARNACO GROUP, INC.
Consolidated Condensed Statements of Cash Flow
(in thousands)
(unaudited)
Third Quarter Ended
-----------------------
October 7, October 8,
1995 1994
---------- ---------
Net change in other operating accounts:
Accounts receivable $ (46,129) $ (41,715)
Inventories (100,735) (1,071)
Other current assets (11,805) (3,345)
Accounts payable and accrued liabilities (12,918) (21,439)
Income taxes payable 2,356 2,000
---------- ---------
$(169,231) $(65,570)
========== =========
This statement should be read in conjunction with the accompanying Notes
to Consolidated Condensed Financial Statements.
THE WARNACO GROUP, INC.
Notes to Consolidated Condensed Financial Statements
1. In the opinion of the Company, the accompanying consolidated condensed
financial statements contain all the adjustments (all of which were of a
normal recurring nature) necessary to present fairly the financial
position of the Company as of October 7, 1995 as well as its results of
operations and cash flows for the periods ended October 7, 1995 and
October 8, 1994. Operating results for interim periods may not be
indicative of results for the full fiscal year.
2. Certain amounts for prior periods have been reclassified to be comparable
with the current period presentation.
3. In February 1995, the Company terminated a license agreement for the
production of men's underwear and women's intimate apparel bearing the
Calvin Klein name in Canada. The Company now directly designs,
produces and markets Calvin Klein men's underwear and women's intimate
apparel in Canada. The cost of terminating the license agreement before
its expiration in the year 2000 was $6.2 million.
4. In September and October 1995 the Company sold 9,717,000 shares of its
Class A Common Stock in a public offering (the "Offering"). Net proceeds
from the Offering were approximately $224 million and were utilized to
repay amounts outstanding under the Company's Bank Credit Agreement.
5. On October 12, 1995, the Company entered into (i) a $450 million Bank
Credit Agreement (the "$450 Million Credit Agreement") with The Bank of
Nova Scotia and Citibank, N.A. as managing agents, Citibank, N.A. as
documentation agent, The Bank of Nova Scotia as paying agent, competitive
bid agent, swingline bank and issuing bank (the "Paying Agent"), and
certain banks party thereto and (ii) a $100 million Bank Credit Agreement
(the "364-Day Revolver" and, collectively with the $450 Million Credit
Agreement, the "Bank Credit Agreements") with The Bank of Nova Scotia and
Citibank, N.A. as managing agents, The Bank of Nova Scotia as paying
agent, Citibank, N.A. as documentation agent and certain banks party
thereto. The Bank Credit Agreements replaced the Company's previous $500
million credit agreement (the "1993 Financing"). The $450 Million Credit
Agreement provides for a term loan of $200 million and a five-year
revolving loan of $250 million. The 364-Day Revolver provides for a
364-day revolving loan of $100 million which is renewable upon the
satisfaction of certain conditions. Amounts outstanding under the Bank
Credit Agreements currently bear interest at the Paying Agent's base rate,
or at LIBOR plus 0.4250%. In addition, the Company has the option of
placing a portion of amounts outstanding under the revolving loan under
the $450 Million Credit Agreement for competitive bids. The rate of
interest payable on amounts outstanding under the Bank Credit Agreements
decrease as the Company's implied senior debt rating, as determined by
certain credit rating agencies, improves. Amounts outstanding under the
Bank Credit Agreements are not limited by any borrowing base and are
unsecured. The Company is required to pay a commitment fee on unused
portions of the revolving commitments under the Bank Credit Agreements,
currently equal to 0.1750% per annum. The commitment fee decreases as the
Company's implied senior debt rating, as determined by certain credit
rating agencies, improves.
The Bank Credit Agreements contain various covenants requiring the
Company to maintain certain financial tests which as of fiscal 1995 year end
will be as follows: (1) minimum net worth of $225 million, (2) leverage ratio
of 0.550 to 1 and, (3) fixed charge coverage ratio of 1.20 to 1.0.
Item 2.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations.
STATEMENT OF OPERATIONS (selected data)
(amounts in millions of dollars)
Quarter ended Nine months ended
-------------------- --------------------
October 7,October 8, October 7,October 8,
1995 1994 1995 1994
-------------------- --------------------
Net revenues $239.6 $217.9 $645.1 $555.9
Cost of goods sold 155.0 148.0 425.4 378.6
------- ------- ------- -------
Gross profit 84.6 69.9 219.7 177.3
% to net revenues 35.3% 32.1% 34.1% 31.9%
Selling, administrative and general
expenses 45.4 39.8 130.6 108.9
Loss on California earthquake -- -- -- 3.0
------- ------- ------- -------
Income before interest and income
taxes 39.2 30.1 89.1 65.4
% to net revenues 16.4% 13.8% 13.8% 11.8%
Interest expense 10.0 7.9 27.8 23.6
Provision for income taxes 11.1 0.5 23.3 2.0
------- ------- ------- -------
Net income $ 18.1 $ 21.7 $ 38.0 $ 39.8
======= ======= ======= =======
Income before loss on California
earthquake and after giving effect
to a normalized tax provision $ 18.1 $ 13.8 $ 38.0 $ 27.7
======= ======= ======= =======
Net revenues in the third quarter of fiscal 1995 were $239.6 million,
10.0% higher than the $217.9 million recorded in the third quarter of fiscal
1994. Net revenues for the first nine months of fiscal 1995 were $645.1
million, 16.0% higher than the $555.9 million recorded in the first nine
months of fiscal 1994.
Intimate apparel division net revenues increased 15.8% in the third
quarter of fiscal 1995 to $177.1 million from $152.9 million in the third
quarter of fiscal 1994. The increase was achieved despite the $21.3 million
of net revenues generated by the Miracle-Bra and Avon launch revenues in the
third quarter of fiscal of 1994. Excluding these revenues, intimate apparel
division net revenues increased 39.8% in the third quarter of fiscal 1995
compared to fiscal 1994. Domestic Warner's and Olga revenues in department
stores increased 11.6%, Fruit of the Loom net revenues in the mass merchandise
market increased 34.0%. Calvin Klein net revenues increased 150% due to the
successful launch of the women's intimate apparel business on January 1, 1995
and improved market penetration in the men's underwear business. The
Company's international divisions achieved a 34.2% increase in net revenues.
Intimate apparel division net revenues in the first nine months of fiscal
1995 increased 22.6% to $482.5 million from $393.4 million recorded in the
first nine months of fiscal 1994. The higher net revenues primarily reflect
increases of 16% in domestic Warner's and Olga in department and specialty
stores, 48.2% increase in Fruit of the Loom net revenues in the mass
merchandise market and 186% in Calvin Klein net revenues, which compares a
full nine months in fiscal 1995 to 6 1/2 months in fiscal 1994. In addition,
the international division's net revenues increased 19.5%.
Menswear division net revenues of $49.7 million decreased 7.8% from $53.9
million in the third quarter of fiscal 1994. Excluding the discontinued
brands of Dior Accessories and Puritan for fiscal 1994, menswear division net
revenues are essentially flat to last year for the third quarter and for the
first nine months of fiscal 1995. Excluding the discontinued brands, menswear
division net revenues increased 9.5% in the first nine months of fiscal 1995
compared to the first nine months of fiscal 1994. The increase primarily
reflects an increase of 11.0% in Chaps net revenues compared to the first nine
months of fiscal 1994.
Gross profit in the third quarter of fiscal 1995 increased 21.1% to $84.6
million from the $69.9 million recorded in the third quarter of fiscal 1994.
Gross profit as a percentage of net revenues improved 320 basis points to
35.3% in the third quarter of fiscal 1995 from 32.1% in the comparable fiscal
1994 period. The increase in gross profit as a percentage of net revenues
reflects increased manufacturing efficiencies in the Company's intimate
apparel plants and a more favorable mix of regular price sales driven by
Calvin Klein, Warner's and Olga. Gross profit for the first nine months of
fiscal 1995 increased 23.9% to $219.7 million compared to $177.3 million in
the first nine months of fiscal 1994. Gross profit as a percentage of net
revenues increased to 34.1% in the first nine months of fiscal 1995 compared
to 31.9% in the first nine months of last year. The increase in gross profit
reflects manufacturing efficiencies and the more favorable mix, as noted
above.
Selling, administrative and general expenses increased to $45.4 million
(19.0% of net revenues) from the $39.8 million (18.3% of net revenues)
recorded in the third quarter of fiscal 1994. The increase in selling,
administrative and general expense reflects the increased sales volume noted
above and an increase in marketing and advertising expenses primarily related
to Calvin Klein. Selling, administrative and general expenses for the first
nine months of fiscal 1995 increased to $130.6 million (20.2% of net
revenues) from the $108.9 million (19.6% of net revenues) recorded in the
first nine months of fiscal 1994. The increase in selling, administrative and
general expenses in the first nine months of fiscal 1995 compared to fiscal
1994 reflects higher sales volume and the increase in marketing expenses noted
above.
Interest expense increased to $10.0 million in the third quarter of
fiscal 1995 from $7.9 million recorded in the third quarter of fiscal 1994.
Interest expense increased to $27.8 million in the first nine months of fiscal
1995 from $23.6 million recorded in the first nine months of fiscal 1994. The
increase in interest expense is due primarily to an increase in interest rates
of nearly 150 basis points since last year. Interest expense in future
periods will be reduced by approximately 40% on currently outstanding debt
due to the recently completed equity offering which reduced outstanding debt
by approximately $224 million. The Company has entered into interest rate swap
agreements which effectively fix the interest rate on $150 million of the
Company's debt at a LIBOR interest rate of 5.99% for three years to October
1998, which limits the impact of future increases in interest rates.
The provision for income taxes for the third quarter of fiscal 1995 was
$11.1 million compared to $0.5 million in the third quarter of fiscal 1994.
The Company's effective tax rate for the first nine months of fiscal 1995 was
38% compared to 4.8% for the first nine months of fiscal 1994. The increase
in effective tax rate in 1995 compared to 1994 reflects the utilization of the
Company's net operating loss carryforwards in the first nine months of fiscal
1994, which offset the Company's 1994 federal income tax provision, leaving
only a 4.8% state tax provision.
The first quarter of fiscal 1994 included a non-recurring loss of $3.0
million, related to the deductible portion of the Company's insurance policy
on the January 1994 California earthquake which temporarily shut down the Olga
Division's distribution center.
Net income for the third quarter of fiscal 1995 was $18.1 million. Income
for the third quarter of fiscal 1994 adjusted to reflect a normalized tax
provision of 38% was $13.8 million, therefore, on a comparable basis, net
income for the third quarter of fiscal 1995 of $18.1 million is 31.4% higher
than the fully taxed income of $13.8 million recorded in the third quarter of
fiscal 1994. As reported net income for the third quarter of fiscal 1994 was
$21.7 million. Net income on a comparable basis for the first nine months of
fiscal 1995 of $38.0 million was 36.9% higher than the fully taxed income of
$27.7 million, before the loss on the California earthquake recorded in the
first nine months of fiscal 1994. As reported net income for the nine months
of fiscal 1994 was $39.8 million.
Capital Resources and Liquidity.
In September and October 1995 the Company sold 9,717,000 shares of its
Class A Common Stock for $24 per share in a public offering (the "Offering").
Net proceeds from the Offering were approximately $224 million and were used
to reduce the bank debt outstanding under the Company's 1993 Financing. On
October 12, 1995, the Company entered into the Bank Credit Agreements with
substantially all of its existing banks for a total of $550 million. The Bank
Credit Agreements provide the Company with a term loan in the amount of $200
million, a 364 day revolving loan in the amount of $100 million and a five
year revolving loan in the amount of $250 million. The Bank Credit Agreements
reduced the Company's effective borrowing rate from LIBOR plus 50 basis points
to LIBOR plus 42.5 basis points and released all collateral from the banks
providing the Company with increased financial flexibility.
Consistent with the Company's goal of providing increased shareholder
value, on November 7, 1995 the Company declared its third quarterly cash
dividend of $0.07 per share. The dividend payment of approximately $3.7
million will be paid on January 8, 1996 to shareholders of record as of
December 1, 1995.
The Company's liquidity requirements arise primarily from its debt
service requirements and the funding of the Company's working capital needs,
primarily inventory and accounts receivable. The Company's borrowing
requirements are seasonal, with peak working capital needs generally arising
at the end of the second quarter and during the third quarter of the fiscal
year. The Company typically generates nearly all of its operating cash flow
in the fourth quarter of the fiscal year reflecting third and fourth quarter
shipments and the sale of inventory built during the first half of the fiscal
year.
Cash used by operations in the first nine months of fiscal 1995 was
$113.0 million compared to a use of $20.4 million in the comparable 1994
period. The use of cash in the first nine months of the Company's fiscal year
is a result of seasonal increases in working capital, primarily inventory and
accounts receivable. The increase in cash used in operations in the first
nine months of fiscal 1995 compared to the first nine months of fiscal 1994
reflects higher investment in working capital, primarily inventory and
accounts receivable to support the increased sales volume in the fourth
quarter of fiscal 1995, as well as the strong growth of the Calvin Klein
business. The increase in inventory is concentrated in intimate apparel and in
inventory in transit (on the water from our overseas contractors) to support
future sales growth. The increase in accounts receivable reflects the sales
growth noted above, days sales outstanding were equal to last year at 48 days.
On November 8, 1995 the Company had over $280 million of additional
credit available under its various credit agreements. The Company believes
that the funds available under its existing credit agreements together with
cash flow to be generated from future operations will be sufficient to meet
the working capital and capital expenditure needs of the Company, including
dividend, interest and principal payments on outstanding debt obligations, for
the next twelve months and for the foreseeable future.
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Credit Agreement dated October 12, 1995 among Warnaco Inc.,
The Warnaco Group, Inc. and the various banks and lending
institutions named therein.
10.2 Credit Agreement dated October 12, 1995 among Warnaco Inc.,
The Warnaco Group, Inc. and the various banks and lending
institutions named therein.
11.1 Earnings per share.
(b) Reports on Form 8-K.
None.
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.
THE WARNACO GROUP, INC.
Date: November 14, 1995
By: /s/ WILLIAM S. FINKELSTEIN
----------------------------------
William S. Finkelstein
Director, Senior Vice President
and Chief Financial Officer
Principal Financial and Accounting
Officer
Date: November 14, 1995
By: /s/ WALLIS H. BROOKS
----------------------------------
Wallis H. Brooks
Vice President and Corporate
Controller
EXECUTION COPY
U.S. $100,000,000
364 DAY CREDIT AGREEMENT
Dated as of October 12, 1995
Among
WARNACO INC.
as Borrower
and
THE WARNACO GROUP, INC.
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
THE BANK OF NOVA SCOTIA and CITIBANK, N.A.
as Managing Agents
and
CITIBANK, N.A.
as Documentation Agent
and
THE BANK OF NOVA SCOTIA
as Paying Agent
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.................................. 1
SECTION 1.02. Computation of Time Periods............................ 22
SECTION 1.03. Accounting Terms....................................... 23
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances............................................ 23
SECTION 2.02. Making the Advances..................................... 23
SECTION 2.04. Termination, Reduction or Extension of the Commitments.. 25
SECTION 2.05. Prepayments............................................. 26
SECTION 2.06. Interest................................................ 26
SECTION 2.07. Fees.................................................... 27
SECTION 2.08. Conversion of Advances.................................. 27
SECTION 2.09. Increased Costs, Etc.................................... 28
SECTION 2.10. Illegality.............................................. 30
SECTION 2.11. Payments and Computations............................... 30
SECTION 2.12. Taxes................................................... 31
SECTION 2.13. Sharing of Payments, Etc................................ 34
SECTION 2.14. Use of Proceeds......................................... 34
SECTION 2.15. Defaulting Lenders...................................... 34
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01.. 37
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance..... 40
SECTION 3.03. Determinations Under Section 3.01....................... 41
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.......... 41
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants................................... 46
SECTION 5.02. Negative Covenants...................................... 51
SECTION 5.03. Financial Covenants..................................... 56
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default....................................... 58
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action................................ 61
SECTION 7.02. Agents' Reliance, Etc................................... 61
SECTION 7.03. Scotiabank, Citibank and Affiliates..................... 62
SECTION 7.04. Lender Credit Decision.................................. 62
SECTION 7.05. Indemnification......................................... 63
SECTION 7.06. Successor Agents........................................ 63
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc......................................... 64
SECTION 8.02. Notices, Etc............................................ 64
SECTION 8.03. No Waiver; Remedies..................................... 65
SECTION 8.04. Costs and Expenses...................................... 65
SECTION 8.05. Right of Set-off........................................ 66
SECTION 8.06. Binding Effect.......................................... 67
SECTION 8.07. Assignments, Designations and Participations............ 67
SECTION 8.08. Confidentiality......................................... 70
SECTION 8.09. Execution in Counterparts............................... 70
SECTION 8.10. Governing Law........................................... 71
SECTION 8.11. Jurisdiction, Etc....................................... 71
SECTION 8.13. Waiver of Jury Trial.................................... 71
Schedules
Schedule I - List of Applicable Lending Offices
Schedule 4.01(b)- Subsidiaries
Schedule 4.01(q)- Environmental Disclosure
Schedule 4.01(r)- CERCLA Sites
Schedule 4.01(s)- Hazardous Materials
Schedule 5.02(c)- Existing Debt of Foreign Subsidiaries
Schedule 5.02(d)- Assets Held For Sale
Schedule 5.02(f)- Investments
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Notice of Extension of Termination Date
Exhibit E - Form of Opinion of Counsel for the Loan Parties
Exhibit F - Form of Group Guaranty
Exhibit G - Form of Subsidiary Guaranty
CREDIT AGREEMENT
Dated as of October 12, 1995
WARNACO INC., a Delaware corporation (together with any
successors-in-interest permitted hereunder, the "Borrower"), THE WARNACO
GROUP, INC., a Delaware corporation (together with any successors-in-interest
permitted hereunder, "Group"), the banks, financial institutions and other
institutional lenders (the "Initial Lenders") listed on the signature pages
hereof, and THE BANK OF NOVA SCOTIA ("Scotiabank") and CITIBANK, N.A.
("Citibank") as managing agents (the "Managing Agents") for the Lenders (as
hereinafter defined), Citibank as documentation agent (the "Documentation
Agent") for the Lenders, and Scotiabank as paying agent (the "Paying Agent")
for the Lenders, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Advance" has the meaning specified in Section 2.01.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agents" means each of the Managing Agents, the Documentation
Agent and, the Paying Agent together, in each case, with any successor
or successors of any thereof appointed pursuant to Article VII hereof.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance
and such Lender's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Implied Senior Rating in effect on such
date as set forth below:
Applicable Margin Applicable Margin for
Implied Senior for Eurodollar Rate
Rating Base Rate Advances Advances
-------------- ------------------ ---------------------
BB+ or below 0.250% 0.875%
BBB- 0.000% 0.500%
BBB 0.000% 0.425%
BBB+ 0.000% 0.375%
A- or above 0.000% 0.300%
The Applicable Margin for each Advance shall be determined by
reference to the Implied Senior Rating in effect from time to time;
provided, however, that no change in the Applicable Margin shall be
effective until three Business Days after the date on which the
Managing Agents receive evidence reasonably satisfactory to them that
a new Implied Senior Rating is in effect; provided further that in
the event that at any time no Implied Senior Rating shall be in
effect, the Applicable Margin shall be 0.250% for each Base Rate
Advance and 0.875% for each Eurodollar Rate Advance. Notwithstanding
the foregoing, until the six-month anniversary of the Effective Date,
the Applicable Margin shall be 0.000% for Base Rate Advances and
0.425% for Eurodollar Rate Advances.
"Applicable Percentage" means, as of any date, a percentage per
annum determined by reference to the Implied Senior Rating in effect on
such date as set forth below:
Applicable
Implied Senior Rating Percentage
--------------------- ----------
BB+ or below 0.375%
BBB- 0.175%
BBB 0.125%
BBB+ 0.095%
A- or above 0.070%
The Applicable Percentage shall be determined by reference to the
Implied Senior Rating in effect from time to time; provided, however,
that no change in the Applicable Percentage shall be effective until
three Business Days after the date on which the Managing Agents receive
evidence reasonably satisfactory to them that a new Implied Senior
Rating is in effect; provided further that in the event that at any time
no Implied Senior Rating shall be in effect, the Applicable Percentage
shall be 0.375%. Notwithstanding the foregoing, until the six-month
anniversary of the Effective Date, the Applicable Percentage shall be
0.125%.
"Approved Accounting Firm" means Arthur Andersen LLP, Coopers &
Lybrand L.L.P., Deloitte & Touche LLP, Ernst & Young LLP, Price
Waterhouse LLP or KPMG Peat Marwick LLP, or any successor thereof.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Documentation Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the higher of:
(a) the rate of interest established by the Paying Agent,
from time to time, at its Domestic Lending Office as its base rate
for loans in United States dollars; and
(b) 1/2 of one percent per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained
by the Borrower with Citibank at its office at 399 Park Avenue, New
York, New York 10043, Account No. 3846-9269.
"Borrowing" means a borrowing consisting of simultaneous Advances
of the same Type made by the Lenders pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person, any expenditures or
costs made by such Person for the acquisition, maintenance or repair of
fixed or capital assets (which are required to be capitalized on the
balance sheet of such Person in accordance with GAAP), including,
without limitation, the incurrence or assumption of any Debt (other than
Capitalized Lease Obligations) in respect of such fixed or capital
asset, and, without double counting, any payment made in respect of such
incurrence or assumption.
"Capital Stock Issuance" means the sale or issuance by any Loan
Party or any of its Subsidiaries of any capital stock, any securities
convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock of Group or any of its
Subsidiaries other than any such sale or issuance by a wholly owned
Subsidiary of the Borrower to the Borrower or to another wholly owned
Subsidiary of the Borrower and other than the issuance or sale of common
stock (or options to purchase common stock) by Group pursuant to
customary management, employee or director stock option and stock
purchase programs or other stock option or stock purchase programs with
respect to common stock of Group approved by the Board of Directors of
Group.
"Capitalized Lease Obligations" of any Person shall at any time
mean all Obligations under Capitalized Leases of such Person, in each
case taken at the amount thereof accounted for as liabilities in
accordance with GAAP at such time.
"Capitalized Leases" has the meaning specified in clause (e) of
the definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned
by any Loan Party or any Subsidiary of a Loan Party free and clear of
all Liens (other than Liens permitted hereunder): (a) securities
issued, or that are directly and fully guaranteed or insured, by the
United States Government or any agency or instrumentality thereof having
maturities of not more than 12 months from the date of acquisition, (b)
time deposits and certificates of deposit having maturities of not more
than 12 months from the date of acquisition of (i) any Lender or (ii)
any other domestic commercial bank having capital and surplus in excess
of $500,000,000, the holding company of which has outstanding commercial
paper meeting the requirements specified in clause (d) below, (c)
repurchase agreements with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b)
above entered into with any Lender or any other bank meeting the
qualifications specified in clause (b) above or with securities dealers
of recognized national standing, provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Institutions Examination Council Supervisory Policy Repurchase
Agreements of Depositary Institutions With Securities Dealers and Others
as adopted by the Comptroller of the Currency on October 31, 1985
(the "Supervisory Policy"), and provided further that possession or
control of the underlying securities is established as provided in
the Supervisory Policy, and (d) commercial paper rated (as of the
date of acquisition thereof) at least A-1 or the equivalent thereof
by S&P and at least P-1 or the equivalent thereof by Moody's and
maturing within six months after the date of its acquisition.
"Cash Interest Expense" means, for any period, interest expense
net of interest income on all Debt of Group and its Subsidiaries, in
each case determined for such period on a Consolidated basis for Group
and its Subsidiaries in accordance with GAAP and including, without
limitation, to the extent not otherwise included in accordance with
GAAP, (a) interest expense in respect of Debt resulting from Advances,
(b) the interest component of obligations as lessee under Capitalized
Leases, (c) commissions, discounts and other fees and charges payable in
connection with letters of credit, (d) the net payment, if any, payable
in connection with interest rate hedge agreements and other interest
rate protection contracts and (e) fees paid pursuant to Section 2.07(a),
but excluding, in each case, (x) amortization of original issue
discount, (y) the interest portion of any deferred payment obligation
and (z) other interest not payable in cash.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Citibank" has the meaning specified in the recital of parties to
this Agreement.
"Commitment" means, with respect to any Lender at any time, the
amount set forth opposite such Lender's name on Schedule I hereto under
the caption "Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, the amount set forth for such Lender in the
Register maintained by the Documentation Agent pursuant to Section
8.07(d) as such Lender's "Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.04(a).
"Confidential Information" means information that the Borrower or
Group furnishes to any Agent or Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to such Agent or Lender from a source other than the Borrower
or Group.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"Current Liabilities" of any Person means (a) all Debt of such
Person except Funded Debt, Debt in respect of the Five Year Credit
Facility and Debt in respect of Advances, (b) all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination and (c) all other items (including taxes accrued
as estimated) that in accordance with GAAP would be classified as
current liabilities of such Person.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables
not overdue by more than 90 days incurred in the ordinary course
of such Person's business), including, without limitation, the
Trade Credit Facility,
(c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments,
(d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property
acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as
capital leases ("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any
capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to
acquire such capital stock, valued, in the case of Redeemable
preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends,
(h) all Obligations of such Person in respect of Hedge
Agreements,
(i) all Debt of others of the kinds referred to in clauses
(a) through (h) above guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (A) to pay or
purchase such Debt or to advance or supply funds for the payment
or purchase of such Debt, (B) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss,
(C) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services
irrespective of whether such property is received or such services
are rendered) or (D) otherwise to assure a creditor against loss,
and
(j) all Debt referred to in clauses (a) through (h) above
secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt.
"Declining Lender" has the meaning specified in Section 2.04(b).
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any time,
the amount of any Advance required to be made by such Lender to the
Borrower pursuant to Section 2.01 at or prior to such time which has not
been so made as of such time; provided, however, any Advance made by the
Paying Agent for the account of such Lender pursuant to Section 2.02(d)
shall not be considered a Defaulted Advance even if, at such time, such
Lender shall not have reimbursed the Paying Agent therefor as provided
in Section 2.02(d). In the event that a portion of a Defaulted Advance
shall be deemed made pursuant to Section 2.15(a), the remaining portion
of such Defaulted Advance shall be considered a Defaulted Advance
originally required to be made pursuant to Section 2.01 on the same date
as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at any time,
any amount required to be paid by such Lender to any Agent or any other
Lender hereunder or under any other Loan Document at or prior to such
time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender to (a) the
Paying Agent pursuant to Section 2.02(d) to reimburse the Paying Agent
for the amount of any Advance made by the Paying Agent for the account
of such Lender, (b) any other Lender pursuant to Section 2.13 to purchase
any participation in Advances owing to such other Lender and (c) any
Agent pursuant to Section 7.05 to reimburse such Agent for such Lender's
ratable share of any amount required to be paid by the Lenders to such
Agent as provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.15(b), the remaining
portion of such Defaulted Amount shall be considered a Defaulted Amount
originally required to be made hereunder or under any other Loan
Document on the same date as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take or be the subject of any action or proceeding of a type described
in Section 6.01(e).
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Paying Agent.
"Domestic Subsidiary" means any Subsidiary of Group that is not a
Foreign Subsidiary.
"EBITDA" means, for any period, net income (or net loss) from
operations (determined without giving effect to extraordinary or
non-recurring gains or losses) plus, to the extent deducted in
calculating such net income (loss), the sum of (a) Interest Expense, (b)
income tax expense, (c) depreciation expense and (d) amortization
expense, in each case determined in accordance with GAAP.
"Effective Date" means the first date on which the conditions
specified in Sections 3.01 and 3.02 have been satisfied.
"Eligible Assignee" means (i) a wholly owned Subsidiary of a
Lender or of any Person that directly or indirectly controls a Lender;
and (ii) any other Person approved by the Managing Agents and the
Borrower, such approval not to be unreasonably withheld; provided,
however, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating
in any way to any Environmental Law, Environmental Permit or Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment or
decree relating to the environment, health, safety or Hazardous
Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan pursuant to Section 4041(a)(2)
of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations
at a facility of the Borrower or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
by the Borrower or any of its ERISA Affiliates from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the failure by the Borrower
or any of its ERISA Affiliates to make a payment to a Plan if the
conditions for the imposition of a lien under Section 302(f)(1) of ERISA
are satisfied; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Borrower and
the Paying Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum at which deposits in U.S. dollars are offered by
the principal office of the Paying Agent in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to the Paying Agent's Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing means
the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Person" means (i) Linda J. Wachner or (ii) any trust of
which Linda J. Wachner is the sole trustee (or, in case of her death or
disability, another trustee of comparable experience and ability
selected by the Borrower within 180 days thereafter after consultation
with the Managing Agents).
"Excluded Taxes" means, in the case of each Lender, franchise
taxes and taxes upon or determined by reference to such Lender's net
income (including, without limitation, branch profit taxes), in each
case imposed by the United States or any political subdivision or taxing
authority thereof or therein or by any jurisdiction in which such Lender
has its Applicable Lending Office, is resident or in which such Lender
is organized or has its principal or registered office and, in the case
of each Agent, franchise taxes and net income taxes upon or determined
by reference to such Agent's net income (including, without limitation,
branch profits taxes) imposed by the United States or by the state or
foreign jurisdiction under the laws of which such Agent is organized (or
by any political subdivision of such state or foreign jurisdiction), is
resident or has its principal or registered office.
"Existing Credit Agreement means the Credit Agreement, dated as of
October 14, 1993, as amended, among the Borrower, Group, the financial
institutions named therein, Scotiabank and Citicorp, as Managing Agents,
Citicorp, as Documentation Agent and Collateral Agent, and Scotiabank,
as Paying Agent thereunder.
"Extending Lender" has the meaning specified in Section 2.04(b).
"Facility" means, at any time, the aggregate amount of the
Lenders' Commitments at such time.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Paying Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of Group and its
Consolidated Subsidiaries ending on or about March 31, June 30,
September 30 or December 31 of each year.
"Fiscal Year" means a fiscal year of Group and its Consolidated
Subsidiaries ending on or about December 31 of each year.
"Five Year Credit Facility" means the $450,000,000 senior term
loan and revolving credit facility under a credit agreement dated as of
the date hereof among the Borrower, Group, certain lenders party thereto
and Scotiabank and Citibank as agents for said lenders, as the same may
be amended, extended or otherwise modified or refinanced or otherwise
replaced from time to time.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated
EBITDA of Group and its Subsidiaries for any four consecutive Fiscal
Quarter period plus cash lease expense of Group and its Subsidiaries
during such period to the sum of (i) Cash Interest Expense for such
period plus (ii) income taxes paid in cash by Group and its Subsidiaries
during such period plus (iii) the aggregate amount of Capital
Expenditures made by Group and its Subsidiaries during such period in
cash plus (iv) the aggregate amount of all regularly scheduled payments
of principal on all Funded Debt payable during such period by Group and
its Subsidiaries (other than the payment of principal scheduled to be
paid upon the expiration of a revolving credit or similar facility or
receivables facility, if such facility has been refinanced or replaced
(except to the extent a principal payment was made to permanently reduce
such facility in connection with such refinancing or replacement)) plus
(v) the aggregate of all cash amounts paid by Group or any of its
Subsidiaries to any Person other than the Borrower or a wholly owned
Subsidiary of the Borrower during such period pursuant to Section
5.02(e)(iii) plus (vi) without duplication, cash lease expense of Group
and its Subsidiaries during such period.
"Foreign Subsidiary" means a Subsidiary of Group organized under
the laws of a country other than the United States or any state thereof.
"Funded Debt" of any Person means Debt (other than Debt incurred
pursuant to Section 5.02(c)(iii) hereof) of such Person that by its
terms matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year after such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more
than one year after such date, including, without limitation, all
amounts of Funded Debt of such Person required to be paid or prepaid
within one year after the date of its creation.
"GAAP" has the meaning specified in Section 1.03.
"Group" has the meaning specified in the recital of parties to
this Agreement.
"Group Guaranty" has the meaning specified in Section 3.01(h)(ii).
"Guaranties" means the Group Guaranty and the Subsidiary Guaranty.
"Guarantors" means Group and each of its Domestic Subsidiaries
(other than the Borrower) which is required to guarantee the Borrower's
Obligations under the Loan Documents pursuant to Section 5.01(k).
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic", or words of similar import, under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Implied Senior Rating" means the rating assigned by S&P to
Group's unsecured "implied senior debt" from time to time, as notified
to Group by S&P in its letter dated May 24, 1994 or any subsequent
letter issued by S&P (which rating on the date hereof is BBB-), or, if
such rating is unavailable, the equivalent rating assigned by Moody's to
Group's unsecured "implied senior debt", as notified in writing to Group
by Moody's. For purposes of this Agreement, the following is the
equivalent rating by Moody's for each rating by S&P:
S&P Moody's
--- -------
BB+ Ba1
BBB- Baa3
BBB Baa2
BBB+ Baa1
A- A3
"Indebtedness for Borrowed Money" of any Person means all Debt of
such Person for borrowed money or evidenced by notes, bonds, debentures
or other similar instruments, all Obligations of such Person for the
deferred purchase price of any property, service or business (other than
trade accounts payable (including the Trade Credit Facility) incurred in
the ordinary course of business and constituting Current Liabilities),
and all Obligations of such Person under Capitalized Leases and finance
leases.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Information Memorandum" means the information memorandum dated
September 1995 used by the Managing Agents in connection with the
syndication of the Commitments
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Expense" means, with respect to any Person for any
period, the excess, if any, of (i) interest expense (whether cash or
accretion) of such Person during such period determined in accordance
with GAAP, and shall include in any event, without limitation, interest
expense with respect to Indebtedness for Borrowed Money, the Trade
Credit Facility and payments under Hedge Agreements over (ii) interest
income of such Person for such period, including payments received under
Hedge Agreements.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date
of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, with respect to Eurodollar Rate
Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, or, if available to all Lenders, nine months, as the Borrower
may, upon notice received by the Paying Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the first day of
such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period that
ends after any principal repayment installment date unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment
installment date shall be at least equal to the aggregate
principal amount of Advances due and payable on or prior to such
date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day,
unless the Borrower and the Paying Agent otherwise agree; and
(d) whenever the first day of any Interest Period occurs
on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds
such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month unless the Borrower and the Paying Agent otherwise agree.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such Person
or any other investment in such Person, including, without limitation,
any arrangement pursuant to which the investor incurs Debt of the types
referred to in clauses (i) or (j) of the definition of "Debt" in respect
of such Person.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"Loan Documents" means (a) for purposes of this Agreement, the
Notes and any amendments or modifications hereof or thereof and for all
other purposes other than for purposes of the Guarantees (i) this
Agreement, (ii) the Notes and (iii) the Guarantees, and (b) for purposes
of the Guarantees, (i) this Agreement, (ii) the Notes, (iii) the
Guarantees and (iv) the interest rate Hedge Agreements entered into by
Group or the Borrower with Lender Parties, in the case of each of the
foregoing agreements referred to in clause (a) or (b), and any
amendments, supplements or modifications hereof or thereof.
"Loan Parties" means the Borrower and the Guarantors.
"Managing Agents" has the meaning specified in the recital of
parties to this Agreement.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or of Group and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Group and its
Subsidiaries taken as a whole, (b) the rights and remedies of any Agent
or Lender under any Loan Document or (c) the ability of any Loan Party
to perform its Obligations under any Loan Document to which it is or is
to be a party.
"Material Guarantor" means, at any time, a Guarantor having (i) at
least 10% of Consolidated total assets of Group and its Subsidiaries
(determined as of the last day of the most recent Fiscal Quarter) or
(ii) at least 10% of Consolidated EBITDA of Group and its Subsidiaries
for the 12-month period ending on the last day of the most recent Fiscal
Quarter.
"Material Subsidiary" of any Person means, at any time, a
Subsidiary of such Person having (i) at least $5,000,000 in total assets
(determined as of the last day
of the most recent fiscal quarter of such Person) or (ii) EBITDA of at
least $5,000,000 for the 12-month period ending on the last day of the
most recent fiscal quarter of such Person.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates and at least one Person
other than the Borrower and its ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Worth" at any time means total assets of Group and its
Subsidiaries at such time over total liabilities of Group and its
Subsidiaries at such time, in each case as determined on a Consolidated
basis in accordance with GAAP, without giving effect to charges
resulting from (i) the implementation of Statement of Position 93-7
during the 1995 Fiscal Year ended on or about January 7, 1996 with
respect to certain advertising and promotion costs in an aggregate
amount of approximately $4,000,000 and (ii) the prepayment of
indebtedness during the 1995 Fiscal Year ended on or about January 7,
1996 in an aggregate amount of approximately $5,000,000.
"Note" means a promissory Note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Obligation" means, with respect to any Person, any obligation of
such Person of any kind, including, without limitation, any liability of
such Person on any claim,
whether or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any proceeding referred to in Section 6.01(e).
Without limiting the generality of the foregoing, the Obligations of the
Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation to reimburse any amount
in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Paying Agent" has the meaning specified in the recital of parties
to this Agreement.
"Paying Agent's Account" means the account of the Paying Agent
maintained by the Paying Agent with Scotiabank at its office at One
Liberty Plaza, New York, New York 10006, for further credit to
Scotiabank Atlanta Agency, Special Management Account No. 0608335,
Reference: Warnaco.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means the following:
(a) Liens, other than in favor of the PBGC, arising out of
judgments or awards in respect of which Group or any of its
Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review and in respect of which it shall have
secured a subsisting stay of execution pending such appeal or
proceedings for review, provided it shall have set aside on its
books adequate reserves, in accordance with GAAP, with respect to
such judgment or award and provided further that the aggregate
amount secured by such Liens does not exceed $5,000,000 in any one
case or $10,000,000 in the aggregate;
(b) Liens for taxes, assessments or governmental charges
or levies, provided payment thereof shall not at the time be
required in accordance with the provisions of Section 5.01(b) and
such amount, when taken together with any amount payable under
Section 5.01(b) as to which any Lien has been attached as
described in the last phrase thereof, shall not exceed
$10,000,000;
(c) deposits, Liens or pledges to secure payments of
workmen's compensation and other payments, unemployment and other
insurance, old-age pensions or other social security obligations,
or the performance of bids, tenders, leases, contracts (other than
contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds, or
other similar obligations arising in the ordinary course of
business;
(d) mechanics', workmen's, repairmen's, warehousemen's,
vendors' or carriers' Liens or other similar Liens arising in the
ordinary course of business and securing sums which are not past
due, or deposits or pledges to obtain the release of any such
Liens;
(e) statutory landlord's Liens under leases to which Group
or any of its Subsidiaries is a party;
(f) any Lien constituting a renewal, extension or
replacement of a Lien constituting a Permitted Lien, but only if
at the time such Lien is granted and immediately after giving
effect thereto, no Default would exist;
(g) leases or subleases granted to other Persons not
materially interfering with the conduct of the business of Group
and its Subsidiaries, taken as a whole;
(h) zoning restrictions, easements, rights of way,
licenses and restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair
the use of such property in the normal operation of the business
of Group or any of its Subsidiaries or the value of such property
for the purpose of such business; and
(i) statutory or common law Liens (such as rights of
set-off) on deposit accounts of Group and its Subsidiaries and
other Liens under the "L/C Related Documents" (as such term is
defined in the Five Year Credit Agreement).
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pro Rata Share" of any amount means, with respect to any Lender
at any time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Commitment at such time and the
denominator of which is the Facility at such time.
"Prospectus" means the Prospectus of Group dated September 19,
1995.
"Redeemable" means, with respect to any capital stock, Debt or
other right or Obligation, any such right or Obligation that (a) the
issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or
(b) is redeemable at the option of the holder.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Lenders" means, at any time, Lenders owed or holding
more than 51% of the aggregate principal amount of the Advances
outstanding at such time; provided, however, if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of Required Lenders at such time (i) the aggregate
principal amount of the Advances owing to such Lender (in its capacity
as a Lender) and outstanding at such time and (ii) the Unused Commitment
of such Lender at such time.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Scotiabank" has the meaning specified in the recital of parties
to this Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates and no Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at
any time shall be computed as the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries. The
term "wholly owned Subsidiary" shall exclude any directors' or officers'
qualifying shares which may be outstanding.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(h)(iii).
"Taxes" has the meaning specified in Section 2.12(a).
"Termination Date" means, with respect to each Lender the earlier
of (a) October 10, 1996 or, if extended pursuant to Section 2.04(b), the
date to which the Commitment of such Lender is so extended pursuant to
Section 2.04 and (b) the date of termination in whole of the Commitments
pursuant to Section 2.04 or 6.01.
"Total Debt" means, as of the end of any period of four
consecutive Fiscal Quarters, all Indebtedness for Borrowed Money
(including, without limitation, the aggregate outstanding principal
amount of all Advances and loans under other revolving credit facilities
and lines of credit and the like but excluding undrawn letters of credit
and the Trade Credit Facility) of Group and its Subsidiaries, on a
Consolidated basis at such time.
"Trade Credit Facility" means (i) the revolving loan facility
under the Credit Agreement dated as of July 16, 1993 among the Borrower,
certain lenders party thereto and Scotiabank, as agent for said lenders,
and (ii) the revolving loan facility under the Amended and Restated
Credit Agreement dated as of August 31, 1995 among the Borrower, certain
lenders party thereto and Scotiabank, as agent for said lenders, as each
such agreement has been amended to date and the same may be amended,
extended, renewed, refinanced, replaced or otherwise modified from time
to time (provided, however, that the aggregate principal amount of Debt
thereunder shall not exceed $50,000,000 at any time outstanding, or, in
connection with any refinancing thereof, shall not exceed $100,000,000),
used by the Borrower from time to time to extend maturing trade letters
of credit for three months.
"Type" refers to the distinction between Advances bearing interest
at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Commitment" means, with respect to any Lender at any time,
(a) such Lender's Commitment at such time minus
(b) the aggregate principal amount of all Advances made by
such Lender and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(f)
("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances (each an
"Advance") to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an amount for
each such Advance not to exceed such Lender's Unused Commitment at such time.
Each Borrowing shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of Advances of the
same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Unused Commitment
in effect from time to time, the Borrower may borrow under this Section 2.01,
prepay pursuant to Section 2.05(a) and reborrow under this Section 2.01.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Borrowing in the case of
a Borrowing consisting of Eurodollar Rate Advances, or the date of the
proposed Borrowing in the case of a Borrowing consisting of Base Rate
Advances, by the Borrower to the Paying Agent, which shall give to each Lender
prompt notice thereof by telecopier or telex. Each such notice of a Borrowing
(a "Notice of Borrowing") shall be by telephone, confirmed immediately in
writing, or telecopier or telex in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing,
and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances,
the initial Interest Period for each such Advance. Each Lender shall, before
12:00 Noon (New York City time) on the date of such Borrowing, make available
for the account of its Applicable Lending Office to the Paying Agent at the
Paying Agent's Account, in same day funds, such Lender's ratable portion of
such Borrowing in accordance with the respective Commitments of such Lender
and the other Lenders. After the Paying Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Paying Agent will make such funds available to the Borrower by crediting the
Borrower's Account.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than
$10,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.08, 2.09 or 2.10 and
(ii) the Advances may not be outstanding as part of more than 12 separate
Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(d) Unless the Paying Agent shall have received notice from an
Lender prior to the date of any Borrowing that such Lender will not make
available to the Paying Agent such Lender's ratable portion of such Borrowing,
the Paying Agent may assume that such Lender has made such portion available
to the Paying Agent on the date of such Borrowing in accordance with this
Section 2.02 and the Paying Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available
to the Paying Agent, such Lender and the Borrower severally agree to repay to
the Paying Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Paying Agent, at (i)
in the case of the Borrower, the interest rate applicable at such time under
Section 2.06 to Advances comprising such Borrowing and (ii) in the case of
such Lender, the Federal Funds Rate. If such Lender shall repay to the Paying
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Repayment of Advances. The Borrower shall repay to
the Paying Agent for the ratable account of the Lenders on the Termination
Date the aggregate outstanding principal amount of the Advances then
outstanding.
SECTION 2.04. Termination, Reduction or Extension of the
Commitments. (a) Termination and Reduction. The Borrower shall have the
right, upon at least three Business Days' notice to the Paying Agent, to
permanently terminate in whole or reduce in part the Unused Commitments;
provided that (i) each partial reduction of the Facility shall be in the
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof, (ii) each partial reduction of the Facility shall be made ratably
among the Lenders in accordance with their Commitments with respect to such
Facility.
(b) Extensions. At any time no earlier than 45 days and no
later than 30 days prior to the Termination Date in effect at any time, the
Borrower may, by written notice to the Paying Agent, request that the
Termination Date then in effect be extended for all or a portion of the
Commitments for a period of 364 days. Such request shall be irrevocable and
binding upon the Borrower. The Paying Agent shall promptly notify each Lender
of such request. The Lenders shall have no obligation whatsoever to agree to
any request made by the Borrower for the extension of the Termination Date for
the Commitments. If a Lender agrees, in its individual and sole discretion,
to so extend all or a portion of its Commitment (an "Extending Lender"), it
shall deliver to the Paying Agent and the Borrower a notice of its agreement
to do so, in substantially the form of Exhibit D hereto, no earlier than 30
days and no later than 25 days prior to such Termination Date and the Paying
Agent shall notify the Borrower of such Extending Lender's agreement to extend
its Commitment no later than 20 days prior to such Termination Date. The
Commitment of any Lender that fails to accept or respond to the Borrower's
request for extension of the Termination Date (a "Declining Lender") shall be
terminated on the Termination Date then in effect (without regard to any
extension by other Lenders) and on such Termination Date the Borrower shall
pay in full the principal amount of all Advances owing to such Declining
Lender, together with accrued interest thereon to the date of payment of such
principal amount, all facility fees and other fees payable to such Declining
Lender and all other amounts payable to such Declining Lender under this
Agreement (including, but not limited to, any increased costs or other
additional amounts (computed in accordance with Section 2.09) and any Taxes
incurred and reimbursable hereunder by such Declining Lender prior to such
Termination Date and amounts payable under Section 8.04(a)). The Extending
Lenders, or any of them, or any Person that would be an Eligible Assignee (a
"Replacement Lender") may offer in their sole discretion, to increase their
respective Commitments by an aggregate amount that shall not exceed the sum of
the aggregate amount of the Declining Lenders' Commitments plus the aggregate
amount of the Extending Lenders' Commitments for which such Extending Lenders
have not extended the Termination Date. Each such Extending Lender or
Replacement Lender shall deliver to the Paying Agent a notice, in
substantially the form of Exhibit D hereto, of its offer to so increase its
Commitment no later than 15 days prior to such Termination Date. The Borrower
shall, no later than one day before the Termination Date, deliver to the
Paying Agent a notice setting forth the Commitments of the Extending Lenders
and Replacement Lenders, if any, that are to become or be effective as of the
Termination Date. If the Extending Lenders and Replacement Lenders provide
Commitments in an aggregate amount equal to at least 50% of the aggregate
amount of the Commitments requested by the Borrower to be extended, then,
effective on the Termination Date in effect at the time of the Borrower's
request, (A) the Termination Date shall be extended by 364 days for such
Extending Lenders' and Replacement Lenders' Commitments and (B) the Commitment
of each Extending Lender and Replacement Lender shall be the amount specified
in the notice provided by the Borrower to the Paying Agent (which amount shall
not exceed the amount specified by each such Extending Lender and Replacement
Lender in its most recent notice to the Paying Agent).
SECTION 2.05. Prepayments. (a) Optional Prepayments. The
Borrower may, upon at least one Business Day's notice in the case of Base Rate
Advances and three Business Days' notice in the case of Eurodollar Rate
Advances, in each case to the Paying Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding aggregate principal amount of the
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (i) each partial prepayment
shall be in an aggregate principal amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) no such prepayment of a
Eurodollar Rate Advance shall be made other than on the last day of an
Interest Period therefor.
(b) Mandatory Prepayments. The Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Advances comprising part of the
same Borrowings equal to the amount by which (i) the sum of the aggregate
principal amount of the Advances, then outstanding exceeds (ii) the aggregate
amount of the Commitments on such Business Day.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to
each Lender from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(x) the Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
first day of each January, April, July and October during such periods.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x) the
Eurodollar Rate for such Interest Period for such Advance plus (y) the
Applicable Margin in effect from time to time, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest
Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per
annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and
(ii) to the fullest extent permitted by law, the amount of any interest,
fee or other amount payable hereunder that is not paid when due, from the
date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on Base Rate Advances pursuant to clause
(a)(i) above.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrower shall pay
to the Paying Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable
quarterly on the first Business Day of each January, April, July and October,
commencing January 1, 1996, and on the Termination Date, at the rate per annum
equal to the Applicable Percentage in effect from time to time on the average
daily Unused Commitment of such Lender; provided, however, (i) that any
commitment fee accrued with respect to any of the Commitments of a Defaulting
Lender during the period prior to the time such Lender became a Defaulting
Lender and unpaid at such time shall not be payable by the Borrower so long as
such Lender shall be a Defaulting Lender except to the extent that such
commitment fee shall otherwise have been due and payable by the Borrower prior
to such time and (ii) that no commitment fee shall accrue on any of the
Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Agent's Fees. The Borrower shall pay to each of the Agents
for its own account such fees as may from time to time be agreed between the
Borrower and such Agent.
SECTION 2.08. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Paying Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.08, 2.09 and 2.10, Convert all Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b). Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
each such Advance. Each notice of Conversion shall be irrevocable and binding
on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $10,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Paying Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost (other than in taxes,
including interest, additions to tax and penalties relating thereto except to
the extent that the same are required to be paid pursuant to Section 2.12
hereof) to any Lender of agreeing to make or of making, funding or maintaining
Eurodollar Rate Advances (excluding for purposes of this Section 2.09 any such
increased costs resulting from (i) Taxes, Other Taxes, Excluded Taxes or taxes
excluded from the definitions of Taxes or Other Taxes in Section 2.12(e) or
from indemnification pursuant to Section 2.12(f) (as to which Section 2.12
shall govern) and (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Applicable
Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to
the Paying Agent), pay to the Paying Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost; provided, however, that, before making any such demand, each Lender
agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost and would not, in the reasonable judgment
of such Lender, be otherwise disadvantageous to such Lender. A certificate as
to the amount of such increased cost, submitted to the Borrower by such
Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the amount of
such capital is increased by or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of such type, then, upon
demand by such Lender Party (with a copy of such demand to the Paying Agent),
the Borrower shall pay to the Paying Agent for the account of the Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender in light of such circumstances, to the extent that such
Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend. A certificate as to such
amounts submitted to the Borrower by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least a majority of the then aggregate unpaid
principal amount thereof notify the Paying Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost
(excluding for purposes of this Section 2.09 any such increased costs
resulting from (i) Taxes, Other Taxes, Excluded Taxes or taxes excluded from
the definitions of Taxes or Other Taxes in Section 2.12(e) or from
indemnification pursuant to Section 2.12(f) (as to which Section 2.12 shall
govern) and (ii) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Applicable
Lending Office or any political subdivision thereof) to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such
Interest Period, the Paying Agent shall forthwith so notify the Borrower and
the Lenders, whereupon (i) each such Eurodollar Rate Advance under any
Facility will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Paying Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no
longer exist.
SECTION 2.10. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Paying Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to fund or maintain Eurodollar Rate Advances hereunder, (i) each
Eurodollar Rate Advance will automatically, upon such demand, Convert into a
Base Rate Advance and (ii) the obligation of the Lenders to make Eurodollar
Rate Advances or to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Paying Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of counterclaim
or set-off (except as otherwise provided in Section 2.13, not later than 11:00
A.M. (New York City time) on the day when due in U.S. dollars to the Paying
Agent at the Paying Agent's Account in same day funds. The Paying Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest or commitment fees ratably (other than amounts
payable pursuant to Section 2.09, 2.12 or 8.04(c)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(c), from and after the
effective date specified in such Assignment and Acceptance, the Paying Agent
shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in
such payments for periods prior to such effective date directly between
themselves.
(b) If the Paying Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances to which, or the manner in which, such
funds are to be applied, the Paying Agent may, but shall not be obligated to,
elect to distribute such funds to each Lender ratably in accordance with such
Lender's proportionate share of the principal amount of all outstanding
Advances, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender, and for application to such principal
installments, as the Paying Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time against any or all of
the Borrower's accounts with such Lender any amount so due.
(d) All computations of interest and fees shall be made by the
Paying Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring
in the period for which such interest or commitment fees are payable. Each
determination by the Paying Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or commitment
fee, as the case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(f) Unless the Paying Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the Paying
Agent may assume that the Borrower has made such payment in full to the Paying
Agent on such date and the Paying Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have
so made such payment in full to the Paying Agent, each Lender shall repay to
the Paying Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to
the Paying Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
each Agent, Excluded Taxes (all such non-Excluded Taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under any Note to any
Lender or any Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.12) such Lender or
such Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender and each Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) paid by such Lender or such Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within 30 days from
the date such Lender or such Agent (as the case may be) makes written demand
therefor, including with such demand an identification of the Taxes or Other
Taxes (together with the amounts thereof) with respect to which such
indemnification is being sought.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Paying Agent and the Documentation Agent, at
their respective addresses referred to in Section 8.02, the original or a
certified copy of a receipt evidencing payment thereof. In the case of any
payment hereunder or under the Notes by or on behalf of the Borrower through
an account or branch outside the United States or on behalf of the Borrower by
a payor that is not a United States person, if the Borrower determines that no
Taxes are payable in respect thereof, the Borrower shall furnish, or shall
cause such payor to furnish, to the Paying Agent and the Documentation Agent,
at such address, an opinion of counsel acceptable to the Paying Agent stating
that such payment is exempt from Taxes. For purposes of this subsection (d)
and subsection (e), the terms "United States" and "United States person" shall
have the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender, and on the date
of the Assignment and Acceptance pursuant to which it becomes a Lender in the
case of each other Lender, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Lender remains lawfully able
to do so), shall provide the Borrower with two original Internal Revenue
Service forms 1001, 4224 or W-8 as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes. If any Lender which is
not a "United States person" determines that it is unable to submit to the
Borrower or the Documentation Agent any form or certificate that such
Lender is otherwise required to submit pursuant to this Section 2.12(e), or
that it is required to withdraw or cancel any such form or certificate, or
that any such form or certificate previously submitted has otherwise become
ineffective or inaccurate, such Lender shall promptly notify the Borrower
and the Documentation Agent of such fact. In addition, if a Lender
provides a form W-8 (or any successor or related form) to the Documentation
Agent and the Borrower pursuant to this Section 2.14(e), such Lender shall
also provide a certificate stating that such Lender is not a "bank" within
the meaning of section 881(c)(3)(A) of the Internal Revenue Code of 1986
and shall promptly notify the Documentation Agent and the Borrower if such
Lender determines that it is no longer able to provide such certification.
If the form provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at
such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the
Assignment and Acceptance pursuant to which a Lender becomes a party to
this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall
include (in addition to withholding taxes that may be imposed in the future
or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date.
Upon the reasonable request of the Borrower or the Documentation Agent,
each Lender that has not provided the forms or other documents, as provided
above, on the basis of being a United States person shall submit to the
Borrower and the Documentation Agent a certificate to the effect that it is
such a "United States person" (as defined in Section 7701(a)(30) of the
Internal Revenue Code).
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in Section 2.12(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which such Lender became a Lender hereunder or if such form
otherwise is not required under the first sentence of subsection (e) above
because the Borrower has not requested in writing such form subsequent to the
date on which such Lender became a Lender hereunder), such Lender shall not be
entitled to indemnification under Section 2.12(a) or (c) with respect to Taxes
imposed by the United States; provided, however, that should a Lender become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as the Lender shall reasonably request to
assist the Lender to recover such Taxes.
(g) Any Lender or Agent claiming any additional amounts payable
pursuant to this Section 2.12 shall use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(h) Within 60 days after the written request of the Borrower,
each Lender Party or Agent shall execute and deliver to the Borrower such
certificates or forms as are reasonably requested by the Borrower in such
request, which can be furnished consistent with the facts and which are
reasonably necessary to assist the Borrower in applying for refunds of Taxes
paid by the Borrower hereunder or making payment of Taxes hereunder; provided,
however, that no Lender Party or Agent shall be required to furnish to the
Borrower any financial or other information which it considers confidential.
The cost of preparing any materials referred to in the previous sentence shall
be borne by the Borrower. If a Lender Party or Agent determines in good faith
that it has received a refund of any Taxes or Other Taxes with respect to
which Borrower has made a payment of additional amounts, such Lender Party or
Agent shall pay to the Borrower an amount that such Lender Party or Agent
determines in good faith to be equal to the net benefit, after tax, that was
obtained by such Lender Party or Agent (as the case may be) as a consequence
of such refund.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) on account of Obligations owing to it
(other than pursuant to Section 2.09, 2.12 or 8.04(c)) in excess of its
ratable share of payments on account of Obligations obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in Obligations owing to them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.13 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely to refinance amounts outstanding under the Existing Credit Agreement,
to provide working capital for the Borrower and for general corporate purposes
of the Borrower and its Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any
one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower
may, so long as no Default shall occur or be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise apply
the Obligation of the Borrower to make such payment to or for the account of
such Defaulting Lender against the Obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, the Borrower
shall so set off and otherwise apply its Obligation to make any such payment
against the Obligation of such Defaulting Lender to make any such Defaulted
Advance on or prior to such date, the amount so set off and otherwise applied
by the Borrower shall constitute for all purposes of this Agreement and the
other Loan Documents an Advance by such Defaulting Lender made on the date
under the Facility pursuant to which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01. Such Advance shall be a
Base Rate Advance and shall be considered, for all purposes of this Agreement,
to comprise part of the Borrowing in connection with which such Defaulted
Advance was originally required to have been made pursuant to Section 2.01,
even if the other Advances comprising such Borrowing shall be Eurodollar Rate
Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Paying Agent at any time the
Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (B) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise
required to be made by the Borrower to or for the account of such Defaulting
Lender which is paid by the Borrower, after giving effect to the amount set
off and otherwise applied by the Borrower pursuant to this subsection (a),
shall be applied by the Paying Agent as specified in subsection (b) or (c) of
this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall be
a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to any Agent or any of the other Lenders and (iii) the Borrower shall make any
payment hereunder or under any other Loan Document to the Paying Agent for the
account of such Defaulting Lender, then the Paying Agent may, on its behalf or
on behalf of such other Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the Borrower to or
for the account of such Defaulting Lender to the payment of each such
Defaulted Amount to the extent required to pay such Defaulted Amount. In the
event that the Paying Agent shall so apply any such amount to the payment of
any such Defaulted Amount on any date, the amount so applied by the Paying
Agent shall constitute for all purposes of this Agreement and the other Loan
Documents payment, to such extent, of such Defaulted Amount on such date. Any
such amount so applied by the Paying Agent shall be retained by the Paying
Agent or distributed by the Paying Agent to such other Lenders, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Paying Agent and such other Lenders and, if the amount of
such payment made by the Borrower shall at such time be insufficient to pay
all Defaulted Amounts owing at such time to the Paying Agent and the other
Lenders, in the following order of priority:
(i) first, to the Agents for any Defaulted Amount then owing to
the Agents; and
(ii) second, to any other Lenders for any Defaulted Amounts then
owing to such other Lenders, ratably in accordance with such respective
Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Paying Agent pursuant to this subsection (b), shall be applied by the Paying
Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall be
a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, any Agent or any other
Lender shall be required to pay or distribute any amount hereunder or under
any other Loan Document to or for the account of such Defaulting Lender, then
the Borrower or such other Lender shall pay such amount to the Paying Agent to
be held by the Paying Agent, to the fullest extent permitted by applicable
law, in escrow or the Paying Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds
held by the Paying Agent in escrow under this subsection (c) shall be
deposited by the Paying Agent in an account with the Paying Agent, in the name
and under the control of the Paying Agent, but subject to the provisions of
this subsection (c). The terms applicable to such account, including the rate
of interest payable with respect to the credit balance of such account from
time to time, shall be the Paying Agent's standard terms applicable to escrow
accounts maintained with it. Any interest credited to such account from time
to time shall be held by the Paying Agent in escrow under, and applied by the
Paying Agent from time to time in accordance with the provisions of, this
subsection (c). The Paying Agent shall, to the fullest extent permitted by
applicable law, apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to any Agent or any other Lender, as and when
such Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agents for any amount then due and payable by
such Defaulting Lender to the Agents hereunder;
(ii) second, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders hereunder,
ratably in accordance with such respective amounts then due and payable
to such other Lenders; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Paying Agent in escrow
at such time with respect to such Lender shall be distributed by the Paying
Agent to such Lender and applied by such Lender to the Obligations owing to
such Lender at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and that any Agent or any Lender may have against such Defaulting
Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections
2.01. Sections 2.01 of this Agreement shall become effective on and as of the
first date (the "Effective Date") on which the following conditions precedent
have been satisfied:
(a) The Lenders shall be satisfied with (1) the final terms and
conditions of the transactions contemplated hereby, including, without
limitation, all legal and tax aspects thereof, and (ii) the corporate
and legal structure and capitalization of each Loan Party, including,
without limitation, the terms and conditions of the charter, bylaws and
each class of capital stock of each Loan Party and of each agreement or
instrument relating to such structure or capitalization.
(b) The Lenders shall be satisfied that all obligations of the
Borrower under the Existing Credit Agreement, whether for principal,
interest, fees, expenses or otherwise, have been or, concurrently with
the making of the initial Borrowing, will be paid in full in cash, all
"Commitments" (as defined therein) terminated and all Liens securing
such Obligations released.
(c) The Lenders shall be satisfied with the price per share and
the number of shares issued and all other legal and tax aspects of the
equity offering by Group of shares of its common stock (the "Equity
Offering"); the Equity Offering shall have been consummated and Group
shall have received at least $140,000,000 in net cash proceeds
therefrom.
(d) There shall have occurred no Material Adverse Change since
January 7, 1995 and all information provided by or on behalf of the
Borrower to the Lenders prior to the delivery of their commitments shall
be true and correct in all material aspects.
(e) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, all
applicable waiting periods shall have expired without any action being
taken by any competent authority and no law or regulation shall be
applicable in the reasonable judgment of the Lenders that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.
(f) The Borrower shall have paid all accrued fees and expenses
of the Managing Agents and the Lenders (including the accrued fees and
expenses of counsel to the Agents).
(g) On the Effective Date, the following statements shall be
true and the Documentation Agent shall have received for the account of
each Lender a certificate signed by a duly authorized officer of the
Borrower, dated the Effective Date, stating that:
(i) The representations and warranties contained in each
Loan Document are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Documentation Agent shall have received on or before the
Effective Date the following, each dated such day, in form and substance
satisfactory to the Documentation Agent and (except for the Notes) in
sufficient copies for each Lender:
(i) The Notes to the order of the Lenders, respectively.
(ii) A guaranty in substantially the form of Exhibit F (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Group Guaranty"), duly executed by
Group.
(iii) A guaranty in substantially the form of Exhibit G
(together with each other guaranty delivered pursuant to Section
5.01(k), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Subsidiary Guaranty"), duly executed by the Guarantors (other
than Group).
(iv) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving this
Agreement, the Notes and each other Loan Document to which it is
or is to be a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Notes and each other Loan
Document.
(v) A copy of a certificate of the Secretary of State of
the jurisdiction of incorporation of each Loan Party, dated
reasonably near the date of the initial Borrowing, listing the
charter of such Loan Party and each amendment thereto on file in
his office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter on file in his office, (B)
such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in
good standing under the laws of such jurisdiction.
(vi) A certificate of the Borrower and each other Loan
Party, signed on behalf of the Borrower and such other Loan Party
by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the date of the initial Borrowing (the
statements made in which certificate shall be true on and as of
the date of the initial Borrowing), certifying as to (A) the
absence of any amendments to the charter of the Borrower or such
other Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.01(h)(v), (B) a true and
correct copy of the bylaws of the Borrower and such other Loan
Party as in effect on the date of the initial Borrowing and (C)
the due incorporation and good standing of the Borrower and such
other Loan Party as a corporation organized under the laws of the
applicable jurisdiction, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such other Loan
Party.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying the
names and true signatures of the officers of the Borrower and such
other Loan Party authorized to sign this Agreement, each other
Loan Document to which they are or are to be parties and the other
documents to be delivered hereunder and thereunder.
(viii)Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lenders
shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under ERISA and Welfare
Plans, collective bargaining agreements and other arrangements
with employees, annual financial statements dated January 7,
1995, interim financial statements dated the end of the most
recent fiscal quarter for which financial statements are
available (or, in the event the Lenders' due diligence review
reveals material changes since such financial statements, as of
a later date within 45 days of the day of the initial
Borrowing), pro forma financial statements and forecasts
prepared by management of the Borrower, in form and substance
satisfactory to the Lenders, of balance sheets, of operations
and stockholders' equity (deficit) and statements of cash flow
on a monthly basis for the first year following the day of the
initial Borrowing and on an annual basis for each year
thereafter until the Termination Date.
(ix) A favorable opinion of Skadden, Arps, Slate, Meagher &
Flom, counsel for the Loan Parties, in substantially the form of
Exhibit E hereto and as to such other matters as any Lender
through the Managing Agents may reasonably request.
(x) A favorable opinion of Shearman & Sterling, counsel
for the Managing Agents, in form and substance satisfactory to the
Managing Agents.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance on the occasion
of each Borrowing (including the initial Borrowing) shall be subject to the
further conditions precedent that on the date of such Borrowing or
issuance:
(a) the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing and the acceptance by the
Borrower of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of
the date of such Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date other than any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such Borrowing or issuance,
in which case such representations and warranties shall be correct
as of such specific date, and
(ii) no event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes a Default; and
(b) the Documentation Agent shall have received such other
approvals or documents, if any, as any Lender through the Documentation
Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory
to the Lenders unless an officer of the Documentation Agent responsible for
the transactions contemplated by Loan Documents shall have received notice
from such Lender prior to the date that the Borrower, by notice to the
Lenders, designates as the proposed Effective Date, specifying its
objection thereto. The Paying Agent shall promptly notify the Lenders of
the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
Each of Group and the Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed
to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. Each such Subsidiary (i) is a
corporation duly organized or a limited liability corporation duly
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify
or be licensed would not have a Material Adverse Effect and (iii) has
all requisite corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes and each other Loan Document to which it is
or is to be a party, and the consummation of the transactions
contemplated hereby, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or by-laws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and
the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Loan Party
or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is or would be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery,
recordation, filing or performance by any Loan Party of this Agreement,
the Notes or any other Loan Document to which it is or is to be a party,
or for the consummation of the transactions contemplated hereby.
(e) This Agreement has been, and each of the Notes and each
other Loan Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement
is, and each of the Notes and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance
with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles
of equity (regardless of whether enforcement is sought in equity or
at law).
(f) The Consolidated balance sheets of Group and its
Subsidiaries as at January 7, 1995, and the related Consolidated
statements of operations, stockholders' equity and cash flow of Group
and its Subsidiaries for the fiscal years then ended, accompanied by an
opinion of Ernst & Young, independent public accountants, and the
Consolidated balance sheet of Group and its Subsidiaries as at July 8,
1995, and the related Consolidated statements of operations,
stockholders' equity and cash flow of Group and its Subsidiaries for the
six months then ended, duly certified by the chief financial officer of
Group, copies of which have been furnished to each Lender, fairly
present, subject, in the case of said balance sheet as at July 8, 1995,
and said statements of operations, stockholders' equity and cash flow
for the six months then ended, to year-end audit adjustments, the
Consolidated financial condition of Group and its Subsidiaries as at
such dates and the Consolidated results of the operations of Group and
its Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and since January 7, 1995, there has been no Material Adverse
Change.
(g) The Consolidated forecasted balance sheets and statements of
operations, stockholders' equity and cash flows of Group and its
Subsidiaries delivered to the Lenders pursuant to Section 3.01(h)(viii)
or 5.01(j) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and represented, at
the time of delivery, the Borrower's best estimate of its future
financial performance, provided, however, that such forecasts do not
constitute a guaranty of future financial performance.
(h) Neither the Information Memorandum (excluding the analyst's
report contained therein which was not furnished by the Borrower) nor
any other written information, exhibit or report furnished by any Loan
Party to any Agent or Lender in connection with the negotiation of the
Loan Documents or pursuant to the terms of the Loan Documents contained
any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements made therein not misleading (after
giving effect to any supplemental information that is furnished to such
Agent or Lender which updates, amends or modifies the information set
forth therein).
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) purports to affect the
legality, validity or enforceability of this Agreement, any Note or any
other Loan Document or the consummation of the transactions contemplated
hereby or (ii) is or would be reasonably likely to have a Material
Adverse Effect.
(j) No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended.
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(l) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates.
(m) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90% and there has been no material adverse change
in the funding status of any such Plan since such date.
(n) Neither any Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(o) Neither any Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of any Loan Party
or any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(p) As of the date hereof, the aggregate annualized cost
(including, without limitation, the cost of insurance premiums) with
respect to post-retirement benefits under Welfare Plans for which the
Loan Parties and their Subsidiaries are liable does not exceed
$5,000,000.
(q) Except as described on Schedule 4.01(q): (i) the operations
and properties of each Loan Party and each of its Subsidiaries comply
with all applicable Environmental Laws and all Environmental Permits
have been obtained and are in effect for the operations and properties
of each Loan Party and its Subsidiaries and each Loan Party and its
Subsidiaries are in compliance with all such Environmental Permits,
except for such noncompliance with applicable Environmental Laws or
Environmental Permits or failure to have obtained Environmental Permits
as would not be reasonably likely to have a Material Adverse Effect and
(ii) no circumstances exist that are or would be reasonably likely to
(i) form the basis of an Environmental Action against any Loan Party or
any of its Subsidiaries or any of their properties or (ii) cause any
such property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law, that, in each case,
would reasonably be likely to have a Material Adverse Effect.
(r) Except as described on Schedule 4.01(r), none of the
properties of any Loan Party or any of its Subsidiaries is listed or, to
the Borrower's knowledge, proposed for listing on the National
Priorities List under CERCLA or any analogous state list of sites
requiring investigation or cleanup, and no underground storage tanks,
as such term is defined in 42 U.S.C.Section 6991, are located on any
property of any Loan Party or any of its Subsidiaries in violation of
any applicable Environmental Laws.
(s) Except as described on Schedule 4.01(s), neither any Loan
Party nor any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is listed
or proposed for listing on the National Priorities List under CERCLA or
any analogous state list, Hazardous Materials have not been generated,
used, treated, handled, stored or disposed of on, or released or
transported to or from, any property of any Loan Party or any of its
Subsidiaries, by any Loan Party or any of its Subsidiaries or, to the
knowledge of the Borrower, by any other third party, except in material
compliance with all applicable Environmental Laws and Environmental
Permits, and all other wastes generated at any such properties by any
Loan Party or any of its Subsidiaries or, to the knowledge of the
Borrower, by any other third party, have been disposed of in compliance
with all Environmental Laws and Environmental Permits, except, in each
of the above circumstances, where actions or activities not in
conformance with this representation would not be reasonably likely to
have a Material Adverse Effect.
(t) Each of Group and each of its Subsidiaries has filed all
income tax returns (federal, state, local and foreign) required to be
filed by it, and all other material tax returns (federal, state, local
and foreign), and has paid or caused to be paid all taxes shown thereon
to be due for the periods covered thereby, including interest and
penalties, or provided reserves for payment thereof to the extent
required under GAAP, other than taxes being contested in good faith and
by appropriate proceedings with respect to which adequate reserves in
accordance with GAAP have been established and except where failure to
so file or pay would not have a Material Adverse Effect.
(u) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the application of the proceeds or repayment
thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder,
Group and the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and Environmental Laws, except where
the failure so to comply would not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, would reasonably be likely to by law become a Lien upon
its property; provided, however, that neither the Borrower nor any of
its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors so long
as any such amount, when taken together with any amount required to be
paid as described in clause (b) of the definition of "Permitted Liens",
shall not exceed $10 million.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that Group and its Subsidiaries may consummate any
merger, consolidation or voluntary dissolution or liquidation permitted
under Section 5.02(b).
(e) Visitation Rights. At any reasonable time and from time to
time, permit any Agent or any of the Lenders or any agents or
representatives thereof, upon reasonable notice to the Borrower to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, (i) other than with respect to
transactions between the Borrower and its wholly owned Subsidiaries,
all transactions otherwise permitted under the Loan Documents with
any of their Affiliates on terms that are fair and reasonable and no
less favorable to the Borrower or such Subsidiary than it would
obtain in a comparable arm's-length transaction with a Person not an
Affiliate and (ii) with respect to transactions between the Borrower
and its wholly owned Subsidiaries, all transactions otherwise
permitted under the Loan Documents on terms that are no less
favorable to the Borrower than it would obtain in a comparable arm's-
length transaction with a Person not an Affiliate, provided, however,
that the foregoing restrictions shall not apply to transactions
pursuant to any agreement referred to in Section 5.02(a)(ii) and
provided, further, that the Borrower shall not engage in any
transaction with any such Subsidiary that would render such
Subsidiary insolvent or cause a default under, or a breach of, any
material contract to which such Subsidiary is a party.
(i) Implied Senior Rating. No less frequently than once during
every Fiscal Year, obtain from S&P (or, if unavailable, from Moody's) an
update of the Implied Senior Rating and deliver a letter to the Managing
Agents from S&P (or Moody's, as the case may be) advising the Managing
Agents of the current Implied Senior Rating.
(j) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal
Year, Consolidated and consolidating balance sheets of Group and
its Subsidiaries as of the end of such quarter and Consolidated
and consolidating statements of income and Consolidated statements
of cash flows of Group and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with
the end of such quarter, duly certified (subject to year-end audit
adjustments) by the chief financial officer of the Borrower as
having been prepared in accordance with generally accepted
accounting principles and a certificate of the chief financial
officer of Group as to compliance with the terms of this Agreement
and setting forth in reasonable detail the calculations necessary
to demonstrate compliance with Section 5.03, provided that in the
event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a
statement of reconciliation conforming such financial statements
to GAAP;
(ii) as soon as available and in any event within 90 days
after the end of each Fiscal Year of Group, a copy of the annual
audit report for such year for Group and its Subsidiaries,
containing Consolidated balance sheet of Group and its
Subsidiaries as of the end of such fiscal year and Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders by any Approved
Accounting Firm or by other independent public accountants
acceptable to the Required Lenders, and a certificate of the chief
financial officer or Group as to compliance with the terms of this
Agreement setting forth in reasonable detail the calculations
necessary to demonstrate compliance with Section 5.03 provided
that in the event of any change in GAAP used in the preparation of
such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a
statement of reconciliation conforming such financial statements
to GAAP;
(iii) as soon as available and in any event no later than 45
days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Managing
Agents, of balance sheets, income statements and cash flow
statements on a monthly basis for the fiscal year following such
fiscal year then ended and on an annual basis for each fiscal year
thereafter until the Termination Date;
(iv) as soon as possible and in any event within two
Business Days after the occurrence of each Default continuing on
the date of such statement, a statement of the chief financial
officer of the Borrower setting forth details of such Default and
the action that the Borrower has taken and proposes to take with
respect thereto;
(v) promptly after the sending or filing thereof, copies
of all reports that the Borrower sends to any of its
securityholders, and copies of all reports and registration
statements that Group or any Subsidiary files with the Securities
and Exchange Commission or any national securities exchange;
(vi) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any of its Subsidiaries of
the type described in Section 4.01(i);
(vii) (i) promptly and in any event within 10 days after the
Borrower or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the
action, if any, that the Borrower or such ERISA Affiliate has
taken and proposes to take with respect thereto and (ii) on the
date any records, documents or other information must be furnished
to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA, a copy of such records, documents and information;
(viii)promptly and in any event within two Business Days
after receipt thereof by the Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer
any Plan;
(ix) promptly and in any event within 30 days after the
receipt thereof by the Borrower or any ERISA Affiliate, a copy of
the annual actuarial report for each Plan the funded current
liability percentage (as defined in Section 302(d)(8) of ERISA) of
which is less than 90% or the unfunded current liability of which
exceeds $5,000,000;
(x) promptly and in any event within five Business Days
after receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (B) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (C) the amount of liability incurred, or that may be incurred,
by the Borrower or any ERISA Affiliate in connection with any
event described in clause (A) or (B);
(xi) promptly after the assertion or occurrence thereof,
notice of any Environmental Action against or of any noncompliance
by Group or any of its Subsidiaries with any Environmental Law or
Environmental Permit that would reasonably be expected to have a
Material Adverse Effect;
(xii) within five Business Days after receipt thereof by any
Loan Party, copies of each notice from S&P (or Moody's, if S&P has
ceased to provided Implied Senior Ratings) indicating any change
in the Implied Senior Rating;
(xiii)such other information respecting the Borrower or any
of its Subsidiaries as any Lender through the Managing Agents may
from time to time reasonably request.
(k) Covenant To Guarantee Obligations. At such time as any new
direct or indirect Domestic Subsidiary is formed or acquired, cause such
new Subsidiary that is a wholly owned Subsidiary to (i) within 10 days
thereafter or such later time as the Borrower and the Documentation
Agent shall agree (but in any event no later than 30 additional days
thereafter), duly execute and deliver to the Documentation Agent
guarantees, in substantially the form of Exhibit G and otherwise in form
and substance reasonably satisfactory to the Documentation Agent,
guaranteeing the Borrower's Obligations under the Loan Documents,
provided, however, that the foregoing shall not apply to (A) joint
ventures or (B) any Subsidiary organized solely for the purpose of
entering into any agreements and transactions referred to in Section
5.02(a)(ii) to the extent that such agreements require that such
Subsidiary not be a Guarantor hereunder, and (ii) within 30 days
thereafter or such later time as the Borrower and the Documentation
Agent shall agree (but in any event no later than 30 additional days
thereafter), deliver to the Documentation Agent a signed copy of a
favorable opinion, addressed to the Documentation Agent, of counsel for
the Loan Parties acceptable to the Documentation Agent as to the
documents contained in clause (i) above, as to such guarantees being
legal, valid and binding obligations of such Subsidiaries enforceable in
accordance with their terms and as to such other matters as the
Documentation Agent may reasonably request.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, neither Group
nor the Borrower will at any time:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties of any character, whether now
owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than:
(i) Permitted Liens,
(ii) Liens on receivables of any kind (and in property
securing or otherwise supporting such receivables) in connection
with agreements for limited recourse sales by the Borrower or any
of its Subsidiaries for cash of such receivables or interests
therein, provided that (A) any such agreement is of a type and on
terms customary for comparable transactions in the good faith
judgment of the Board of Directors of the Borrower, (B) such
agreement does not create any interest in any asset other than
receivables (and property securing or otherwise supporting such
receivables) and proceeds of the foregoing, and (C) on any date of
determination, the aggregate face value of such receivables shall
not exceed at any time outstanding $150,000,000.
(iii) other Liens securing Debt in an aggregate principal
amount outstanding at any time not to exceed 15% of Consolidated
net tangible assets of Group and its Subsidiaries at such time.
(b) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so or to voluntarily liquidate, except that (i) any Domestic
Subsidiary of Group may merge into or consolidate with any other
Domestic Subsidiary of Group, provided that the person formed thereby
shall be a direct or indirect wholly owned Domestic Subsidiary of Group,
(ii) any Foreign Subsidiary of Group may merge into or consolidate with
any other Foreign Subsidiary of Group, provided that the Person formed
thereby shall be a direct or indirect wholly owned Foreign Subsidiary
of Group, (iii) any Domestic Subsidiary of Group may merge into or
consolidate with Group, (iv) the Borrower may merge into or consolidate
with any other Person so long as the Borrower is the surviving
corporation and (v) any Subsidiary of Group may voluntarily liquidate
and distribute its assets to Group or any direct or indirect wholly
owned Domestic Subsidiary of Group, provided, in each case, that no
Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(c) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) Debt under the Loan Documents;
(ii) Debt secured by Liens permitted by Section
5.02(a)(iii) hereof;
(iii) Debt incurred on terms customary for comparable
transactions in the good faith judgment of the Board of Directors
of the Borrower in connection with any obligation under or
resulting from any agreement referred to in Section 5.02(a)(ii);
(iv) Debt of Foreign Subsidiaries (and, without
duplication, guarantees thereof) not to exceed an aggregate of
$50,000,000 outstanding at any time, in addition to existing
Debt of Foreign Subsidiaries set forth on Schedule 5.02(c);
(v) unsecured Debt (other than letters of credit) of the
Borrower, Group or any Domestic Subsidiary that is a Guarantor;
(vi) Debt under the Trade Credit Facility in an aggregate
principal amount not to exceed $100,000,000 at any time
outstanding;
(vii) Letters of credit, including letters of credit which
may be secured pursuant to Liens permitted by Section
5.02(a)(iii), and any refinancing or renewals thereof, in an
aggregate stated amount not to exceed $100,000,000 at any time
outstanding in addition to amounts outstanding under the "Letter
of Credit Facility" (as such term is defined in the Five Year
Credit Facility);
(viii)Debt secured by Liens permitted by Section 5.02(a)(i)
hereof, but not any increase in amount thereof;
(ix) Debt under the Five Year Credit Facility and
guarantees thereof, and any refinancing or renewals thereof;
(xi) in the case of any of its Subsidiaries, Debt owing to
Group or to any of its Subsidiaries; and
(xi) Debt of Group or any of its Subsidiaries permitted
under Section 5.02(f).
No incurrence of Debt shall be permitted unless the Borrower shall be in
compliance with each of the covenants set forth in Section 5.03 both
before and after giving effect thereto.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) sales of inventory in the ordinary course of its
business;
(ii) sales, leases, transfers or other disposals of assets,
or grants of any option or other right to purchase, lease or
otherwise acquire assets following the Effective Date for fair
value (valued at the time of any such sale, lease transfer or
other disposal), in an aggregate amount from the Effective Date
not to exceed 10% of the total consolidated assets of the Borrower
and its Subsidiaries as valued at September 30, 1995, the fair
value of such assets shall have been determined in good faith by
the Board of Directors of the Borrower;
(iii) sales of assets on terms customary for comparable
transactions in the good faith judgment of the Board of Directors
of the Borrower pursuant to agreements referred to in Section
5.02(a)(ii);
(iv) transfers of assets between Group and its
Subsidiaries, and, in the case of the Borrower, subject to Section
5.02(g)(ii);
(v) sales of assets listed on Schedule 5.02(d) hereto;
(vi) sales of assets and properties of Group and its
Subsidiaries in connection with sale-leaseback transactions
otherwise permitted hereunder (including, without limitation,
under Section 5.02(c));
(vii) the sale or discount of accounts (A) owing by Persons
incorporated, residing or having their principal place of business
in the United States in an aggregate amount not exceeding
$5,000,000 in face amount per calendar year or (B) that are past
due by more than 90 days, provided that the sale or discount of
such accounts is in the ordinary course of the Borrower's business
and consistent with prudent business practices;
(viii)the licensing of trademarks and trade names by the
Borrower or any of its Subsidiaries in the ordinary course of its
business, provided that such licensing takes place on an
arm's-length basis; and
(ix) the rental by the Borrower and its Subsidiaries, as
lessors, in the ordinary course of their respective businesses, on
an arm's-length basis, of real property consisting of showrooms,
retail space, administrative space and other real property, in
each case under leases (other than Capitalized Leases).
(e) Dividends, Etc. Declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of capital stock of
Group, or purchase, redeem or otherwise acquire for value (or permit any
of its Subsidiaries to do so) any shares of any class of capital stock
of Group or any warrants, rights or options to acquire any such shares,
now or hereafter outstanding, except that, so long as no Default shall
have occurred and be continuing at the time of any action described
below or would result therefrom, Group may (i) declare and make any
dividend payment or other distribution payable in capital stock of Group
(including stock splits), (ii) purchase, redeem or otherwise acquire
shares of its capital stock or warrants, rights or options to acquire
any such shares with the proceeds received from the substantially
concurrent issue of new shares of its capital stock, (iii) declare or
pay cash dividends or other distributions to its stockholders or
purchase, redeem, retire, defease or otherwise acquire shares of its
capital stock or warrants, rights or options to acquire any such shares
for cash solely out of 50% of the net income of Group and its
Subsidiaries beginning with the Fiscal Year ended on or about December
31, 1993 and computed on a cumulative Consolidated basis, plus the
proceeds of Capital Stock Issuances by Group completed after the
Effective Date, (iv) purchase, redeem or otherwise acquire or issue or
sell shares of its capital stock or warrants, rights or options to
acquire any such shares in each case pursuant to such management,
employee or director stock option or stock purchase programs as are
approved by the Board of Directors of Group and, if required by law, the
shareholders of Group, and (v) issue stock to effect Investments
permitted by and subject to the terms of Sections 5.02(f) and (g).
(f) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) Investments by Group in its wholly owned Foreign
Subsidiaries in a net aggregate amount (after giving effect to any
dividends or other returns of capital received from any such
Foreign Subsidiaries) invested from the date hereof not to exceed
$125,000,000;
(ii) Investments by Group in its wholly owned Domestic
Subsidiaries;
(iii) the Guaranties;
(iv) Investments in Cash Equivalents;
(v) other Investments in a net aggregate amount (after
giving effect to any dividends or other returns of capital)
invested from the date hereof not to exceed $50,000,000;
(vi) endorsement of negotiable instruments for deposit or
collection in the ordinary course of business;
(vii) Investments representing stock or obligations issued
to Group or any of its Subsidiaries in settlement of claims
against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of Group or
such Subsidiary;
(viii) Investments representing the Debt of any Person
owing as a result of the sale by Group or any of its Subsidiaries
in the ordinary course of business of products or services (on
customary trade terms);
(ix) loans or advances, not to exceed $10,000,000 in the
aggregate at any one time outstanding, to (A) employees of the
Borrower and its Subsidiaries as travel advances, short-term loans
or relocation expenses, and (B) to employees and independent sales
representatives as commission advances;
(x) Investments outstanding on the date hereof and
described on Schedule 5.02(f), but not any additional investments
therein (other than as set forth thereon);
(xi) Investments represented by the "L/C Cash Collateral
Account" (as such term is defined in the Five Year Credit
Facility) and the other bank accounts permitted hereunder;
(xii) Investments in Star/Warnaco International, a Cayman
Islands general partnership, or other ventures reasonably related
thereto, in a net aggregate amount (after giving effect to any
dividends or other returns of capital) invested from the date
hereof not to exceed $5,000,000 from the date hereof;
(xiii)Investments made with the capital stock of Group or
any of its Subsidiaries or with the proceeds of any Capital Stock
Issuance by Group; and
(xiv) Investments otherwise permitted under Section 5.02(c).
(g) Nature of Business. (i) Make, or permit any of its
Subsidiaries to make, (A) any change in the nature of its business as
carried on at the date hereof in a manner materially adverse to the
Agents and the Lenders) or (B) any investments, including, without
limitation, Investments other than in apparel manufacturing or
wholesaling businesses or apparel accessories manufacturing or
wholesaling businesses (or in related retail businesses on a basis
consistent with past practices) except pursuant to Sections 5.02(f)(v)
and (xii), or (ii) transfer, in aggregate from the Effective Date, from
the Borrower to Group or to any of the Subsidiaries of Group other than
the Borrower operating assets (valued at the time of any such transfer)
in excess of 20% of the Consolidated assets of Group and its
Subsidiaries as valued at September 30, 1995, provided, however, that
the limitation of this clause (ii) shall not apply to mergers,
consolidations or liquidations permitted under Section 5.02(b).
(h) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies
(except as required or permitted by the Financial Accounting Standards
Board or generally accepted accounting principles), reporting practices
or Fiscal Year.
SECTION 5.03. Financial Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, Group and the
Borrower will:
(a) Minimum Net Worth. Maintain at all times during each Fiscal
Quarter Net Worth of not less than $225,000,000, plus 50% of cumulative
Consolidated net income (if any) but without deduction for net losses,
of Group and its Subsidiaries (with cumulative Consolidated net income
calculated from January 7, 1995 through the date on which Group receives
an Implied Senior Rating of A-), plus the aggregate amount of any
additions to the Consolidated stockholders' equity of Group and its
Subsidiaries made during such period as a result of any Capital Stock
Issuance.
(b) Leverage Ratio. Maintain, as of the end of each Fiscal
Quarter, a ratio of Total Debt to the sum of Total Debt plus Net Worth
of not greater than the amount set forth below for each period set forth
below:
Fiscal Quarter
Ending On Or About Ratio
------------------ -----
December 31, 1995 0.550:1.00
March 31, 1996 0.550:1.00
June 30, 1996 0.550:1.00
September 30, 1996 0.550:1.00
December 31, 1996 and thereafter 0.500:1.00
(c) Fixed Charge Coverage Ratio. Maintain, as of the end of
each period of four consecutive Fiscal Quarters, a Fixed Charge Coverage
Ratio of not less than the amount set forth below for each period set
forth below:
Four Consecutive Fiscal Quarter
Period Ending On Or About Ratio
------------------------------- -----
December 31, 1995 1.20:1.00
March 31, 1996 1.20:1.00
June 30, 1996 1.20:1.00
September 30, 1996 1.20:1.00
December 31, 1996 1.20:1.00
March 31, 1997 1.25:1.00
June 30, 1997 1.25:1.00
September 30, 1997 1.25:1.00
December 31, 1997 1.25:1.00
March 31, 1998 1.25:1.00
June 30, 1998 1.25:1.00
September 30, 1998 1.25:1.00
December 31, 1998 1.25:1.00
March 31, 1999 and thereafter 1.30:1.00
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable; or the Borrower or any other Loan
Party shall fail to pay any interest on any Advance or make any other
payment of fees or other amounts payable under any Loan Document within
three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made; or
(c) (i) Group or the Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01(d) or (k),
5.02 or 5.03, or (ii) any Loan Party shall fail to perform or observe
any other term, covenant or agreement contained in any Loan Document on
its part to be performed or observed if such failure shall remain
unremedied for 30 days (A) after written notice thereof shall have been
given to the Borrower by any Agent or any Lender or (B) after any
officer of the Borrower obtains knowledge thereof; or
(d) Any Loan Party or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding
in a principal or notional amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party
or such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption [or other than as
a result of any event which provides cash to such Loan Party in an
amount sufficient to satisfy such redemption or prepayment]), purchased
or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated
maturity thereof; or
(e) Group, the Borrower or any of their Material Subsidiaries
(or any group of Subsidiaries which, in the aggregate, would constitute
a Material Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any
Group, the Borrower or any of their Subsidiaries (or any group of
Subsidiaries which, in the aggregate, would constitute a Material
Subsidiary) seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or such Loan
Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless the payment of such judgment or
order is covered by insurance and such insurance coverage is not in
dispute.
(g) Any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that could be reasonably
expected to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(h) any provision of any Loan Document, after delivery thereof
pursuant to Section 3.01 or 5.01(l), shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(i) (A) Group shall at any time cease to have legal and beneficial
ownership of 100% of the capital stock of the Borrower (except if such
parties shall merge); or (B) any Person, or two or more Persons acting
in concert, shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Voting
Stock of Group (or other securities convertible into such Voting Stock)
representing 25% or more of the combined voting power of all Voting
Stock of Group (other than Excluded Persons); or (C) any Person, or two
or more Persons acting in concert, shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of, the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of Group, or control over Voting Stock of Group
(or other securities convertible into such securities) representing 25%
or more of combined voting power of all Voting Stock of Group (other
than Excluded Persons); or (D) Linda J. Wachner (or, in the case of her
death or disability, another officer or officers of comparable
experience and ability selected by the Borrower within 180 days
thereafter after consultation with the Managing Agents) shall cease
to be Chairman and Chief Executive Officer of Group and the
Borrower); or
(j) any ERISA Event shall have occurred with respect to a Plan of
any Loan Party or any of its ERISA Affiliates, and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans of the
Loan Parties and their ERISA Affiliates with respect to which an ERISA
Event shall have occurred and then exist (or the liability of the Loan
Parties and their ERISA Affiliates related to such ERISA Event) exceeds
$10,000,000; or
(k) any Loan Party or any of its ERISA Affiliates shall be in
default, as defined in Section 4219(c)(5) of ERISA, with respect to any
payment of Withdrawal Liability, and the sum of the outstanding balance
of such Withdrawal Liability and the outstanding balance of any other
Withdrawal Liability that any Loan Party or any of its ERISA Affiliates
has incurred exceeds $10,000,000; or
(l) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any
of its ERISA Affiliates, that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and, as a result of such reorganization or termination, the
aggregate annual contributions of the Loan Parties and their ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans, for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs, by an amount exceeding
$10,000,000;
then, and in any such event, the Managing Agents (i) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under
this Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and
be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to any Loan Party or any of its Material Subsidiaries
(or any group of Subsidiaries which, in the aggregate, would constitute a
Material Subsidiary) under the Federal Bankruptcy Code, (x) the obligation of
each Lender to make Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the
Notes), each Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however, that no Agent
shall be required to take any action that exposes such Agent to personal
liability or that is contrary to this Agreement or applicable law. Each Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. None of the Agents nor any of
their directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement and the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each Agent: (i) may treat the payee of any Note as the holder
thereof until the Documentation Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement and the other
Loan Documents; (iv) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement and the other Loan Documents on the part of any Loan Party or
to inspect the property (including the books and records) of any Loan Party
(v) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of or the other
Loan Documents or any other instrument or document furnished pursuant hereto;
and (vi) shall incur no liability under or in respect of this Agreement or the
other Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Scotiabank, Citibank and Affiliates. With respect to
its Commitment, the Advances made by it and the Notes issued to it, each of
Scotiabank and Citibank shall have the same rights and powers under this
Agreement and the other Loan Documents as any other Lender and may exercise
the same as though it were not an Agent; and the term "Lender" or "Lenders"
shall, unless otherwise expressly indicated, include Scotiabank and Citibank
in their individual capacities. Each of Scotiabank and Citibank and their
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan Party or any
such Subsidiary, all as if Scotiabank and Citibank were not Agents and without
any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. Each Lender agrees to indemnify
each Agent (to the extent not reimbursed by the Borrower), ratably according
to the respective principal amounts of the Notes then held by each of them (or
if no Notes are at the time outstanding or if any Notes are held by Persons
that are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against such Agent in any way relating to or arising
out of this Agreement or the other Loan Documents or any action taken or
omitted by such Agent under this Agreement or the other Loan Documents,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees
to reimburse each Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Loan Documents, to the
extent that such Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agents. Any Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Agent with the approval of the Borrower. If
no successor Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Required Lenders' removal of
the retiring Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank organized under
the laws of the United States of America or of any State thereof and having
a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders (other than any Lender which is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the initial
Borrowing, Section 3.02, (ii) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of
Lenders, that shall be required for the Lenders or any of them to take any
action hereunder, (iii) release any Material Guarantor, or (vi) amend this
Section 8.01, (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender affected by such
amendment, waiver or consent (other than any Lender which is, at such time,
a Defaulting Lender), (i) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to
such Lender or (ii) postpone any date fixed for any payment of principal
of, or interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender and (c) no amendment, waiver or
consent shall, unless in writing and signed by the Required Lenders and
each affected Lender, increase the Commitment of such Lender or subject
such Lender to any additional obligations; provided further that no
amendment, waiver or consent shall, unless in writing and signed by an
Agent in addition to the Lenders required above to take such action, affect
the rights or duties of such Agent under this Agreement or any Note. Any
request by any Loan Party for an amendment or waiver of any provision of
any Loan Document shall be made by such Loan Party by giving a written
request therefor to the Documentation Agent.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to the Borrower, at its address at 90 Park Avenue, New
York, New York 10016, Attention: Chief Financial Officer; if to any Initial
Lender or Agent, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a
Lender; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or cabled,
be effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, except that notices and communications to an
Agent pursuant to Article II, III or VII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) Group and the Borrower
agree to pay on demand (i) all reasonable costs and expenses (other than
taxes, including interest, additions to tax and penalties relating thereto,
except to the extent that the same are required to be paid pursuant to Section
2.12 hereof) of the Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and all other out-of-pocket expenses and (B) the reasonable
fees and expenses of counsel for the Agents with respect thereto, with respect
to advising the Agents as to their respective rights and responsibilities, or
the protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally, and any proceeding ancillary thereto) and (ii)
all reasonable costs and expenses (other than taxes, including interest,
additions to tax and penalties relating thereto, except to the extent that the
same are required to be paid pursuant to Section 2.12 hereof) of the Agents
and the Lenders in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally or otherwise
(including, without limitation, the reasonable fees and expenses of counsel
for the Agents and each Lender with respect thereto).
(b) Group and the Borrower agree to indemnify and hold harmless
each of the Agents and each Lender and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable fees and expenses
of counsel, but other than taxes, including interest, additions to tax and
penalties relating thereto, except to the extent that the same are required
to be paid pursuant to Section 2.12 hereof) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out
of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Notes, this
Agreement, the Facilities, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Advances or (ii) the
actual or alleged presence of Hazardous Materials on any property of the
Borrower or any of its Subsidiaries or any Environmental Action relating in
any way to the Borrower or any of its Subsidiaries, in each case whether or
not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party
or any other Person or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability or expense is
found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. The Borrower also agrees not to assert
any claim against any Agent, any Lender, any of their Affiliates, or any of
their respective directors, officers, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use
of the proceeds of the Advances, except in the event of gross negligence or
willful misconduct on the part of such Agent, Lender or Affiliate.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as
a result of a payment or Conversion pursuant to Section 2.09, 2.10 or 2.12,
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Paying Agent), pay to the Paying Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss (excluding loss
of anticipated profits and taxes, including interest, additions to tax and
penalties relating thereto, except to the extent that the same are required to
be paid pursuant to Section 2.12 hereof), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in Sections 2.09, 2.12 and 8.04 and the agreements and obligations
of any Lender or Agent contained in Section 2.12 shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the
Managing Agents to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Agreement and the Note held by such
Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of each Lender and
its Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender and
its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower, Group and the Agents and when the
Managing Agents shall have been notified by each Initial Lender that such
Initial Lender has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Agents and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
SECTION 8.07. Assignments, Designations and Participations (a)
Each Lender may assign, and, if (i) demanded by the Borrower following either
(x) a payment by the Borrower of Taxes with respect to such Lender in
accordance with Section 2.12 or (y) the occurrence of an event that would,
upon payment to such Lender of amounts hereunder, require a payment by the
Borrower of Taxes with respect to such Lender in accordance with Section 2.12
and (ii) upon at least 30 Business Days' notice to such Lender and the Paying
Agent, will assign, to one or more banks or other entities all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it
(including accrued interest) and the Note or Notes held by it); provided,
however, that (A) except in the case (x) of an assignment to a Person that,
immediately prior to such assignment, was a Lender or (y) an assignment of all
of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000, and
the amount of the Commitment of the assigning Lender being retained by such
Lender immediately after giving effect to such assignment (determined as of
the effective date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $10,000,000, (B) each such
assignment shall be to an Eligible Assignee, (C) each such assignment made
as a result of a demand by the Borrower pursuant to this Section 8.07(a)
shall be arranged by the Borrower after consultation with the Managing
Agents and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment
of a portion of such rights and obligations made concurrently with another
such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (D) no
Lender shall be obligated to make any such assignment as a result of a
demand by the Borrower pursuant to this Section 8.07(a) unless and until
such Lender shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the date of
payment of such principal amount and all other amounts payable to such
Lender under this Agreement, (E) no such assignments will be permitted
without the consent of the Managing Agents until the Managing Agents shall
have notified the Lenders that syndication of the Commitments thereunder
has been completed, and (F) the parties to each such assignment shall
execute and deliver to the Paying Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance, together with any Note or
Notes subject to such assignment and a processing and recordation fee of
$2,500. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lenders
hereunder and (y) the Lender's assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other or any other Loan Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under this Agreement or any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee
will, independently and without reliance upon the any Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to
the each Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be
performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Paying Agent shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five Business
Days after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Paying Agent in exchange for the surrendered Note a
new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if
the assigning Lender has retained a Commitment hereunder, a new Note to the
order of the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A hereto.
(d) The Paying Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agents and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of
its Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agents and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lenders rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve
any amendment or waiver of any provision of this Agreement or any Loan
Document, or any consent to any departure by any Loan Party therefrom,
except to the extent that such amendment, waiver or consent would (i)
reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, (ii) postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation or
(iii) release any Material Guarantor.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee, designee or participant or proposed assignee, designee or
participant shall agree to preserve the confidentiality of any Confidential
Information relating to the Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Confidentiality. None of the Agents nor any Lender
shall disclose any Confidential Information to any other Person without the
consent of Group and the Borrower, other than (a) to such Agent's or such
Lender's Affiliates and their officers, directors, employees, agents and
advisors and, as contemplated by Section 8.07(f), to actual or prospective
assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) to any rating
agency when required by it, provided that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to Group or the Borrower received by it from
such Lender and (d) as requested or required by any state, federal or foreign
authority or examiner regulating banks or banking.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of any New York State court or federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or the Notes, 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 any such New York State court 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 shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes in the courts of any
jurisdiction.
(b) Each of the parties hereto 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 the
Notes in any New York State or federal court. 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.
SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the
Agents and the Lenders Parties hereby irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract,
tort or otherwise) arising out of or relating to this Agreement or the Notes
or the actions of any Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
WARNACO INC.
By
--------------------------
Title:
THE WARNACO GROUP, INC.
By
--------------------------
Title:
THE BANK OF NOVA SCOTIA
as Managing Agent and Paying Agent
By
--------------------------
Title:
CITIBANK, N.A.
____________________________________,
as Managing Agent and Documentation
Agent
By
--------------------------
Title:
Initial Lenders
CHEMICAL BANK
By
--------------------------
Title:
THE INDUSTRIAL BANK OF JAPAN,
LTD., NEW YORK BRANCH
By
--------------------------
Title:
UNION BANK OF SWITZERLAND, NEW
YORK BRANCH
By
--------------------------
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By
--------------------------
Title:
THE BANK OF NEW YORK
By
--------------------------
Title:
CREDIT SUISSE, NEW YORK
By
--------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By
--------------------------
Title:
THE FUJI BANK, LTD., NEW YORK
BRANCH
By
--------------------------
Title:
COMMERZBANK AG, NEW YORK
BRANCH
By
--------------------------
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By
--------------------------
Title:
THE BANK OF CALIFORNIA, N.A.
By
--------------------------
Title:
THE BANK OF TOKYO TRUST
COMPANY
By
--------------------------
Title:
THE SUMITOMO BANK, LIMITED
By
--------------------------
Title:
MARINE MIDLAND BANK
By
--------------------------
Title:
BANK LEUMI TRUST COMPANY OF
NEW YORK
By
--------------------------
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By
--------------------------
Title:
THE SANWA BANK LIMITED
By
--------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By
--------------------------
Title:
SOCIETE GENERALE
By
--------------------------
Title:
CITIBANK, N.A.
By
--------------------------
Title:
THE BANK OF NOVA SCOTIA
By
--------------------------
Title:
SCHEDULE I
WARNACO INC.
COMMITMENTS AND
APPLICABLE LENDING OFFICES
Eurodollar
Domestic Lending
Name of Bank Commitment Lending Office Office
- ---------------- ------------- ---------------- ------------
EXHIBIT A - FORM OF NOTE
U.S.$_______________ Dated: _______________,
1995
FOR VALUE RECEIVED, the undersigned, WARNACO INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (each as defined in the 364 Day Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the
Advances made by the Lender to the Borrower pursuant to the 364 Day Credit
Agreement dated as of October __, 1995 among the Borrower, The Warnaco Group,
Inc., the banks, financial institutions and other institutional lenders listed
on the signature pages thereof, and The Bank of Nova Scotia ("Scotiabank") and
Citibank, N.A. ("Citibank") as Managing Agents, Citibank as Documentation
Agent, and Scotiabank as Paying Agent (as amended, supplemented or modified
from time to time, the "364 Day Credit Agreement"; the terms defined therein
being used herein as therein defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the 364 Day Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Scotiabank, as Paying Agent for the account of the
Lender, at _________________________, ____________________, __________, in
same day funds. Each Advance owing to the Lender by the Borrower pursuant to
the 364 Day Credit Agreement, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the 364 Day Credit Agreement. The 364 Day Credit
Agreement, among other things, (i) provides for the making of Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced
by this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
WARNACO INC.
By
----------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- ---- --------- -------------- ---------------- --------
EXHIBIT B - FORM OF NOTICE OF
BORROWING
The Bank of Nova Scotia, as Paying Agent
for the Lenders party
to the 364 Day Credit Agreement
referred to below
[Insert Address]
[Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Warnaco Inc., refers to the 364 Day Credit
Agreement, dated as of October __, 1995 (as amended, supplemented or modified
from time to time, the "364 Day Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, The Warnaco
Group, Inc., the banks, financial institutions and other institutional lenders
listed on the signature pages thereof, and The Bank of Nova Scotia
("Scotiabank") and Citibank, N.A. ("Citibank") as Managing Agents, Citibank as
Documentation Agent, and Scotiabank as Paying Agent and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the 364 Day Credit Agreement
that the undersigned hereby requests a Borrowing under the 364 Day Credit
Agreement, and in that connection sets forth below the information relating to
such Borrowing (the "Proposed Borrowing") as required by Section 2.02(a) of
the 364 Day Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________, 199_.
(ii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in each Loan
Document are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date other than any such representatives and
warranties that, by their terms, refer to a date other than the date of
such Borrowing or issuance; and
(B) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
WARNACO INC.
By
---------------------------
Title:
By
---------------------------
Title:
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364 Day Credit Agreement dated as of
October _, 1995 (as amended or modified from time to time, the "364 Day Credit
Agreement") among Warnaco Inc., a Delaware corporation (the "Borrower"), The
Warnaco Group, Inc., the banks, financial institutions and other institutional
lenders listed on the signature pages thereof, and The Bank of Nova Scotia
("Scotiabank") and Citibank, N.A. ("Citibank") as Managing Agents, Citibank as
Documentation Agent, and Scotiabank as Paying Agent. Terms defined in the 364
Day Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor's rights and obligations under the 364 Day Credit
Agreement as of the date hereof equal to the percentage interest specified on
Schedule 1 hereto of all outstanding rights and obligations under the 364 Day
Credit Agreement. After giving effect to such sale and assignment, the
Assignee's Commitments and the amount of the Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the 364 Day Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the 364 Day Credit
Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under the 364 Day
Credit Agreement or any other instrument or document furnished pursuant
thereto; and (iv) attaches the Note or Notes held by the Assignor and
requests that the Agent exchange such Note or Notes for a new Note or Notes
payable to the order of the Assignee in an amount equal to the Commitments
assumed by the Assignee pursuant hereto or new Notes payable to the order
of the Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the
Commitment retained by the Assignor under the 364 Day Credit Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
364 Day Credit Agreement, together with copies of the financial statements
referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the 364 Day Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the 364 Day Credit Agreement as
are delegated to the Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by
the terms of the 364 Day Credit Agreement are required to be performed by
it as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms
required under Section 2.12 of the 364 Day Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent.
The effective date for this Assignment and Acceptance (the "Effective Date")
shall be the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the 364 Day Credit
Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the 364
Day Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the 364 Day
Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
facility fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the 364 Day
Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: ___________%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of
Advances assigned: $__________
Principal amount of Note payable to Assignee:$__________
Principal amount of Note payable to Assignor:$__________
Effective Date(*):_______________, 199_
[NAME OF ASSIGNOR], as
Assignor
By:__________________________
Title:
Dated: _____________,
19_____
[NAME OF ASSIGNEE], as
Assignee
By:_________________________
Title:
Dated:_____________, 19 ___
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved] this
_________day of _______, 199__
THE BANK OF NOVA SCOTIA, as Paying Agent
By:________________________________
Title:
[Approved this ___________day
of _________, 199__
WARNACO, INC.
By:_______________________________
Title:
- ---------------
(*) This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent.
EXHIBIT D - FORM OF
NOTICE OF EXTENSION
OF TERMINATION DATE
[Date]
Citibank, N.A.,
as Paying Agent
1 Court Square
7th Floor, Zone 1
Long Island City, NY 11120
Attention:
Warnaco, Inc.
Ladies and Gentlemen:
Reference is made to the 364 Day Credit Agreement dated as of
October _, 1995 (as amended or modified from time to time, the "364 Day Credit
Agreement") among Warnaco Inc., a Delaware corporation (the "Borrower"), The
Warnaco Group, Inc., the banks, financial institutions and other institutional
lenders listed on the signature pages thereof, and The Bank of Nova Scotia
("Scotiabank") and Citibank, N.A. ("Citibank") as Managing Agents, Citibank as
Documentation Agent, and Scotiabank as Paying Agent. Terms defined in the 364
Day Credit Agreement are used herein with the same meaning.
Pursuant to Section 2.04(b) of the 364 Day Credit Agreement, the
Lender named below hereby notifies the Paying Agent as follows:
[The Lender named below desires to extend the Termination Date with
respect to [all] [$______] of its Commitment for a period of 364
days.]
[The Lender named below does NOT desire to extend the Termination
Date with respect to any of its Commitment for a period of 364
days.]
This notice is subject in all respects to the terms of the 364 Day
Credit Agreement, is irrevocable and shall be effective only if received by
the Paying Agent no later than [______________].
Very truly yours,
[NAME OF LENDER]
By:
----------------------------
Name:
Title:
U.S. $450,000,000
CREDIT AGREEMENT
Dated as of October 12, 1995
Among
WARNACO INC.
as Borrower
and
THE WARNACO GROUP, INC.
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
as Managing Agents
and
CITIBANK, N.A.
as Documentation Agent
and
THE BANK OF NOVA SCOTIA
as Paying Agent, Competitive Bid Agent,
Swing Line Bank and an Issuing Bank
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Page
----
SECTION 1.01. Certain Defined Terms..................................... 1
SECTION 1.02. Computation of Time Periods............................... 27
SECTION 1.03. Accounting Terms.......................................... 27
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances.............................................. 28
SECTION 2.02. Making the Advances....................................... 29
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit......................................... 33
SECTION 2.04. The Competitive Bid Advances.............................. 35
SECTION 2.05. Repayment of Advances..................................... 39
SECTION 2.06. Termination or Reduction of the Commitments............... 41
SECTION 2.07. Prepayments............................................... 41
SECTION 2.08. Interest.................................................. 42
SECTION 2.09. Fees...................................................... 43
SECTION 2.10. Conversion of Advances.................................... 44
SECTION 2.11. Increased Costs, Etc...................................... 45
SECTION 2.12. Illegality................................................ 47
SECTION 2.13. Payments and Computations................................. 47
SECTION 2.14. Taxes..................................................... 48
SECTION 2.15. Sharing of Payments, Etc.................................. 51
SECTION 2.16. Use of Proceeds........................................... 52
SECTION 2.17. Defaulting Lenders........................................ 52
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections
2.01 and 2.03............................................. 54
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance....... 57
SECTION 3.03. Determinations Under Section 3.01......................... 58
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower............ 59
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants..................................... 63
SECTION 5.02. Negative Covenants........................................ 68
SECTION 5.03. Financial Covenants....................................... 74
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default......................................... 75
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.. 78
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action.................................. 79
SECTION 7.02. Agents' Reliance, Etc..................................... 79
SECTION 7.03. Scotiabank, Citibank and Affiliates....................... 80
SECTION 7.04. Lender Credit Decision.................................... 80
SECTION 7.05. Indemnification........................................... 80
SECTION 7.06. Successor Agents.......................................... 81
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc........................................... 81
SECTION 8.02. Notices, Etc.............................................. 82
SECTION 8.03. No Waiver; Remedies....................................... 83
SECTION 8.04. Costs and Expenses........................................ 83
SECTION 8.05. Right of Set-off.......................................... 84
SECTION 8.06. Binding Effect............................................ 85
SECTION 8.07. Assignments, Designations and Participations.............. 85
SECTION 8.08. Confidentiality........................................... 90
SECTION 8.09. No Liability of the Issuing Banks......................... 90
SECTION 8.10. Execution in Counterparts................................. 90
SECTION 8.11. Governing Law............................................. 91
SECTION 8.12. Jurisdiction, Etc......................................... 91
SECTION 8.13. Waiver of Jury Trial...................................... 91
Schedules
Schedule I - List of Applicable Lending Offices
Schedule 2.03(e)- Existing Letters of Credit
Schedule 4.01(b)- Subsidiaries
Schedule 4.01(q)- Environmental Disclosure
Schedule 4.01(r)- CERCLA Sites
Schedule 4.01(s)- Hazardous Materials
Schedule 5.02(c)- Existing Debt of Foreign Subsidiaries
Schedule 5.02(d)- Assets Held For Sale
Schedule 5.02(f)- Investments
Exhibits
Exhibit A-1-Form of Term Note
Exhibit A-2-Form of Revolving Credit Note
Exhibit A-3-Form of Competitive Bid Note
Exhibit B-1-Form of Notice of Borrowing
Exhibit B-2-Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Designation Agreement
Exhibit E - Form of Opinion of Counsel for the Loan Parties
Exhibit F - Form of Group Guaranty
Exhibit G - Form of Subsidiary Guaranty
CREDIT AGREEMENT
Dated as of October 12, 1995
WARNACO INC., a Delaware corporation (together with any
successors-in-interest permitted hereunder, the "Borrower"), THE WARNACO
GROUP, INC., a Delaware corporation (together with any successors-in-interest
permitted hereunder, "Group"), the banks, financial institutions and other
institutional lenders (the "Initial Lenders") listed on the signature pages
hereof, and THE BANK OF NOVA SCOTIA ("Scotiabank") and CITIBANK, N.A.
("Citibank") as managing agents (the "Managing Agents") for the Lenders (as
hereinafter defined), Citibank as documentation agent (the "Documentation
Agent") for the Lenders, and Scotiabank as paying agent (the "Paying Agent")
and competitive bid agent (the "Competitive Bid Agent") for the Lenders and as
a Swing Line Bank and an Issuing Bank hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"364-Day Revolving Credit Facility" means the $100,000,000 senior
revolving credit facility under a credit agreement dated as of the date
hereof among the Borrower, Group, certain lenders party thereto and
Scotiabank and Citibank as agents for said lenders, as the same may be
amended, extended or otherwise modified or refinanced or otherwise
replaced from time to time.
"Advance" means a Term Advance, a Revolving Credit Advance, a
Competitive Bid Advance, a Swing Line Advance, or a Letter of Credit
Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agents" means each of the Managing Agents, the Documentation
Agent, the Paying Agent and the Competitive Bid Agent, together, in each
case, with any successor or successors of any thereof appointed pursuant
to Article VII hereof.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance
and such Lender's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance and, in the case of a Competitive Bid Advance, the office
of such Lender notified by such Lender to the Paying Agent as its
Applicable Lending Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Implied Senior Rating in effect on such
date as set forth below:
Applicable Margin Applicable Margin for
Implied Senior for Eurodollar Rate
Rating Base Rate Advances Advances
-------------- ------------------ ---------------------
BB+ or below 0.250% 0.875%
BBB- 0.000% 0.500%
BBB 0.000% 0.425%
BBB+ 0.000% 0.375%
A- or above 0.000% 0.300%
The Applicable Margin for each Advance shall be determined by
reference to the Implied Senior Rating in effect from time to time;
provided, however, that no change in the Applicable Margin shall be
effective until three Business Days after the date on which the
Managing Agents receive evidence reasonably satisfactory to them that
a new Implied Senior Rating is in effect; provided further that in
the event that at any time no Implied Senior Rating shall be in
effect, the Applicable Margin shall be 0.250% for each Base Rate
Advance and 0.875% for each Eurodollar Rate Advance. Notwithstanding
the foregoing, until the six-month anniversary of the Effective Date,
the Applicable Margin shall be 0.000% for Base Rate Advances and
0.425% for Eurodollar Rate Advances.
"Applicable Percentage" means, as of any date, a percentage per
annum determined by reference to the Implied Senior Rating in effect on
such date as set forth below:
Applicable
Implied Senior Rating Percentage
--------------------- ----------
BB+ or below 0.375%
BBB- 0.225%
BBB 0.175%
BBB+ 0.125%
A- or above 0.100%
The Applicable Percentage shall be determined by reference to the
Implied Senior Rating in effect from time to time; provided, however,
that no change in the Applicable Percentage shall be effective until
three Business Days after the date on which the Managing Agents receive
evidence reasonably satisfactory to them that a new Implied Senior
Rating is in effect; provided further that in the event that at any time
no Implied Senior Rating shall be in effect, the Applicable Percentage
shall be 0.375%. Notwithstanding the foregoing, until the six-month
anniversary of the Effective Date, the Applicable Percentage shall be
0.175%.
"Appropriate Lender" means, at any time, with respect to (a)
either of the Term or Revolving Credit Facilities, a Lender that has a
Commitment with respect to such Facility at such time, (b) the Letter of
Credit Facility, (i) the Issuing Banks and (ii) if the other Revolving
Credit Lenders shall have made Letter of Credit Advances pursuant to
Section 2.03(c) that are outstanding at such time, each such other
Revolving Credit Lender and (c) the Swing Line Facility, (i) the Swing
Line Bank and (ii) if the other Revolving Credit Lenders have made Swing
Line Advances pursuant to Section 2.02(b) that are outstanding at such
time, such other Revolving Credit Lenders.
"Approved Accounting Firm" means Arthur Andersen LLP, Coopers &
Lybrand L.L.P., Deloitte & Touche LLP, Ernst & Young LLP, Price
Waterhouse LLP or KPMG Peat Marwick LLP, or any successor thereof.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Documentation Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the higher of:
(a) the rate of interest established by the Paying Agent,
from time to time, at its Domestic Lending Office as its base rate
for loans in United States dollars; and
(b) 1/2 of one percent per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.08(a)(i).
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained
by the Borrower with Citibank at its office at 399 Park Avenue, New
York, New York 10043, Account No. 3846-9269.
"Borrowing" means a Term Borrowing, a Revolving Credit
Borrowing, a Competitive Bid Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person, any expenditures or
costs made by such Person for the acquisition, maintenance or repair of
fixed or capital assets (which are required to be capitalized on the
balance sheet of such Person in accordance with GAAP), including,
without limitation, the incurrence or assumption of any Debt (other than
Capitalized Lease Obligations) in respect of such fixed or capital
asset, and, without double counting, any payment made in respect of such
incurrence or assumption.
"Capital Stock Issuance" means the sale or issuance by any Loan
Party or any of its Subsidiaries of any capital stock, any securities
convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock of Group or any of its
Subsidiaries other than any such sale or issuance by a wholly owned
Subsidiary of the Borrower to the Borrower or to another wholly owned
Subsidiary of the Borrower and other than the issuance or sale of common
stock (or options to purchase common stock) by Group pursuant to
customary management, employee or director stock option and stock
purchase programs or other stock option or stock purchase programs with
respect to common stock of Group approved by the Board of Directors of
Group.
"Capitalized Lease Obligations" of any Person shall at any time
mean all Obligations under Capitalized Leases of such Person, in each
case taken at the amount thereof accounted for as liabilities in
accordance with GAAP at such time.
"Capitalized Leases" has the meaning specified in clause (e) of
the definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned
by any Loan Party or any Subsidiary of a Loan Party free and clear of
all Liens (other than Liens permitted hereunder): (a) securities
issued, or that are directly and fully guaranteed or insured, by the
United States Government or any agency or instrumentality thereof having
maturities of not more than 12 months from the date of acquisition, (b)
time deposits and certificates of deposit having maturities of not more
than 12 months from the date of acquisition of (i) any Lender or (ii)
any other domestic commercial bank having capital and surplus in excess
of $500,000,000, the holding company of which has outstanding commercial
paper meeting the requirements specified in clause (d) below, (c)
repurchase agreements with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b)
above entered into with any Lender or any other bank meeting the
qualifications specified in clause (b) above or with securities dealers
of recognized national standing, provided that the terms of such
agreements comply with the guidelines set forth in the Federal Financial
Institutions Examination Council Supervisory Policy Repurchase
Agreements of Depositary Institutions With Securities Dealers and Others
as adopted by the Comptroller of the Currency on October 31, 1985
(the "Supervisory Policy"), and provided further that possession or
control of the underlying securities is established as provided in
the Supervisory Policy, and (d) commercial paper rated (as of the
date of acquisition thereof) at least A-1 or the equivalent thereof
by S&P and at least P-1 or the equivalent thereof by Moody's and
maturing within six months after the date of its acquisition.
"Cash Interest Expense" means, for any period, interest expense
net of interest income on all Debt of Group and its Subsidiaries, in
each case determined for such period on a Consolidated basis for Group
and its Subsidiaries in accordance with GAAP and including, without
limitation, to the extent not otherwise included in accordance with
GAAP, (a) interest expense in respect of Debt resulting from Advances,
(b) the interest component of obligations as lessee under Capitalized
Leases, (c) commissions, discounts and other fees and charges payable in
connection with letters of credit, (d) the net payment, if any, payable
in connection with interest rate hedge agreements and other interest
rate protection contracts and (e) fees paid pursuant to Section 2.09(a),
but excluding, in each case, (x) amortization of original issue
discount, (y) the interest portion of any deferred payment obligation
and (z) other interest not payable in cash.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Citibank" has the meaning specified in the recital of parties to
this Agreement.
"Commitment" means a Term Commitment, a Revolving Credit
Commitment or a Letter of Credit Commitment.
"Competitive Bid Advance" means an advance by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the
competitive bidding procedure described in Section 2.04 and refers to a
Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Agent" has the meaning specified in the recital
of parties to this Agreement.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose
offer to make one or more Competitive Bid Advances as part of such
borrowing has been accepted under the competitive bidding procedure
described in Section 2.04.
"Competitive Bid Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit
A-3 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from a Competitive Bid Advance made by such Lender.
"Confidential Information" means information that the Borrower or
Group furnishes to any Agent or Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to such Agent or Lender from a source other than the Borrower
or Group.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.10 or 2.11.
"Current Liabilities" of any Person means (a) all Debt of such
Person except Funded Debt, Debt in respect of the 364-Day Revolving
Credit Facility and Debt in respect of Revolving Credit Advances, Letter
of Credit Advances and Swing Line Advances, (b) all amounts of Funded
Debt of such Person required to be paid or prepaid within one year after
the date of determination and (c) all other items (including taxes
accrued as estimated) that in accordance with GAAP would be classified
as current liabilities of such Person.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables
not overdue by more than 90 days incurred in the ordinary course
of such Person's business), including, without limitation, the
Trade Credit Facility,
(c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments,
(d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property
acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as
capital leases ("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any
capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to
acquire such capital stock, valued, in the case of Redeemable
preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends,
(h) all Obligations of such Person in respect of Hedge
Agreements,
(i) all Debt of others of the kinds referred to in clauses
(a) through (h) above guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (A) to pay or
purchase such Debt or to advance or supply funds for the payment
or purchase of such Debt, (B) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss,
(C) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services
irrespective of whether such property is received or such services
are rendered) or (D) otherwise to assure a creditor against loss,
and
(j) all Debt referred to in clauses (a) through (h) above
secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the amount of any Advance required to be made by such Lender Party
to the Borrower pursuant to Section 2.01 at or prior to such time which
has not been so made as of such time; provided, however, any Advance
made by the Paying Agent for the account of such Lender Party pursuant
to Section 2.02(e) shall not be considered a Defaulted Advance even if,
at such time, such Lender Party shall not have reimbursed the Paying
Agent therefor as provided in Section 2.02(e). In the event that a
portion of a Defaulted Advance shall be deemed made pursuant to Section
2.17(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant
to Section 2.01 on the same date as the Defaulted Advance so deemed made
in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender to any Agent or any
other Lender Party hereunder or under any other Loan Document at or
prior to such time which has not been so paid as of such time,
including, without limitation, any amount required to be paid by such
Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to
purchase a portion of a Swing Line Advance made by the Swing Line Bank,
(b) any Issuing Bank pursuant to Section 2.03(c) to purchase a portion
of a Letter of Credit Advance made by such Issuing Bank, (c) the Paying
Agent pursuant to Section 2.02(e) to reimburse the Paying Agent for the
amount of any Advance made by the Paying Agent for the account of such
Lender Party, (d) any other Lender Party pursuant to Section 2.15 to
purchase any participation in Advances owing to such other Lender Party
and (e) any Agent pursuant to Section 7.05 to reimburse such Agent for
such Lender Party's ratable share of any amount required to be paid by
the Lender Parties to such Agent as provided therein. In the event that
a portion of a Defaulted Amount shall be deemed paid pursuant to Section
2.17(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be made hereunder
or under any other Loan Document on the same date as the Defaulted
Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take or be the subject of any action or proceeding of a type
described in Section 6.01(e).
"Designated Bidder" means a Lender, or a wholly owned Subsidiary
of a Lender or of any Person that directly or indirectly controls a
Lender, that submits a bid.
"Designation Agreement " means a designation agreement entered
into by a Lender (other than a Designated Bidder) and a Designated
Bidder, and accepted by the Competitive Bid Agent, in substantially the
form of Exhibit D hereto.
"Documentary Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier
of Inventory to the Borrower or any of its Subsidiaries to effect
payment for such Inventory.
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Paying Agent.
"Domestic Subsidiary" means any Subsidiary of Group that is not a
Foreign Subsidiary.
"EBITDA" means, for any period, net income (or net loss) from
operations (determined without giving effect to extraordinary or
non-recurring gains or losses) plus, to the extent deducted in
calculating such net income (loss), the sum of (a) Interest Expense, (b)
income tax expense, (c) depreciation expense and (d) amortization
expense, in each case determined in accordance with GAAP.
"Effective Date" means the first date on which the conditions
specified in Sections 3.01 and 3.02 have been satisfied.
"Eligible Assignee" means (i) a wholly owned Subsidiary of a
Lender or of any Person that directly or indirectly controls a Lender;
and (ii) any other Person approved by the Managing Agents and the
Borrower, such approval not to be unreasonably withheld; provided,
however, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating
in any way to any Environmental Law, Environmental Permit or Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment or
decree relating to the environment, health, safety or Hazardous
Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan pursuant to Section 4041(a)(2)
of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of operations
at a facility of the Borrower or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
by the Borrower or any of its ERISA Affiliates from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the failure by the Borrower
or any of its ERISA Affiliates to make a payment to a Plan if the
conditions for the imposition of a lien under Section 302(f)(1) of ERISA
are satisfied; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan,
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Borrower and
the Paying Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum at which deposits in U.S. dollars are offered by
the principal office of the Paying Agent in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to the Paying Agent's Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such Interest
Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.08(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for
all Eurodollar Rate Advances or LIBO Rate Advances comprising part of
the same Borrowing means the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal
Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Rate Advances or LIBO Rate
Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Person" means (i) Linda J. Wachner or (ii) any trust of
which Linda J. Wachner is the sole trustee (or, in case of her death or
disability, another trustee of comparable experience and ability
selected by the Borrower within 180 days thereafter after consultation
with the Managing Agents).
"Excluded Taxes" means, in the case of each Lender Party,
franchise taxes and taxes upon or determined by reference to such Lender
Party's net income (including, without limitation, branch profit taxes),
in each case imposed by the United States or any political subdivision
or taxing authority thereof or therein or by any jurisdiction in which
such Lender Party has its Applicable Lending Office, is resident or in
which such Lender Party is organized or has its principal or registered
office and, in the case of each Agent, franchise taxes and net income
taxes upon or determined by reference to such Agent's net income
(including, without limitation, branch profits taxes) imposed by the
United States or by the state or foreign jurisdiction under the laws of
which such Agent is organized (or by any political subdivision of such
state or foreign jurisdiction), is resident or has its principal or
registered office.
"Existing Credit Agreement means the Credit Agreement, dated as of
October 14, 1993, as amended, among the Borrower, Group, the financial
institutions named therein, Scotiabank and Citicorp, as Managing Agents,
Citicorp, as Documentation Agent and Collateral Agent, and Scotiabank,
as Paying Agent and as Swing Line Bank and an Issuing Bank thereunder.
"Existing Letters of Credit" has the meaning specified in Section
2.03(e).
"Existing Revolving Credit Note" means a "Revolving Credit Note"
(as defined in the Existing Credit Agreement) evidencing indebtedness
under the Existing Credit Agreement.
"Existing Term Note" means a "Term Note" (as defined in the
Existing Credit Agreement) evidencing indebtedness under the Existing
Credit Agreement.
"Facility" means the Term Facility, the Revolving Credit Facility,
the Swing Line Facility or the Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Paying Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of Group and its
Consolidated Subsidiaries ending on or about March 31, June 30,
September 30 or December 31 of each year.
"Fiscal Year" means a fiscal year of Group and its Consolidated
Subsidiaries ending on or about December 31 of each year.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated
EBITDA of Group and its Subsidiaries for any four consecutive Fiscal
Quarter period plus cash lease expense of Group and its Subsidiaries
during such period to the sum of (i) Cash Interest Expense for such
period plus (ii) income taxes paid in cash by Group and its Subsidiaries
during such period plus (iii) the aggregate amount of Capital
Expenditures made by Group and its Subsidiaries during such period in
cash plus (iv) the aggregate amount of all regularly scheduled payments
of principal on all Funded Debt payable during such period by Group and
its Subsidiaries (other than the payment of principal scheduled to be
paid upon the expiration of a revolving credit or similar facility or
receivables facility, if such facility has been refinanced or replaced
(except to the extent a principal payment was made to permanently reduce
such facility in connection with such refinancing or replacement)) plus
(v) the aggregate of all cash amounts paid by Group or any of its
Subsidiaries to any Person other than the Borrower or a wholly owned
Subsidiary of the Borrower during such period pursuant to Section
5.02(e)(iii) plus (vi) without duplication, cash lease expense of Group
and its Subsidiaries during such period.
"Fixed Rate Advances" has the meaning specified in Section
2.04(a)(i).
"Foreign Subsidiary" means a Subsidiary of Group organized under
the laws of a country other than the United States or any state thereof.
"Funded Debt" of any Person means Debt (other than Debt incurred
pursuant to Section 5.02(c)(iii) hereof) of such Person that by its
terms matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person, to a date more than one year after such
date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more
than one year after such date, including, without limitation, all
amounts of Funded Debt of such Person required to be paid or prepaid
within one year after the date of its creation.
"GAAP" has the meaning specified in Section 1.03.
"Group" has the meaning specified in the recital of parties to
this Agreement.
"Group Guaranty" has the meaning specified in Section 3.01(h)(ii).
"Guaranties" means the Group Guaranty and the Subsidiary Guaranty.
"Guarantors" means Group and each of its Domestic Subsidiaries
(other than the Borrower) which is required to guarantee the Borrower's
Obligations under the Loan Documents pursuant to Section 5.01(k).
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, radon gas and any other chemicals,
materials or substances designated, classified or regulated as being
"hazardous" or "toxic", or words of similar import, under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Implied Senior Rating" means the rating assigned by S&P to
Group's unsecured "implied senior debt" from time to time, as
notified to Group by S&P in its letter dated May 24, 1994 or any
subsequent letter issued by S&P (which rating on the date hereof is
BBB-), or, if such rating is unavailable, the equivalent rating
assigned by Moody's to Group's unsecured "implied senior debt", as
notified in writing to Group by Moody's. For purposes of this
Agreement, the following is the equivalent rating by Moody's for each
rating by S&P:
S&P Moody's
--- -------
BB+ Ba1
BBB- Baa3
BBB Baa2
BBB+ Baa1
A- A3
"Indebtedness for Borrowed Money" of any Person means all Debt of
such Person for borrowed money or evidenced by notes, bonds, debentures
or other similar instruments, all Obligations of such Person for the
deferred purchase price of any property, service or business (other than
trade accounts payable (including the Trade Credit Facility) incurred in
the ordinary course of business and constituting Current Liabilities),
and all Obligations of such Person under Capitalized Leases and finance
leases.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Information Memorandum" means the information memorandum dated
September 1995 used by the Managing Agents in connection with the
syndication of the Commitments.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Expense" means, with respect to any Person for any
period, the excess, if any, of (i) interest expense (whether cash or
accretion) of such Person during such period determined in accordance
with GAAP, and shall include in any event, without limitation, interest
expense with respect to Indebtedness for Borrowed Money, the Trade
Credit Facility and payments under Hedge Agreements over (ii) interest
income of such Person for such period, including payments received under
Hedge Agreements.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing and each LIBO
Rate Advance comprising part of the same Competitive Bid Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or LIBO
Rate Advance or the date of the Conversion of any Base Rate Advance into
such Eurodollar Rate Advance, and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and,
thereafter, with respect to Eurodollar Rate Advances, each subsequent
period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months, or, if available to all
Lenders, nine or 12 months, as the Borrower may, upon notice received by
the Paying Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(a) the Borrower may not select any Interest Period that
ends after any principal repayment installment date unless, after
giving effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances and LIBO Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date shall be at least equal to
the aggregate principal amount of Advances due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving
Credit Borrowing or for LIBO Rate Advances comprising part of the
same Competitive Bid Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day,
unless the Borrower and the Paying Agent otherwise agree; and
(d) whenever the first day of any Interest Period occurs
on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds
such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month unless the Borrower and the Paying Agent otherwise agree.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such Person
or any other investment in such Person, including, without limitation,
any arrangement pursuant to which the investor incurs Debt of the types
referred to in clauses (i) or (j) of the definition of "Debt" in respect
of such Person.
"Issuing Bank" means Scotiabank and any other Revolving Credit
Lender approved by the Borrower and the Managing Agents that is a
commercial bank, acting through a domestic branch, and has a Letter of
Credit Commitment, as issuer of a Letter of Credit, and, with respect to
the Existing Letters of Credit issued by it pursuant to the Existing
Credit Agreement, Societe Generale.
"L/C Cash Collateral Account" means the interest-bearing cash
collateral account to be established and maintained by the Paying Agent,
over which the Paying Agent shall have sole dominion and control, upon
terms as may be satisfactory to the Paying Agent.
"L/C Related Documents" has the meaning specified in Section
2.05(d)(ii)(A).
"Lender Party" means any Lender, any Issuing Bank and any Swing
Line Bank.
"Lenders" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"Letter of Credit Advance" means an advance made by any Issuing
Bank or any Revolving Credit Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to any Issuing
Bank at any time, the amount set forth opposite such Issuing Bank's name
on Schedule I hereto under the caption "Letter of Credit Commitment" or,
if such Issuing Bank has entered into one or more Assignments and
Acceptances, set forth for such Issuing Bank in the Register maintained
by the Documentation Agent pursuant to Section 8.07(c) as such Issuing
Bank's "Letter of Credit Commitment", as such amount may be reduced at
or prior to such time pursuant to Section 2.06.
"Letter of Credit Facility" means, at any time, an amount equal to
the lesser of (a) the aggregate amount of the Letter of Credit
Commitments of the Issuing Banks at such time and (b) $100,000,000, as
such amount may be reduced at or prior to such time pursuant to Section
2.06.
"Letters of Credit" has the meaning specified in Section 2.01(d).
"LIBO Rate" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum at which deposits in U.S. dollars are offered by
the principal office of the Paying Agent, in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to the amount that would be the Paying Agent's
ratable share of such Borrowing if such Borrowing were to be a Revolving
Credit Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"LIBO Rate Advances" has the meaning specified in Section
2.04(a)(i).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"Loan Documents" means (a) for purposes of this Agreement, the
Notes and any amendments or modifications hereof or thereof and for all
other purposes other than for purposes of the Guarantees, (i) this
Agreement, (ii) the Notes, (iii) the Guarantees, (iv) each Letter of
Credit Agreement and (v) each L/C Related Document, and (b) for purposes
of the Guarantees, (i) this Agreement, (ii) the Notes, (iii) the
Guarantees, (iv) each Letter of Credit Agreement, (v) each L/C Related
Document and (v) the interest rate Hedge Agreements entered into by
Group or the Borrower with Lender Parties, in the case of each of the
foregoing agreements referred to in clause (a) or (b), and any
amendments, supplements or modifications hereof or thereof.
"Loan Parties" means the Borrower and the Guarantors.
"Managing Agents" has the meaning specified in the recital of
parties to this Agreement.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or of Group and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Group and its
Subsidiaries taken as a whole, (b) the rights and remedies of any Agent
or Lender Party under any Loan Document or (c) the ability of any Loan
Party to perform its Obligations under any Loan Document to which it is
or is to be a party.
"Material Guarantor" means, at any time, a Guarantor having (i) at
least 10% of Consolidated total assets of Group and its Subsidiaries
(determined as of the last day of the most recent Fiscal Quarter) or
(ii) at least 10% of Consolidated EBITDA of Group and its Subsidiaries
for the 12-month period ending on the last day of the most recent Fiscal
Quarter.
"Material Subsidiary" of any Person means, at any time, a
Subsidiary of such Person having (i) at least $5,000,000 in total assets
(determined as of the last day
of the most recent fiscal quarter of such Person) or (ii) EBITDA of at
least $5,000,000 for the 12-month period ending on the last day of the
most recent fiscal quarter of such Person.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates and at least one Person
other than the Borrower and its ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Worth" at any time means total assets of Group and its
Subsidiaries at such time over total liabilities of Group and its
Subsidiaries at such time, in each case as determined on a Consolidated
basis in accordance with GAAP, without giving effect to charges
resulting from (i) the implementation of Statement of Position 93-7
during the 1995 Fiscal Year ended on or about January 7, 1996 with
respect to certain advertising and promotion costs in an aggregate
amount of approximately $4,000,000 and (ii) the prepayment of
indebtedness during the 1995 Fiscal Year ended on or about January 7,
1996 in an aggregate amount of approximately $5,000,000.
"Note" means a Term Note, a Revolving Credit Note or a Competitive
Bid Note.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning specified
in Section 2.04(a)(i).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).
"Obligation" means, with respect to any Person, any obligation of
such Person of any kind, including, without limitation, any liability of
such Person on any claim,
whether or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any proceeding referred to in Section 6.01(e).
Without limiting the generality of the foregoing, the Obligations of the
Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document and (b) the obligation
to reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"Other Taxes" has the meaning specified in Section 2.14(b).
"Paying Agent" has the meaning specified in the recital of parties
to this Agreement.
"Paying Agent's Account" means the account of the Paying Agent
maintained by the Paying Agent with Scotiabank at its office at One
Liberty Plaza, New York, New York 10006, for further credit to
Scotiabank Atlanta Agency, Special Management Account No. 0608335,
Reference: Warnaco.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means the following:
(a) Liens, other than in favor of the PBGC, arising out of
judgments or awards in respect of which Group or any of its
Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review and in respect of which it shall have
secured a subsisting stay of execution pending such appeal or
proceedings for review, provided it shall have set aside on its
books adequate reserves, in accordance with GAAP, with respect to
such judgment or award and provided further that the aggregate
amount secured by such Liens does not exceed $5,000,000 in any one
case or $10,000,000 in the aggregate;
(b) Liens for taxes, assessments or governmental charges
or levies, provided payment thereof shall not at the time be
required in accordance with the provisions of Section 5.01(b) and
such amount, when taken together with any amount payable under
Section 5.01(b) as to which any Lien has been attached as
described in the last phrase thereof, shall not exceed
$10,000,000;
(c) deposits, Liens or pledges to secure payments of
workmen's compensation and other payments, unemployment and other
insurance, old-age pensions or other social security obligations,
or the performance of bids, tenders, leases, contracts (other than
contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds, or
other similar obligations arising in the ordinary course of
business;
(d) mechanics', workmen's, repairmen's, warehousemen's,
vendors' or carriers' Liens or other similar Liens arising in the
ordinary course of business and securing sums which are not past
due, or deposits or pledges to obtain the release of any such
Liens;
(e) statutory landlord's Liens under leases to which Group
or any of its Subsidiaries is a party;
(f) any Lien constituting a renewal, extension or
replacement of a Lien constituting a Permitted Lien, but only if
at the time such Lien is granted and immediately after giving
effect thereto, no Default would exist;
(g) leases or subleases granted to other Persons not
materially interfering with the conduct of the business of Group
and its Subsidiaries, taken as a whole;
(h) zoning restrictions, easements, rights of way,
licenses and restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair
the use of such property in the normal operation of the business
of Group or any of its Subsidiaries or the value of such property
for the purpose of such business; and
(i) statutory or common law Liens (such as rights of
set-off) on deposit accounts of Group and its Subsidiaries and
other Liens under the L/C Related Documents.
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pro Rata Share" of any amount means, with respect to any
Revolving Credit Lender at any time, the product of such amount times a
fraction the numerator of which is the amount of such Lender's Revolving
Credit Commitment at such time and the denominator of which is the
Revolving Credit Facility at such time.
"Prospectus" means the Prospectus of Group dated September 19,
1995.
"Redeemable" means, with respect to any capital stock, Debt or
other right or Obligation, any such right or Obligation that (a) the
issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or
(b) is redeemable at the option of the holder.
"Register" has the meaning specified in Section 8.07(g).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Lenders" means, at any time, Lenders owed or holding
more than 51% of the sum of (a) the aggregate principal amount of the
Advances (other than Competitive Bid Advances) outstanding at such time,
(b) the aggregate Available Amount of all Letters of Credit outstanding
at such time and (c) the aggregate unused Commitments under the Term
Facility, if any, plus the aggregate Unused Revolving Credit Commitments
at such time; provided, however, if any Lender shall be a Defaulting
Lender at such time, there shall be excluded from the determination of
Required Lenders at such time (i) the aggregate principal amount of the
Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (ii) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit outstanding at such
time, (iii) the Unused Term Commitment of such Lender at such time and
(iv) the Unused Revolving Credit Commitment of such Lender at such
time. For purposes of this definition, the aggregate principal amount
of Swing Line Advances owing to the Swing Line Bank and of Letter of
Credit Advances owing to any Issuing Bank and the Available Amount of
each Letter of Credit shall be considered to be owed to the Revolving
Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments.
"Revolving Credit Advance" has the meaning specified in Section
2.01(b).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Revolving Credit Lenders pursuant to Section 2.01.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Revolving Credit
Commitment" or, if such Lender has entered into one or more Assignments
and Acceptances, set forth for such Lender in the Register maintained by
the Documentation Agent pursuant to Section 8.07(c) as such Lender's
"Revolving Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.06.
"Revolving Credit Facility" means, at any time, the aggregate
amount of the Revolving Credit Lenders' Revolving Credit Commitments at
such time.
"Revolving Credit Lender" means any Lender that has a Revolving
Credit Commitment.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially
the form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of
the Borrower to such Lender resulting from the Revolving Credit Advances
made by such Lender.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Scotiabank" has the meaning specified in the recital of parties
to this Agreement.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its ERISA Affiliates and no Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at
any time shall be computed as the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Documentary Letter
of Credit.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries. The
term "wholly owned Subsidiary" shall exclude any directors' or officers'
qualifying shares which may be outstanding.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(h)(iii).
"Swing Line Advance" means an advance made by (a) the Swing Line
Bank pursuant to Section 2.01(c), or (b) any Revolving Credit Lender
pursuant to Section 2.02(b).
"Swing Line Bank" means Scotiabank (and its successors and
assigns), provided that Scotiabank (and any such successors and assigns
as Swing Line Bank hereunder) may resign, and thereupon be released from
its obligations, as Swing Line Bank under this Agreement upon receipt by
the Borrower and the Managing Agents, in writing and in a form
reasonably satisfactory to the Borrower and the Managing Agents, of the
assumption by another Revolving Credit Lender of the rights and
obligations of the Swing Line Bank hereunder.
"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section
2.01(c).
"Taxes" has the meaning specified in Section 2.14(a).
"Term Advance" has the meaning specified in Section 2.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Advances of the same Type made by the Term Lenders.
"Term Commitment" means, with respect to any Term Lender at any
time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term Commitment" or, if such Lender has
entered into one or more Assignments and Acceptances, set forth for such
Lender in the Register maintained by the Documentation Agent pursuant to
Section 8.07(c) as such Lender's "Term Commitment", as such amount may
be reduced at or prior to such time pursuant to Section 2.06.
"Term Facility" means, at any time, the aggregate amount of the
Term Lenders' Term Commitments at such time.
"Term Lender" means any Lender that has a Term Commitment.
"Term Note" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of Exhibit A-1
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term Advance made by such Lender.
"Termination Date" means the earlier of October 12, 2000 and the
date of termination in whole of the Commitments pursuant to Section 2.06
or 6.01.
"Total Debt" means, as of the end of any period of four
consecutive Fiscal Quarters, all Indebtedness for Borrowed Money
(including, without limitation, the aggregate outstanding principal
amount of all Advances and loans under other revolving credit facilities
and lines of credit and the like but excluding undrawn letters of credit
and the Trade Credit Facility) of Group and its Subsidiaries, on a
Consolidated basis at such time.
"Trade Credit Facility" means (i) the revolving loan facility
under the Credit Agreement dated as of July 16, 1993 among the Borrower,
certain lenders party thereto and Scotiabank, as agent for said lenders,
and (ii) the revolving loan facility under the Amended and Restated
Credit Agreement dated as of August 31, 1995 among the Borrower, certain
lenders party thereto and Scotiabank, as agent for said lenders, as each
such agreement has been amended to date and the same may be amended,
extended, renewed, refinanced, replaced or otherwise modified from time
to time (provided, however, that the aggregate principal amount of Debt
thereunder shall not exceed $50,000,000 at any time outstanding, or, in
connection with any refinancing thereof, shall not exceed $100,000,000),
used by the Borrower from time to time to extend maturing trade letters
of credit for three months.
"Type" refers to the distinction between Advances bearing interest
at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender at any time,
(a) such Lender's Revolving Credit Commitment at such time
minus
(b) the sum of (i) the aggregate principal amount of all
Revolving Credit Advances, Swing Line Advances and Letter of
Credit Advances made by such Lender and outstanding at such time,
plus (ii) such Lender's Pro Rata Share of (A) the aggregate
Available Amount of all Letters of Credit outstanding at such
time, (B) for all purposes other than for purposes of calculating
commitment fees pursuant to Section 2.09(a), the aggregate amount
of Competitive Bid Advances outstanding at such time, (C) the
aggregate principal amount of all Letter of Credit Advances made
by the Issuing Banks pursuant to Section 2.03(c) and outstanding
at such time other than any such Letter of Credit Advance which,
at or prior to such time, has been assigned in part to such
Revolving Credit Lender pursuant to Section 2.03(c) and other
than, in the case of each Lender that is an Issuing Bank, any such
Letter of Credit Advance in respect of a Letter of Credit issued
by it and (D) for all purposes other than for purposes of
calculating commitment fees pursuant to Section 2.09(a), the
aggregate principal amount of all Swing Line Advances made by the
Swing Line Bank pursuant to Section 2.01(c) and outstanding at
such time other than any such Swing Line Advance which, at or
prior to such time, has been assigned in part to such Revolving
Credit Lender pursuant to Section 2.02(b).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(f)
("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Term Advances. Each Term
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "Term Advance") to the Borrower on the Effective Date
in an amount not to exceed such Lender's Term Commitment at such time. The
Term Borrowing shall consist of Term Advances made simultaneously by the Term
Lenders ratably according to their Term Commitments. Amounts borrowed under
this Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the Effective Date until the
Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Revolving Credit Commitment at such time. Each Revolving
Credit Borrowing shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof (or, if less, an aggregate amount
equal to the amount by which the aggregate amount of a proposed Competitive
Bid Borrowing requested by the Borrower exceeds the aggregate amount of
Competitive Bid Advances offered to be made by the Revolving Credit Lenders
and accepted by the Borrower in respect of such Competitive Bid Borrowing, if
such Competitive Bid Borrowing is made on the same date as such Revolving
Credit Borrowing) and shall consist of Revolving Credit Advances of the same
Type made on the same day by the Revolving Credit Lenders ratably according to
their respective Revolving Credit Commitments. Within the limits of each
Revolving Credit Lender's Unused Revolving Credit Commitment in effect from
time to time, the Borrower may borrow under this Section 2.01(b), prepay
pursuant to Section 2.07(a) and reborrow under this Section 2.01(b).
(c) The Swing Line Advances. The Borrower may request the Swing
Line Bank to make, and the Swing Line Bank shall make, on the terms and
conditions hereinafter set forth, Swing Line Advances to the Borrower from
time to time on any Business Day during the period from the date hereof until
the Termination Date (i) in an aggregate amount not to exceed at any time
outstanding $20,000,000 (the "Swing Line Facility") and (ii) in an amount for
each such Swing Line Borrowing not to exceed the aggregate of the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time. No
Swing Line Advance shall be used for the purpose of funding the payment of
principal of any other Swing Line Advance. Each Swing Line Borrowing shall be
in an amount of $100,000 or an integral multiple of $1,000 in excess thereof
and shall be made as a Base Rate Advance. Within the limits of the Swing Line
Facility and within the limits referred to in clause (ii) above, the Borrower
may borrow under this Section 2.01(c), repay pursuant to Section 2.05(c) or
prepay pursuant to Section 2.07(a) and reborrow under this Section 2.01(c).
(d) Letters of Credit. Each Issuing Bank severally agrees, on
the terms and conditions hereinafter set forth, to issue letters of credit
(together with the Existing Letters of Credit referred to in Section 2.03(e),
the "Letters of Credit") for the account of the Borrower from time to time on
any Business Day during the period from the date hereof until 10 days before
the Termination Date (i) in an aggregate Available Amount for all Letters of
Credit issued by such Issuing Bank not to exceed at any time such Issuing
Bank's Letter of Credit Commitment at such time and (ii) in an Available
Amount for each such Letter of Credit not to exceed the lesser of (x) the
Letter of Credit Facility at such time and (y) an amount equal to the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time. No
Letter of Credit shall have an expiration date (including all rights of the
Borrower or the beneficiary to require renewal) later than the earlier of 30
days before the Termination Date and, in the case of a Documentary Letter of
Credit, 180 days after the date of issuance thereof. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(d), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Sections 2.03(c) and 2.05(d) and request the
issuance of additional Letters of Credit under this Section 2.01(d).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the date of the proposed Borrowing
in the case of a Borrowing consisting of Base Rate Advances, by the Borrower
to the Paying Agent, which shall give to each Appropriate Lender prompt notice
thereof by telecopier or telex. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier or telex in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility
under which such Borrowing is to be made, (iii) Type of Advances comprising
such Borrowing, (iv) aggregate amount of such Borrowing, and (v) in the case
of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period
for each such Advance. Each Appropriate Lender shall, before 12:00 Noon (New
York City time) on the date of such Borrowing, make available for the account
of its Applicable Lending Office to the Paying Agent at the Paying Agent's
Account, in same day funds, such Lender's ratable portion of such Borrowing in
accordance with the respective Commitments under the applicable Facility of
such Lender and the other Appropriate Lenders. After the Paying Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Paying Agent will make such funds available to the
Borrower by crediting the Borrower's Account; provided, however, that, in the
case of any Revolving Credit Borrowing, the Paying Agent shall first make a
portion of such funds equal to the aggregate principal amount of any Swing
Line Advances and Letter of Credit Advances made by the Swing Line Bank or any
Issuing Bank, as the case may be, and by any other Revolving Credit Lender and
outstanding on the date of such Revolving Credit Borrowing, plus interest
accrued and unpaid thereon to and as of such date, available to the Swing Line
Bank or such Issuing Bank, as the case may be, and such other Revolving Credit
Lenders for repayment of such Swing Line Advances and Letter of Credit
Advances.
(b) (i) Each Swing Line Borrowing shall be made on notice,
given not later than 11:30 A.M. (New York City time) on the date of the
proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank and
the Paying Agent. Each such notice of a Swing Line Borrowing (a "Notice of
Swing Line Borrowing") shall be by telephone, confirmed immediately in
writing or telex or telecopier, specifying therein the requested (A) date
of such Borrowing and (B) amount of such Borrowing and shall constitute a
representation and warranty by the Borrower (upon which the Swing Line Bank
may conclusively rely, in the absence of prior receipt by the Swing Line
Bank of written notice from an Agent or Revolving Credit Lenders holding at
least 51% of the Revolving Credit Commitments that the conditions precedent
to the making of Swing Line Advances have not been satisfied or duly
waived). Upon fulfillment of the applicable conditions set forth in
Article III, the Swing Line Bank will make the amount thereof available to
the Borrower by crediting the Borrower's Account.
(ii) (A) (1) Subject to clause (ii)(B) below, in the event that
on any Business Day the Swing Line Bank desires that all or any portion of one
or more Swing Line Advances be paid, the Swing Line Bank shall promptly notify
the Paying Agent to that effect and indicate the portion of the Swing Line
Advances to be paid.
(2) The Paying Agent agrees to promptly transmit to the Lenders
the information contained in each notice received by the Paying Agent under
clause (ii)(A)(1) above, and shall concurrently notify the other Agents and
the Revolving Credit Lenders of each Revolving Credit Lender's Pro Rata Share
of the Swing Line Advances (or portion thereof) to be paid.
(3) Each Revolving Credit Lender hereby unconditionally and
irrevocably agrees to fund to the Paying Agent for the benefit of the Swing
Line Bank, in lawful money of the United States and in same day funds, not
later than 12:00 noon (New York City time) on the Business Day immediately
following the Business Day of such Lender's receipt of such notice from the
Paying Agent (provided that if any Lender shall receive such notice at or
prior to 1:00 P.M. (New York City time) on a Business Day, such funding shall
be made by such Lender on such Business Day), a Revolving Credit Advance in
the amount of such Lender's Pro Rata Share of the payment of the Swing Line
Advances to be made on such date, regardless, however, of whether (x) the
conditions precedent thereto set forth in Article III are then satisfied, (y)
the Borrower has provided a Notice of Borrowing under Section 2.02(a) hereof
and (z) the Revolving Credit Facility has been terminated, any Default or
Event of Default exists or all or any of the Notes have been accelerated, but
subject to clause (B) below and subject to the limitations in respect of the
amount of Revolving Credit Advances contained in Section 2.01(b). The
proceeds of each such Revolving Credit Advance shall be immediately paid over
to the Paying Agent for the benefit of the Swing Line Bank for application to
the Swing Line Facility. Each such Revolving Credit Advance shall initially
be a Base Rate Advance and shall be deemed to be requested by the Borrower
pursuant to Section 2.02(a).
(B) In the event that Commitments of the Lenders shall have
terminated pursuant to Section 6.01 following an Event of Default of the type
described in Section 6.01(f) with respect to Group or the Borrower, no further
Revolving Credit Advances of the type described in clause (ii)(A) above shall
be made, and each of the Revolving Credit Lenders (other than the Swing Line
Bank) shall be deemed to have irrevocably, unconditionally and immediately
purchased from the Swing Line Bank such Revolving Credit Lender's Pro Rata
Share of the principal amount of the Swing Line Advances outstanding as of the
date of the occurrence of such Event of Default. Each Revolving Credit Lender
shall effect such purchase by making available an amount equal to its
participation on the date of such purchase in U.S. dollars in immediately
available funds at the office of the Swing Line Bank located at 600 Peachtree
Street Northeast, Suite 2700, Atlanta, Georgia 30308 or such other office as
the Swing Line Bank may from time to time direct for the account of such
office of the Swing Line Bank.
(C) Each purchase made pursuant to clause (ii)(B) above by a
Revolving Credit Lender shall be made without recourse to the Swing Line Bank,
and, except as to the absence of liens created by the Swing Line Bank on the
Swing Line Advance and the Swing Line Bank's right to effect such sale,
without representation or warranty of any kind, and shall be effected and
evidenced pursuant to documents reasonably acceptable to the Swing Line Bank.
(D) The obligations of the Revolving Credit Lenders under this
Section 2.02(b)(ii) shall be absolute, irrevocable and unconditional, shall be
made under all circumstances and shall not be affected, reduced or impaired
for any reason whatsoever, including (without limitation): (1) any Default,
Event of Default, misrepresentation, negligence, misconduct or other action or
inaction of any kind by any of the Loan Parties or any other Person, whether
in, under or in connection with this Agreement, the Guaranty or any of the
other Loan Documents; (2) any extension, renewal, release or waiver of the
time of performance of or compliance with any of the obligations or other
provisions hereof or of any other Loan Document; (3) any settlement,
compromise or subordination of any or all of the obligations to the claims
of others, or any failure by any Agent, the Swing Line Bank or any other
Lender to mitigate damages; (4) any amendment, modification or other
waiver of any one or more of the Loan Documents; (5) the insolvency,
bankruptcy, reorganization or cessation of existence of any of the Loan
Parties; (6) any impossibility or illegality of performance or the lack of
genuineness, validity, legality or enforceability of any of this Agreement
or the other Loan Documents, or any term thereof or any other agreement or
instrument relating thereto for any reason, or the lack of power or
authority of any party to enter into any of the Loan Documents; (7) any
dispute, setoff, recoupment, counterclaim or other defense or right any
Lender may have at any time, whether against any Agent, the Swing Line
Bank, any other Lender or any of the Loan Parties; (8) any merger or
consolidation of any of the Loan Parties or any Lender, or any sale, lease
or transfer of any or all of the assets of any such Person; or (9) any
other circumstances whether similar or dissimilar to any of the foregoing.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than
$10,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.10, 2.11 or 2.12
and (ii) the Advances under each of the Term Facility and the Revolving Credit
Facility may not be outstanding as part of more than 12 separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing
shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Appropriate Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(e) Unless the Paying Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Paying Agent such Lender's ratable portion of such Borrowing, the Paying
Agent may assume that such Lender has made such portion available to the
Paying Agent on the date of such Borrowing in accordance with subsection (a)
or (b) of this Section 2.02 and the Paying Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Paying Agent, such Lender and the Borrower
severally agree to repay to the Paying Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Paying Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section 2.08 to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Paying Agent such corresponding
amount, such amount so repaid shall constitute such Lender's Advance as part
of such Borrowing for purposes of this Agreement.
(f) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on
the first Business Day prior to the date of the proposed issuance of such
Letter of Credit, by the Borrower to any Issuing Bank, which shall give to the
Paying Agent and each Revolving Credit Lender prompt notice thereof by telex
or telecopier. Each such notice of issuance of a Letter of Credit (a "Notice
of Issuance") shall be by telephone, confirmed immediately in writing, or
telex or telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount of such Letter
of Credit, (C) expiration date of such Letter of Credit, (D) name and address
of the beneficiary of such Letter of Credit and (E) form of such Letter of
Credit, and shall be accompanied by such application and agreement for letter
of credit as such Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If (x) the requested form of such Letter of Credit is acceptable
to such Issuing Bank in its sole discretion and (y) it has not received
written notice from an Agent or Lenders holding at least 51% of the Revolving
Credit Commitments that the conditions to issuing such Letter of Credit have
not been satisfied or duly waived, such Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 8.02 or as
otherwise agreed with the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any Letter of Credit Agreement
shall conflict with this Agreement, the provisions of this Agreement shall
govern.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish
(A) to the Paying Agent, the Documentation Agent and each Revolving Credit
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the preceding
month and drawings during such month under all Letters of Credit issued by
such Issuing Bank and (B) to the Paying Agent, the Documentation Agent and
each Revolving Credit Lender on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available
Amount during the preceding calendar quarter of all Letters of Credit issued
by such Issuing Bank.
(c) Drawing and Reimbursement. The payment by any Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes
of this Agreement the making by such Issuing Bank of a Letter of Credit
Advance, which shall be a Base Rate Advance, in the amount of such draft.
Upon written demand by any Issuing Bank with an outstanding Letter of Credit
Advance, with a copy of such demand to the Paying Agent, each Revolving Credit
Lender shall purchase from such Issuing Bank, and such Issuing Bank shall sell
and assign to each such Revolving Credit Lender, such Lender's Pro Rata Share
of such outstanding Letter of Credit Advance as of the date of such purchase,
by making available for the account of its Applicable Lending Office to the
Paying Agent for the account of such Issuing Bank, by deposit to the Paying
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased
by such Lender. Promptly after receipt thereof, the Paying Agent shall
transfer such funds to such Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Revolving Credit Lender agrees to purchase its
Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business
Day on which demand therefor is made by the Issuing Bank, provided notice of
such demand is given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by
any Issuing Bank to any other Revolving Credit Lender of a portion of a Letter
of Credit Advance, such Issuing Bank represents and warrants to such other
Lender that such Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, free and clear of any liens, but makes no other
representation or warranty and assumes no responsibility with respect to such
Letter of Credit Advance, the Loan Documents or any Loan Party. If and to the
extent that any Revolving Credit Lender shall not have so made the amount of
such Letter of Credit Advance available to the Paying Agent, such Revolving
Credit Lender agrees to pay to the Paying Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
such Issuing Bank until the date such amount is paid to the Paying Agent, at
the Federal Funds Rate for its account or the account of such Issuing Bank, as
applicable. If such Lender shall pay to the Paying Agent such amount for the
account of such Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
(e) Existing Letters of Credit. Effective as of the Effective
Date, (i) the "Letters of Credit" issued for the account of the Borrower by
Societe Generale pursuant to the Existing Credit Agreement (such Letters of
Credit as are outstanding thereunder on the date hereof and set forth on
Schedule 2.03(e) hereto being the "Existing Letters of Credit") will be deemed
to be Letters of Credit hereunder and (ii) the Existing Letters of Credit will
no longer be Obligations outstanding under the Existing Credit Agreement.
SECTION 2.04. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may make Competitive Bid Borrowings under
this Section 2.04 from time to time on any Business Day during the period from
the date hereof until the date occurring 10 days prior to the Termination Date
in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances (other than
Term Advances) then outstanding shall not exceed the aggregate amount of the
Revolving Credit Commitments of the Lenders.
(i) The Borrower may request a Competitive Bid Borrowing under
this Section 2.04 by delivering to the Competitive Bid Agent, by
telecopier or telex, a notice of a Competitive Bid Borrowing (a
"Notice of Competitive Bid Borrowing"), in substantially the form of
Exhibit B-2 hereto, specifying therein the requested (v) date of such
proposed Competitive Bid Borrowing, (w) aggregate amount of such
proposed Competitive Bid Borrowing, (x) in the case of a Competitive
Bid Borrowing consisting of LIBO Rate Advances, Interest Period, or
in the case of a Competitive Bid Borrowing consisting of Fixed Rate
Advances, maturity date for repayment of each Fixed Rate Advance to
be made as part of such Competitive Bid Borrowing (which maturity
date may not be earlier than the date occurring 7 days after the date
of such Competitive Bid Borrowing or later than the earlier of (I)
180 days after the date of such Competitive Bid Borrowing and (II)
the Termination Date), (y) interest payment date or dates relating
thereto, and (z) other terms (if any) to be applicable to such
Competitive Bid Borrowing, not later than 10:00 A.M. (New York City
time) (A) at least four Business Days prior to the date of the
proposed Competitive Bid Borrowing, if the Borrower shall specify in
the Notice of Competitive Bid Borrowing that the rates of interest to
be offered by the Lenders shall be fixed rates per annum (the
Advances comprising any such Competitive Bid Borrowing being referred
to herein as "Fixed Rate Advances") and (B) at least four Business
Days prior to the date of the proposed Competitive Bid Borrowing, if
the Borrower shall instead specify in the Notice of Competitive Bid
Borrowing that the rates of interest be offered by the Lenders are to
be based on the LIBO Rate (the Advances comprising such Competitive
Bid Borrowing being referred to herein as "LIBO Rate Advances").
Each Notice of Competitive Bid Borrowing shall be irrevocable and
binding on the Borrower. The Competitive Bid Agent shall in turn
promptly notify each Lender of each request for a Competitive Bid
Borrowing received by it from the Borrower by sending such Lender a
copy of the related Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more Competitive Bid Advances to
the Borrower as part of such proposed Competitive Bid Borrowing at a
rate or rates of interest specified by such Lender in its sole
discretion, by notifying the Competitive Bid Agent (which shall give
prompt notice thereof to the Borrower), before 10:00 A.M. (New York City
time) on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances
and three Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of LIBO
Rate Advances, of the minimum amount and maximum amount of each
Competitive Bid Advance which such Lender would be willing to make as
part of such proposed Competitive Bid Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section 2.04(a),
exceed such Lender's Revolving Credit Commitment, if any), the rate or
rates of interest therefor and such Lender's Applicable Lending Office
with respect to such Competitive Bid Advance; provided that if the
Paying Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Borrower of such offer
before 9:00 A.M. (New York City time) on the date on which notice of
such election is to be given to the Paying Agent by the other Lenders.
If any Lender shall elect not to make such an offer, such Lender
shall so notify the Competitive Bid Agent, before 10:00 A.M. (New
York City time) on the date on which notice of such election is to be
given to the Paying Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any Competitive Bid Advance
as part of such Competitive Bid Borrowing; provided that the failure
by any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Advance as part of such
proposed Competitive Bid Borrowing.
(iii) The Borrower shall, in turn, before 11:00 A.M. (New York
City time) on the date of such proposed Competitive Bid Borrowing in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances,
and before 1:00 P.M. (New York City time) three Business Days before the
date of such proposed Competitive Bid Borrowing in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances, either:
(x) cancel such Competitive Bid Borrowing by giving the
Competitive Bid Agent notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion,
by giving notice to the Paying Agent of the amount of each
Competitive Bid Advance (which amount shall be equal to or greater
than the minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Competitive Bid Agent on
behalf of such Lender for such Competitive Bid Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of such
Competitive Bid Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by giving the Competitive
Bid Agent notice to that effect. The Borrower shall accept the
offers made by any Lender or Lenders to make Competitive Bid
Advances in order of the lowest to the highest rates of interest
offered by such Lenders. If two or more Lenders have offered the
same interest rate, the amount to be borrowed at such interest
rate will be allocated by the Paying Agent among such Lenders in
proportion to the maximum amount that each such Lender offered at
such interest rate.
(iv) If the Borrower notifies the Competitive Bid Agent that such
Competitive Bid Borrowing is cancelled pursuant to paragraph (iii)(x)
above, the Competitive Bid Agent shall give prompt notice thereof to the
Lenders and such Competitive Bid Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y) above, the
Competitive Bid Agent shall in turn promptly notify (A) each Lender that
has made an offer as described in paragraph (ii) above, of the date and
aggregate amount of such Competitive Bid Borrowing and whether or not
any offer or offers made by such Lender pursuant to paragraph (ii) above
have been accepted by the Borrower, (B) each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing, of
the amount of each Competitive Bid Advance to be made by such Lender
as part of such Competitive Bid Borrowing, and (C) each Lender that
is to make a Competitive Bid Advance as part of such Competitive Bid
Borrowing, upon receipt, that the Competitive Bid Agent has received
forms of documents, if any, requested pursuant to Section 3.02(b).
Each Lender that is to make a Competitive Bid Advance as part of such
Competitive Bid Borrowing shall, before 12:00 noon (New York City
time) on the date of such Competitive Bid Borrowing specified in the
notice received from the Competitive Bid Agent pursuant to clause (A)
of the preceding sentence or any later time when such Lender shall
have received notice from the Competitive Bid Agent pursuant to
clause (C) of the preceding sentence, make available for the account
of its Applicable Lending Office to the Competitive Bid Agent at the
Competitive Bid Agent's Account, in same day funds, such Lender's
portion of such Competitive Bid Borrowing. Upon fulfillment of the
applicable conditions set forth in Article III and after receipt by
the Competitive Bid Agent of such funds, the Competitive Bid Agent
will, as promptly as possible, transfer such funds to the Borrower's
Account. Promptly after each Competitive Bid Borrowing, the
Competitive Bid Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent deemed use of the aggregate
amount of the Commitments as a result thereof and the dates upon
which such Competitive Bid Borrowing commenced and will terminate.
(vi) If the Borrower notifies the Competitive Bid Agent that it
accepts one or more of the offers made by any Lender or Lenders pursuant
to paragraph (iii)(y) above, such notice of acceptance shall be
irrevocable and binding on the Borrower. The Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as
a result of any failure to fulfill on or before the date specified in
the related Notice of Competitive Bid Borrowing for such Competitive Bid
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Competitive
Bid Advance to be made by such Lender as part of such Competitive Bid
Borrowing when such Competitive Bid Advance, as a result of such
failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each Competitive Bid Borrowing, the Borrower
shall be in compliance with the limitation set forth in the proviso to the
first sentence of subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.04, the Borrower may from time to time borrow under this Section
2.04, repay or prepay pursuant to subsection (d) below, and reborrow under
this Section 2.04, provided that a Competitive Bid Borrowing shall not be made
within three Business Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Competitive Bid Agent for
the account of each Lender that has made a Competitive Bid Advance, on the
maturity date of each Competitive Bid Advance (such maturity date being that
specified by the Borrower for repayment of such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to subsection
(a)(i) above and provided in the Competitive Bid Note evidencing such
Competitive Bid Advance), the then unpaid principal amount of such Competitive
Bid Advance. The Borrower shall have no right to prepay any principal amount
of any Competitive Bid Advance unless, and then only on the terms, specified
by the Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above, or
unless separately agreed between the Borrower and any Lender that has made a
Competitive Bid Advance, and set forth in the Competitive Bid Note evidencing
such Competitive Bid Advance.
(e) The Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the date of such Competitive Bid
Advance to the date the principal amount of such Competitive Bid Advance is
repaid in full, at the rate of interest for such Competitive Bid Advance
specified by the Lender making such Competitive Bid Advance in its notice with
respect thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by the Borrower for such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing delivered
pursuant to subsection (a)(i) above, as provided in the Competitive Bid Note
evidencing such Competitive Bid Advance. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on the
amount of unpaid principal of and interest on each Competitive Bid Advance
owing to a Lender, payable in arrears on the date or dates interest is payable
thereon, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Competitive Bid Advance under the terms
of the Competitive Bid Note evidencing such Competitive Bid Advance unless
otherwise agreed in such Competitive Bid Note.
(f) The indebtedness of the Borrower resulting from each
Competitive Bid Advance made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of the
Borrower payable to the order of the Lender making such Competitive Bid
Advance.
(g) Upon delivery of each Notice of Competitive Bid Borrowing,
the Borrower shall pay a non-refundable fee of $2,000 to the Competitive Bid
Agent for its own account.
SECTION 2.05. Repayment of Advances. (a) Term Advances. The
Borrower shall repay to the Paying Agent for the ratable account of the Term
Lenders the aggregate outstanding principal amount of the Term Advances on the
following dates in the amounts indicated (which amounts shall be reduced as a
result of the application of prepayments in accordance with the order of
priority set forth in Section 2.07):
Date Amount
---- ------
June 30, 1996 $6,250,000
December 31, 1996 $18,750,000
June 30, 1997 $8,750,000
December 31, 1997 $26,250,000
June 30, 1998 $10,000,000
December 31, 1998 $30,000,000
June 30, 1999 $12,500,000
December 31, 1999 $37,500,000
June 30, 2000 $12,500,000
October 12, 2000 $37,500,000
provided, however, that the final principal installment shall be repaid on the
earlier of the stated date and the Termination Date and in any event shall be
in an amount equal to the aggregate principal amount of the Term Advances
outstanding on such date.
(b) Revolving Credit Advances. The Borrower shall repay to the
Paying Agent for the ratable account of the Revolving Credit Lenders on the
Termination Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.
(c) Swing Line Advances. The Borrower shall repay to the Paying
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has purchased a Swing Line Advance pursuant to Section 2.02(b) the
outstanding principal amount of each Swing Line Advance at the times and in
the manner and amounts specified in Section 2.02(b) and on the Termination
Date.
(d) Letter of Credit Advances. (i) The Borrower shall repay to
the Paying Agent for the account of each Issuing Bank and each other Revolving
Credit Lender that has made a Letter of Credit Advance on the earlier of
demand and the Termination Date the outstanding principal amount of each
Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document,
any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (all of the foregoing being,
collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower
in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C
Related Documents;
(C) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(E) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from
the Guaranties or any other guaranty, for all or any of the Obligations
of the Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Borrower or a guarantor.
SECTION 2.06. Termination or Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days'
notice to the Paying Agent, to terminate in whole or reduce ratably in part
the unused portions of the respective Commitments of the Lenders, provided
that each partial reduction (i) shall be in the aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
shall be made ratably among the Appropriate Lenders in accordance with
their Commitments with respect to such Facility, and provided further that
after giving effect to any such reduction the Letter of Credit Commitments
shall be less than or equal to the Revolving Credit Commitments, and
provided still further that the aggregate amount of the Commitments of the
Lenders shall not be reduced to an amount that is less than the aggregate
principal amount of the Competitive Bid Advances then outstanding.
SECTION 2.07. Prepayments. (a) Optional Prepayments. (i)
The Borrower may, upon at least one Business Day's notice in the case
of the Swing Line Facility and Base Rate Advances under the Revolving
Credit Facility and three Business Days' notice in the case of any
Term Advances and any Eurodollar Rate Advances, in each case to the
Paying Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given the Borrower shall,
prepay the outstanding aggregate principal amount of the Advances
comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (x) each
partial prepayment of the Term Facility shall be in an aggregate
principal amount of $10,000,000 or an integral multiple of $5,000,000
in excess thereof, (y) each partial prepayment of the Revolving
Credit Facility shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $1,000,000 in excess thereof
and (z) no such prepayment of a Eurodollar Rate Advance shall be made
other than on the last day of an Interest Period therefor. Each such
prepayment of any Term Advances shall be applied to the installments
thereof in inverse order of maturity.
(ii) Competitive Bid Advances may be prepaid only in accordance
with the provisions of Section 2.04(d).
(b) Mandatory Prepayments. (i) The Borrower shall, on each
Business Day, prepay an aggregate principal amount of the Revolving
Credit Advances comprising part of the same Borrowings, the Letter of
Credit Advances and the Swing Line Advances equal to the amount by which
(A) the sum of the aggregate principal amount of (x) the Revolving
Credit Advances, (y) the Letter of Credit Advances and (z) the Swing
Line Advances then outstanding plus the aggregate Available Amount of
all Letters of Credit then outstanding exceeds (B) the Revolving Credit
Facility on such Business Day.
(ii) The Borrower shall, on each Business Day, pay to the Paying
Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to
equal the amount by which the aggregate Available Amount of all Letters
of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.
SECTION 2.08. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to
each Lender from the date of such Advance until such principal amount shall be
paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(x) the Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
first day of each January, April, July and October during such periods.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x) the
Eurodollar Rate for such Interest Period for such Advance plus (y) the
Applicable Margin in effect from time to time, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest
Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender (except as otherwise
provided in Section 2.04(e)), payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2%
per annum above the rate per annum required to be paid on such Advance
pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base
Rate Advances pursuant to clause (a)(i) above.
SECTION 2.09. Fees. (a) Commitment Fee. The Borrower shall pay
to the Paying Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender until the Termination Date, payable
quarterly on the first Business Day of each January, April, July and October,
commencing January 1, 1996, and on the Termination Date, at the rate per annum
equal to the Applicable Percentage in effect from time to time on the average
daily Unused Revolving Credit Commitment of such Lender; provided, however,
(i) that any commitment fee accrued with respect to any of the Commitments of
a Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time and (ii) that no commitment fee shall accrue on any of
the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to
the Paying Agent for the account of each Revolving Credit Lender a commission,
payable in arrears quarterly on the first Business Day of each January, April,
July and October, commencing January 1, 1996, and on the earliest to occur of
the full drawing, expiration, termination or cancellation of any such Letter
of Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter at a rate per
annum determined by reference to the Implied Senior Rating in effect from time
to time as set forth below:
Implied Senior Standby Letters of
Rating Credit Trade Letters of Credit
-------------- ------------------ -----------------------
BB+ or below 0.875% 0.625%
BBB- 0.500% 0.450%
BBB 0.425% 0.375%
BBB+ 0.375% 0.375%
A- or above 0.300% 0.300%
The Letter of Credit fees shall be determined by reference to the Implied
Senior Rating in effect from time to time, provided, however, that no change
in the letter of credit fees shall be effective until three Business Days
after the date on which the Managing Agents receive evidence reasonably
satisfactory to them that a new Implied Senior Rating is in effect; provided
further, that if no Implied Senior Rating is then in effect, the letter of
credit fees shall be 0.875% for Standby Letters of Credit and 0.625% for Trade
Letters of Credit. Notwithstanding the foregoing, until the six-month
anniversary of the Effective Date, the Letter of Credit Fees shall be 0.425%
for Standby Letters of Credit and 0.375% for Trade Letters of Credit.
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and
other fees and charges in connection with the issuance or administration of
each Letter of Credit as the Borrower and such Issuing Bank shall agree.
(c) Agent's Fees. The Borrower shall pay to each of the Agents
for its own account such fees as may from time to time be agreed between the
Borrower and such Agent.
SECTION 2.10. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Paying Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.10, 2.11 and 2.12, Convert all Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c) and no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c). Each such notice of a Conversion shall,
within the restrictions specified above, specify (i) the date of such
Conversion, (ii) the Advances to be Converted, and (iii) if such Conversion is
into Eurodollar Rate Advances, the duration of the initial Interest Period for
each such Advance. Each notice of Conversion shall be irrevocable and binding
on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $10,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01,
the Paying Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost (other than in taxes,
including interest, additions to tax and penalties relating thereto, except
to the extent that the same are required to be paid pursuant to Section 2.14
hereof) to any Lender Party of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances or LIBO Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding for purposes of
this Section 2.11 any such increased costs resulting from (i) Taxes, Other
Taxes, Excluded Taxes or taxes excluded from the definitions of Taxes or Other
Taxes in Section 2.14(e) or from indemnification pursuant to Section 2.14(f)
(as to which Section 2.14 shall govern) and (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such
Lender Party (with a copy of such demand to the Paying Agent), pay to the
Paying Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost; provided,
however, that, before making any such demand, each Lender Party agrees to use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of
such Lender Party, be otherwise disadvantageous to such Lender Party. A
certificate as to the amount of such increased cost, submitted to the Borrower
by such Lender Party, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender Party determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender Party or any corporation controlling such Lender Party and that
the amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters
of Credit (or similar contingent obligations), then, upon demand by such
Lender Party (with a copy of such demand to the Paying Agent), the Borrower
shall pay to the Paying Agent for the account of such Lender Party, from time
to time as specified by such Lender Party, additional amounts sufficient to
compensate such Lender Party in the light of such circumstances, to the extent
that such Lender Party reasonably determines such increase in capital to be
allocable to the existence of such Lender Party's commitment to lend or to
issue Letters of Credit hereunder or to the issuance or maintenance of any
Letters of Credit. A certificate as to such amounts submitted to the Borrower
by such Lender Party shall be conclusive and binding for all purposes, absent
manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed at least a majority of the then aggregate unpaid
principal amount thereof notify the Paying Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost
(excluding for purposes of this Section 2.11 any such increased costs
resulting from (i) Taxes, Other Taxes, Excluded Taxes or taxes excluded from
the definitions of Taxes or Other Taxes in Section 2.14(e) or from
indemnification pursuant to Section 2.14(f) (as to which Section 2.14 shall
govern) and (ii) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender Party is organized or has its
Applicable Lending Office or any political subdivision thereof) to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Paying Agent shall forthwith so notify the Borrower
and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance
under any Facility will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Paying Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
SECTION 2.12. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Paying Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or LIBO Rate Advances or to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, (i) each Eurodollar Rate Advance or LIBO Rate
Advance, as the case may be, will automatically, upon such demand, Convert
into a Base Rate Advance and (ii) the obligation of the Lenders to make
Eurodollar Rate Advances or LIBO Rate Advances or to Convert Revolving Credit
Advances into Eurodollar Rate Advances shall be suspended until the Paying
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of counterclaim
or set-off (except as otherwise provided in Section 2.15), not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Paying Agent at the Paying Agent's Account in same day funds. The Paying
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or commitment fees ratably (other than
amounts payable pursuant to Section 2.04, 2.11, 2.14 or 8.04(c)) to the
Lenders for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(c), from and after
the effective date specified in such Assignment and Acceptance, the Paying
Agent shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in
such payments for periods prior to such effective date directly between
themselves.
(b) If the Paying Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner
in which, such funds are to be applied, the Paying Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal
amount of all outstanding Advances and the Available Amount of all Letters of
Credit then outstanding, in repayment or prepayment of such of the outstanding
Advances or other Obligations owed to such Lender Party, and for application
to such principal installments, as the Paying Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time against any or all of
the Borrower's accounts with such Lender any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Paying Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or
commitment fees are payable. Each determination by the Paying Agent of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or commitment
fee, as the case may be; provided, however, that, if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances or LIBO
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(f) Unless the Paying Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the Paying
Agent may assume that the Borrower has made such payment in full to the Paying
Agent on such date and the Paying Agent may, in reliance upon such assumption,
cause to be distributed to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have
so made such payment in full to the Paying Agent, each Lender shall repay to
the Paying Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to
the Paying Agent, at the Federal Funds Rate.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party
and each Agent, Excluded Taxes (all such non-Excluded Taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under any Note to any
Lender Party or any Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
such Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The Borrower will indemnify each Lender Party and each Agent
for the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.14) paid by such Lender Party or such Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
30 days from the date such Lender Party or such Agent (as the case may be)
makes written demand therefor, including in such demand an identification of
the Taxes or Other Taxes (together with the amounts thereof) with respect to
which such indemnification is being sought.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Paying Agent and the Documentation Agent, at
their respective addresses referred to in Section 8.02, the original or a
certified copy of a receipt evidencing payment thereof. In the case of any
payment hereunder or under the Notes by or on behalf of the Borrower through
an account or branch outside the United States or on behalf of the Borrower by
a payor that is not a United States person, if the Borrower determines that no
Taxes are payable in respect thereof, the Borrower shall furnish, or shall
cause such payor to furnish, to the Paying Agent and the Documentation Agent,
at such address, an opinion of counsel acceptable to the Paying Agent stating
that such payment is exempt from Taxes. For purposes of this subsection (d)
and subsection (e), the terms "United States" and "United States person" shall
have the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each initial Lender or initial
Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each
other Lender Party, and from time to time thereafter if requested in writing
by the Borrower (but only so long as such Lender remains lawfully able to do
so), shall provide the Borrower with two original Internal Revenue Service
forms 1001, 4224 or W-8 as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender Party
is exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes. If any Lender Party
which is not a "United States person" determines that it is unable to submit
to the Borrower or the Documentation Agent any form or certificate that such
Lender is otherwise required to submit pursuant to this Section 2.14, or that
it is required to withdraw or cancel any such form or certificate, or that any
such form or certificate previously submitted has otherwise become ineffective
or inaccurate, such Lender shall promptly notify the Borrower and the
Documentation Agent of such fact. In addition, if a Lender provides a form
W-8 (or any successor or related form) to the Documentation Agent and the
Borrower pursuant to this Section 2.14, such Lender shall also provide a
certificate stating that such Lender is not a "bank" within the meaning of
section 881(c)(3)(A) of the Internal Revenue Code of 1986 and shall promptly
notify the Documentation Agent and the Borrower if such Lender determines that
it is no longer able to provide such certification. If the form provided by a
Lender Party at the time such Lender Party first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate form certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such form;
provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement, the Lender
Party assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include (in addition to withholding
taxes that may be imposed in the future or other amounts otherwise includable
in Taxes) United States withholding tax, if any, applicable with respect to
the Lender assignee on such date. Upon the reasonable request of the Borrower
or the Documentation Agent, each Lender Party that has not provided the forms
or other documents, as provided above, on the basis of being a United States
person shall submit to the Borrower and the Documentation Agent a certificate
to the effect that it is such a "United States person" (as defined in Section
7701(a)(30) of the Internal Revenue Code).
(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form described in Section
2.14(e) (other than if such failure is due to a change in law occurring
subsequent to the date on which such Lender became a Lender Party hereunder,
or if such form otherwise is not required under the first sentence of
subsection (e) above because the Borrower has not requested in writing such
form subsequent to the date on which such Lender Party became a Lender Party
hereunder), such Lender Party shall not be entitled to indemnification under
Section 2.14(a) or (c) with respect to Taxes imposed by the United States;
provided, however, that should a Lender Party become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as the Lender Party shall reasonably request to assist the Lender
Party to recover such Taxes.
(g) Any Lender Party or Agent claiming any additional amounts
payable pursuant to this Section 2.14 shall use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
(h) Within 60 days after the written request of the Borrower,
each Lender Party or Agent shall execute and deliver to the Borrower such
certificates or forms as are reasonably requested by the Borrower in such
request, which can be furnished consistent with the facts and which are
reasonably necessary to assist the Borrower in applying for refunds of Taxes
paid by the Borrower hereunder or making payment of Taxes hereunder; provided,
however, that no Lender Party or Agent shall be required to furnish to the
Borrower and financial or other information which it considers confidential.
The cost of preparing any materials referred to in the previous sentence shall
be borne by the Borrower. If a Lender Party or Agent determines in good faith
that it has received a refund of any Taxes or Other Taxes with respect to
which Borrower has made a payment of additional amounts, such Lender Party or
Agent shall pay to the Borrower an amount that such Lender Party or Agent
determines in good faith to be equal to the net benefit, after tax, that was
obtained by such Lender Party or Agent (as the case may be) as a consequence
of such refund.
SECTION 2.15. Sharing of Payments, Etc. If any Lender Party
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of Obligations owing to it
(other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its
ratable share of payments on account of the Obligations obtained by all the
Lender Parties, such Lender Party shall forthwith purchase from the other
Lender Parties such participations in Obligations owing to them as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender Party,
such purchase from each Lender Party shall be rescinded and such Lender Party
shall repay to the purchasing Lender Party the purchase price to the extent of
such recovery together with an amount equal to such Lender Party's ratable
share (according to the proportion of (i) the amount of such Lender Party's
required repayment to (ii) the total amount so recovered from the purchasing
Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.15 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such participation.
SECTION 2.16. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely to refinance amounts outstanding under the Existing Credit Agreement,
to provide working capital for the Borrower and for general corporate purposes
of the Borrower and its Subsidiaries.
SECTION 2.17. Defaulting Lenders. (a) In the event that, at any
one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the
Borrower may, so long as no Default shall occur or be continuing at such
time and to the fullest extent permitted by applicable law, set off and
otherwise apply the Obligation of the Borrower to make such payment to or
for the account of such Defaulting Lender against the Obligation of such
Defaulting Lender to make such Defaulted Advance. In the event that, on
any date, the Borrower shall so set off and otherwise apply its Obligation
to make any such payment against the Obligation of such Defaulting Lender
to make any such Defaulted Advance on or prior to such date, the amount so
set off and otherwise applied by the Borrower shall constitute for all
purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on the date under the Facility pursuant to which
such Defaulted Advance was originally required to have been made pursuant
to Section 2.01. Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other
Advances comprising such Borrowing shall be Eurodollar Rate Advances on the
date such Advance is deemed to be made pursuant to this subsection (a).
The Borrower shall notify the Paying Agent at any time the Borrower
exercises its right of set-off pursuant to this subsection (a) and shall
set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (B) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise
required to be made by the Borrower to or for the account of such
Defaulting Lender which is paid by the Borrower, after giving effect to the
amount set off and otherwise applied by the Borrower pursuant to this
subsection (a), shall be applied by the Paying Agent as specified in
subsection (b) or (c) of this Section 2.17.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to any Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Paying Agent for the account of such Defaulting Lender, then the Paying
Agent may, on its behalf or on behalf of such other Lender Parties and to the
fullest extent permitted by applicable law, apply at such time the amount so
paid by the Borrower to or for the account of such Defaulting Lender to the
payment of each such Defaulted Amount to the extent required to pay such
Defaulted Amount. In the event that the Paying Agent shall so apply any such
amount to the payment of any such Defaulted Amount on any date, the amount so
applied by the Paying Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Paying Agent
shall be retained by the Paying Agent or distributed by the Paying Agent to
such other Lender Parties, ratably in accordance with the respective portions
of such Defaulted Amounts payable at such time to the Paying Agent and such
other Lender Parties and, if the amount of such payment made by the Borrower
shall at such time be insufficient to pay all Defaulted Amounts owing at such
time to the Paying Agent and the other Lender Parties, in the following order
of priority:
(i) first, to the Agents for any Defaulted Amount then owing to
the Agents; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Paying Agent pursuant to this subsection (b), shall be applied by the Paying
Agent as specified in subsection (c) of this Section 2.17.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, any Agent or
any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower or such other Lender Party shall pay such
amount to the Paying Agent to be held by the Paying Agent, to the fullest
extent permitted by applicable law, in escrow or the Paying Agent shall, to
the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Paying Agent in escrow under this
subsection (c) shall be deposited by the Paying Agent in an account with the
Paying Agent, in the name and under the control of the Paying Agent, but
subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the
credit balance of such account from time to time, shall be the Paying Agent's
standard terms applicable to escrow accounts maintained with it. Any interest
credited to such account from time to time shall be held by the Paying Agent
in escrow under, and applied by the Paying Agent from time to time in
accordance with the provisions of, this subsection (c). The Paying Agent
shall, to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to any
Agent or any other Lender Party, as and when such Advances or amounts are
required to be made or paid and, if the amount so held in escrow shall at any
time be insufficient to make and pay all such Advances and amounts required to
be made or paid at such time, in the following order of priority:
(i) first, to the Agents for any amount then due and payable by
such Defaulting Lender to the Agents hereunder;
(ii) second, to any other Lender Parties for any amount then due
and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Paying Agent in
escrow at such time with respect to such Lender Party shall be distributed by
the Paying Agent to such Lender Party and applied by such Lender Party to the
Obligations owing to such Lender Party at such time under this Agreement and
the other Loan Documents ratably in accordance with the respective amounts of
such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.17 are in addition to other rights and remedies that the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and that any Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections
2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become
effective on and as of the first date (the "Effective Date") on which the
following conditions precedent have been satisfied:
(a) The Lender Parties shall be satisfied with (1) the final
terms and conditions of the transactions contemplated hereby, including,
without limitation, all legal and tax aspects thereof, and (ii) the
corporate and legal structure and capitalization of each Loan Party,
including, without limitation, the terms and conditions of the charter,
bylaws and each class of capital stock of each Loan Party and of each
agreement or instrument relating to such structure or capitalization.
(b) The Lender Parties shall be satisfied that all obligations
of the Borrower under the Existing Credit Agreement, whether for
principal, interest, fees, expenses or otherwise, have been or,
concurrently with the making of the initial Borrowing, will be paid in
full in cash, all "Commitments" (as defined therein) terminated and all
Liens securing such Obligations released.
(c) The Lender Parties shall be satisfied with the price per
share and the number of shares issued and all other legal and tax
aspects of the equity offering by Group of shares of its common stock
(the "Equity Offering"); the Equity Offering shall have been consummated
and Group shall have received at least $140,000,000 in net cash proceeds
therefrom.
(d) There shall have occurred no Material Adverse Change since
January 7, 1995 and all information provided by or on behalf of the
Borrower to the Lenders prior to the delivery of their commitments shall
be true and correct in all material aspects.
(e) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lender Parties) and shall remain in effect, all
applicable waiting periods shall have expired without any action being
taken by any competent authority and no law or regulation shall be
applicable in the reasonable judgment of the Lender Parties that
restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby.
(f) The Borrower shall have paid all accrued fees and expenses
of the Managing Agents and the Lender Parties (including the accrued
fees and expenses of counsel to the Agents).
(g) On the Effective Date, the following statements shall be
true and the Documentation Agent shall have received for the account of
each Lender a certificate signed by a duly authorized officer of the
Borrower, dated the Effective Date, stating that:
(i) The representations and warranties contained in each
Loan Document are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Documentation Agent shall have received on or before the
Effective Date the following, each dated such day, in form and substance
satisfactory to the Documentation Agent and (except for the Notes) in
sufficient copies for each Lender Party:
(i) The Notes to the order of the Lenders, respectively.
(ii) A guaranty in substantially the form of Exhibit F (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Group Guaranty"), duly executed by
Group.
(iii) A guaranty in substantially the form of Exhibit G
(together with each other guaranty delivered pursuant to Section
5.01(k), in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Subsidiary Guaranty"), duly executed by the Guarantors (other
than Group).
(iv) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving this
Agreement, the Notes and each other Loan Document to which it is
or is to be a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Notes and each other Loan
Document.
(v) A copy of a certificate of the Secretary of State of
the jurisdiction of incorporation of each Loan Party, dated
reasonably near the date of the initial Borrowing, listing the
charter of such Loan Party and each amendment thereto on file in
his office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter on file in his office, (B)
such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in
good standing under the laws of such jurisdiction.
(vi) A certificate of the Borrower and each other Loan
Party, signed on behalf of the Borrower and such other Loan Party
by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the date of the initial Borrowing (the
statements made in which certificate shall be true on and as of
the date of the initial Borrowing), certifying as to (A) the
absence of any amendments to the charter of the Borrower or such
other Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.01(h)(v), (B) a true and
correct copy of the bylaws of the Borrower and such other Loan
Party as in effect on the date of the initial Borrowing and (C)
the due incorporation and good standing of the Borrower and such
other Loan Party as a corporation organized under the laws of the
applicable jurisdiction, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such other Loan
Party.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying the
names and true signatures of the officers of the Borrower and such
other Loan Party authorized to sign this Agreement, each other
Loan Document to which they are or are to be parties and the other
documents to be delivered hereunder and thereunder.
(viii)Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender
Parties shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under ERISA and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, annual financial statements dated January 7, 1995,
interim financial statements dated the end of the most recent
fiscal quarter for which financial statements are available (or,
in the event the Lender Parties' due diligence review reveals
material changes since such financial statements, as of a later
date within 45 days of the day of the initial Borrowing), pro
forma financial statements and forecasts prepared by management of
the Borrower, in form and substance satisfactory to the Lender
Parties, of balance sheets, of operations and stockholders' equity
(deficit) and statements of cash flow on a monthly basis for the
first year following the day of the initial Borrowing and on an
annual basis for each year thereafter until the Termination Date.
(ix) A favorable opinion of Skadden, Arps, Slate, Meagher &
Flom, counsel for the Loan Parties, in substantially the form of
Exhibit E hereto and as to such other matters as any Lender Party
through the Managing Agents may reasonably request.
(x) A favorable opinion of Shearman & Sterling, counsel
for the Managing Agents, in form and substance satisfactory to the
Managing Agents.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Appropriate Lender to make an Advance
(other than a Letter of Credit Advance and other than a Swing Line Advance
made by a Revolving Credit Lender pursuant to Section 2.02(b)) on the
occasion of each Borrowing (including the initial Borrowing), and the
obligation of each Issuing Bank to issue a Letter of Credit (including the
initial issuance) and the right of the Borrower to request a Swing Line
Borrowing, shall be subject to the further conditions precedent that on the
date of such Borrowing or issuance:
(a) the following statements shall be true (and each of the
giving of the applicable Notice of Borrowing, Notice of Swing Line
Borrowing or Notice of Issuance and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall
constitute a representation and warranty by the Borrower that on the
date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of
the date of such Borrowing or issuance, before and after giving
effect to such Borrowing or issuance and to the application of the
proceeds therefrom, as though made on and as of such date other
than any such representations or warranties that, by their terms,
refer to a specific date other than the date of such Borrowing or
issuance, in which case such representations and warranties shall
be correct as of such specific date, and
(ii) no event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes a Default; and
(b) the Documentation Agent shall have received such other
approvals or documents, if any, as any Appropriate Lender through the
Documentation Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in Section
3.01, each Lender Party shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory
to the Lender Parties unless an officer of the Documentation Agent
responsible for the transactions contemplated by Loan Documents shall have
received notice from such Lender Party prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date,
specifying its objection thereto. The Paying Agent shall promptly notify
the Lender Parties of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
Each of Group and the Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed
to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. Each such Subsidiary (i) is a
corporation duly organized or a limited liability corporation duly
formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify
or be licensed would not have a Material Adverse Effect and (iii) has
all requisite corporate power and authority to own or lease and operate
its properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes and each other Loan Document to which it is
or is to be a party, and the consummation of the transactions
contemplated hereby, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or by-laws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and
the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) result in or require the creation or imposition of
any Lien upon or with respect to any of the properties of any Loan Party
or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is or would be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery,
recordation, filing or performance by any Loan Party of this Agreement,
the Notes or any other Loan Document to which it is or is to be a party,
or for the consummation of the transactions contemplated hereby.
(e) This Agreement has been, and each of the Notes and each
other Loan Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement
is, and each of the Notes and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance
with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in equity or at
law).
(f) The Consolidated balance sheets of Group and its
Subsidiaries as at January 7, 1995, and the related Consolidated
statements of operations, stockholders' equity and cash flow of Group
and its Subsidiaries for the fiscal years then ended, accompanied by an
opinion of Ernst & Young, independent public accountants, and the
Consolidated balance sheet of Group and its Subsidiaries as at July 8,
1995, and the related Consolidated statements of operations,
stockholders' equity and cash flow of Group and its Subsidiaries for the
six months then ended, duly certified by the chief financial officer of
Group, copies of which have been furnished to each Lender, fairly
present, subject, in the case of said balance sheet as at July 8, 1995,
and said statements of operations, stockholders' equity and cash flow
for the six months then ended, to year-end audit adjustments, the
Consolidated financial condition of Group and its Subsidiaries as at
such dates and the Consolidated results of the operations of Group and
its Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and since January 7, 1995, there has been no Material Adverse
Change.
(g) The Consolidated forecasted balance sheets and statements of
operations, stockholders' equity and cash flows of Group and its
Subsidiaries delivered to the Lenders pursuant to Section 3.01(h)(viii)
or 5.01(j) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in the light of conditions
existing at the time of delivery of such forecasts, and represented, at
the time of delivery, the Borrower's best estimate of its future
financial performance, provided, however, that such forecasts do not
constitute a guaranty of future financial performance.
(h) Neither the Information Memorandum (excluding the analyst's
report contained therein which was not furnished by the Borrower) nor
any other written information, exhibit or report furnished by any Loan
Party to any Agent or Lender Party in connection with the negotiation of
the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not
misleading (after giving effect to any supplemental information that is
furnished to such Agent or Lender Party which updates, amends or
modifies the information set forth therein).
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) purports to affect the
legality, validity or enforceability of this Agreement, any Note or any
other Loan Document or the consummation of the transactions contemplated
hereby or (ii) is or would be reasonably likely to have a Material
Adverse Effect.
(j) No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended.
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(l) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates.
(m) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90% and there has been no material adverse change
in the funding status of any such Plan since such date.
(n) Neither any Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(o) Neither any Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of any Loan Party
or any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(p) As of the date hereof, the aggregate annualized cost
(including, without limitation, the cost of insurance premiums) with
respect to post-retirement benefits under Welfare Plans for which the
Loan Parties and their Subsidiaries are liable does not exceed
$5,000,000.
(q) Except as described on Schedule 4.01(q): (i) the operations
and properties of each Loan Party and each of its Subsidiaries comply
with all applicable Environmental Laws and all Environmental Permits
have been obtained and are in effect for the operations and properties
of each Loan Party and its Subsidiaries and each Loan Party and its
Subsidiaries are in compliance with all such Environmental Permits,
except for such noncompliance with applicable Environmental Laws or
Environmental Permits or failure to have obtained Environmental Permits
as would not be reasonably likely to have a Material Adverse Effect and
(ii) no circumstances exist that are or would be reasonably likely to
(i) form the basis of an Environmental Action against any Loan Party or
any of its Subsidiaries or any of their properties or (ii) cause any
such property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law, that, in each case,
would reasonably be likely to have a Material Adverse Effect.
(r) Except as described on Schedule 4.01(r), none of the
properties of any Loan Party or any of its Subsidiaries is listed or, to
the Borrower's knowledge, proposed for listing on the National
Priorities List under CERCLA or any analogous state list of sites
requiring investigation or cleanup, and no underground storage tanks,
as such term is defined in 42 U.S.C.Section 6991, are located on any
property of any Loan Party or any of its Subsidiaries in violation of
any applicable Environmental Laws.
(s) Except as described on Schedule 4.01(s), neither any Loan
Party nor any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is listed
or proposed for listing on the National Priorities List under CERCLA or
any analogous state list, Hazardous Materials have not been generated,
used, treated, handled, stored or disposed of on, or released or
transported to or from, any property of any Loan Party or any of its
Subsidiaries, by any Loan Party or any of its Subsidiaries or, to the
knowledge of the Borrower, by any other third party, except in material
compliance with all applicable Environmental Laws and Environmental
Permits, and all other wastes generated at any such properties by any
Loan Party or any of its Subsidiaries or, to the knowledge of the
Borrower, by any other third party, have been disposed of in compliance
with all Environmental Laws and Environmental Permits, except, in each
of the above circumstances, where actions or activities not in
conformance with this representation would not be reasonably likely to
have a Material Adverse Effect.
(t) Each of Group and each of its Subsidiaries has filed all
income tax returns (federal, state, local and foreign) required to be
filed by it, and all other material tax returns (federal, state, local
and foreign), and has paid or caused to be paid all taxes shown thereon
to be due for the periods covered thereby, including interest and
penalties, or provided reserves for payment thereof to the extent
required under GAAP, other than taxes being contested in good faith and
by appropriate proceedings with respect to which adequate reserves in
accordance with GAAP have been established and except where failure to
so file or pay would not have a Material Adverse Effect.
(u) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by the Borrower,
nor the consummation of the other transactions contemplated hereby, will
violate any provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender Party shall have any Commitment hereunder, Group and the Borrower
will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and Environmental Laws, except where
the failure so to comply would not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, would reasonably be likely to by law become a Lien upon
its property; provided, however, that neither the Borrower nor any of
its Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors so long
as any such amount, when taken together with any amount required to be
paid as described in clause (b) of the definition of "Permitted Liens",
shall not exceed $10 million.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that Group and its Subsidiaries may consummate any
merger, consolidation or voluntary dissolution or liquidation permitted
under Section 5.02(b).
(e) Visitation Rights. At any reasonable time and from time to
time, permit any Agent or any of the Lender Parties or any agents or
representatives thereof, upon reasonable notice to the Borrower to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, (i) other than with respect to
transactions between the Borrower and its wholly owned Subsidiaries,
all transactions otherwise permitted under the Loan Documents with
any of their Affiliates on terms that are fair and reasonable and no
less favorable to the Borrower or such Subsidiary than it would
obtain in a comparable arm's-length transaction with a Person not an
Affiliate and (ii) with respect to transactions between the Borrower
and its wholly owned Subsidiaries, all transactions otherwise
permitted under the Loan Documents on terms that are no less
favorable to the Borrower than it would obtain in a comparable arm's-
length transaction with a Person not an Affiliate, provided, however,
that the foregoing restrictions shall not apply to transactions
pursuant to any agreement referred to in Section 5.02(a)(ii) and
provided, further, that the Borrower shall not engage in any
transaction with any such Subsidiary that would render such
Subsidiary insolvent or cause a default under, or a breach of, any
material contract to which such Subsidiary is a party.
(i) Implied Senior Rating. No less frequently than once during
every Fiscal Year, obtain from S&P (or, if unavailable, from Moody's) an
update of the Implied Senior Rating and deliver a letter to the Managing
Agents from S&P (or Moody's, as the case may be) advising the Managing
Agents of the current Implied Senior Rating.
(j) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each Fiscal
Year, Consolidated and consolidating balance sheets of Group and
its Subsidiaries as of the end of such quarter and Consolidated
and consolidating statements of income and Consolidated statements
of cash flows of Group and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with
the end of such quarter, duly certified (subject to year-end audit
adjustments) by the chief financial officer of the Borrower as
having been prepared in accordance with generally accepted
accounting principles and a certificate of the chief financial
officer of Group as to compliance with the terms of this Agreement
and setting forth in reasonable detail the calculations necessary
to demonstrate compliance with Section 5.03, provided that in the
event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a
statement of reconciliation conforming such financial statements
to GAAP;
(ii) as soon as available and in any event within 90 days
after the end of each Fiscal Year of Group, a copy of the annual
audit report for such year for Group and its Subsidiaries,
containing Consolidated balance sheet of Group and its
Subsidiaries as of the end of such fiscal year and Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders by any Approved
Accounting Firm or by other independent public accountants
acceptable to the Required Lenders, and a certificate of the chief
financial officer or Group as to compliance with the terms of this
Agreement setting forth in reasonable detail the calculations
necessary to demonstrate compliance with Section 5.03 provided
that in the event of any change in GAAP used in the preparation of
such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section 5.03, a
statement of reconciliation conforming such financial statements
to GAAP;
(iii) as soon as available and in any event no later than 45
days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Managing
Agents, of balance sheets, income statements and cash flow
statements on a monthly basis for the fiscal year following such
fiscal year then ended and on an annual basis for each fiscal year
thereafter until the Termination Date;
(iv) as soon as possible and in any event within two
Business Days after the occurrence of each Default continuing on
the date of such statement, a statement of the chief financial
officer of the Borrower setting forth details of such Default and
the action that the Borrower has taken and proposes to take with
respect thereto;
(v) promptly after the sending or filing thereof, copies
of all reports that the Borrower sends to any of its
securityholders, and copies of all reports and registration
statements that Group or any Subsidiary files with the Securities
and Exchange Commission or any national securities exchange;
(vi) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any of its Subsidiaries of
the type described in Section 4.01(i);
(vii) (i) promptly and in any event within 10 days after the
Borrower or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the
action, if any, that the Borrower or such ERISA Affiliate has
taken and proposes to take with respect thereto and (ii) on the
date any records, documents or other information must be furnished
to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA, a copy of such records, documents and information;
(viii)promptly and in any event within two Business Days
after receipt thereof by the Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer
any Plan;
(ix) promptly and in any event within 30 days after the
receipt thereof by the Borrower or any ERISA Affiliate, a copy of
the annual actuarial report for each Plan the funded current
liability percentage (as defined in Section 302(d)(8) of ERISA) of
which is less than 90% or the unfunded current liability of which
exceeds $5,000,000;
(x) promptly and in any event within five Business Days
after receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (B) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (C) the amount of liability incurred, or that may be incurred,
by the Borrower or any ERISA Affiliate in connection with any
event described in clause (A) or (B);
(xi) promptly after the assertion or occurrence thereof,
notice of any Environmental Action against or of any noncompliance
by Group or any of its Subsidiaries with any Environmental Law or
Environmental Permit that would reasonably be expected to have a
Material Adverse Effect;
(xii) within five Business Days after receipt thereof by any
Loan Party, copies of each notice from S&P (or Moody's, if S&P has
ceased to provided Implied Senior Ratings) indicating any change
in the Implied Senior Rating;
(xiii)such other information respecting the Borrower or any
of its Subsidiaries as any Lender Party through the Managing
Agents may from time to time reasonably request.
(k) Covenant To Guarantee Obligations. At such time as any new
direct or indirect Domestic Subsidiary is formed or acquired, cause such
new Subsidiary that is a wholly owned Subsidiary to (i) within 10 days
thereafter or such later time as the Borrower and the Documentation
Agent shall agree (but in any event no later than 30 additional days
thereafter), duly execute and deliver to the Documentation Agent
guarantees, in substantially the form of Exhibit G and otherwise in form
and substance reasonably satisfactory to the Documentation Agent,
guaranteeing the Borrower's Obligations under the Loan Documents,
provided, however, that the foregoing shall not apply to (A) joint
ventures or (B) any Subsidiary organized solely for the purpose of
entering into any agreements and transactions referred to in Section
5.02(a)(ii) to the extent that such agreements require that such
Subsidiary not be a Guarantor hereunder, and (ii) within 30 days
thereafter or such later time as the Borrower and the Documentation
Agent shall agree (but in any event no later than 30 additional days
thereafter), deliver to the Documentation Agent a signed copy of a
favorable opinion, addressed to the Documentation Agent, of counsel for
the Loan Parties acceptable to the Documentation Agent as to the
documents contained in clause (i) above, as to such guarantees being
legal, valid and binding obligations of such Subsidiaries enforceable in
accordance with their terms and as to such other matters as the
Documentation Agent may reasonably request.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, neither Group nor the Borrower will at
any time:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties of any character, whether now
owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than:
(i) Permitted Liens,
(ii) Liens on receivables of any kind (and in property
securing or otherwise supporting such receivables) in connection
with agreements for limited recourse sales by the Borrower or any
of its Subsidiaries for cash of such receivables or interests
therein, provided that (A) any such agreement is of a type and on
terms customary for comparable transactions in the good faith
judgment of the Board of Directors of the Borrower, (B) such
agreement does not create any interest in any asset other than
receivables (and property securing or otherwise supporting such
receivables) and proceeds of the foregoing, and (C) on any date of
determination, the aggregate face value of such receivables shall
not exceed at any time outstanding $150,000,000.
(iii) other Liens securing Debt in an aggregate principal
amount outstanding at any time not to exceed 15% of Consolidated
net tangible assets of Group and its Subsidiaries at such time.
(b) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so or to voluntarily liquidate, except that (i) any Domestic
Subsidiary of Group may merge into or consolidate with any other
Domestic Subsidiary of Group, provided that the person formed thereby
shall be a direct or indirect wholly owned Domestic Subsidiary of Group,
(ii) any Foreign Subsidiary of Group may merge into or consolidate with
any other Foreign Subsidiary of Group, provided that the Person formed
thereby shall be a direct or indirect wholly owned Foreign Subsidiary
of Group, (iii) any Domestic Subsidiary of Group may merge into or
consolidate with Group, (iv) the Borrower may merge into or consolidate
with any other Person so long as the Borrower is the surviving
corporation and (v) any Subsidiary of Group may voluntarily liquidate
and distribute its assets to Group or any direct or indirect wholly
owned Domestic Subsidiary of Group, provided, in each case, that no
Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(c) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) Debt under the Loan Documents;
(ii) Debt secured by Liens permitted by Section
5.02(a)(iii) hereof;
(iii) Debt incurred on terms customary for comparable
transactions in the good faith judgment of the Board of Directors
of the Borrower in connection with any obligation under or
resulting from any agreement referred to in Section 5.02(a)(ii);
(iv) Debt of Foreign Subsidiaries (and, without
duplication, guarantees thereof) not to exceed an aggregate of
$50,000,000 outstanding at any time, in addition to existing
Debt of Foreign Subsidiaries set forth on Schedule 5.02(c);
(v) unsecured Debt (other than letters of credit) of the
Borrower, Group or any Domestic Subsidiary that is a Guarantor;
(vi) Debt under the Trade Credit Facility in an aggregate
principal amount not to exceed $100,000,000 at any time
outstanding;
(vii) Letters of credit, including letters of credit which
may be secured pursuant to Liens permitted by Section
5.02(a)(iii), and any refinancing or renewals thereof, in an
aggregate stated amount not to exceed $100,000,000 at any time
outstanding in addition to amounts outstanding under the Letter of
Credit Facility;
(viii)Debt secured by Liens permitted by Section 5.02(a)(i)
hereof, but not any increase in amount thereof;
(ix) Debt under the 364-Day Revolving Credit Facility and
guarantees thereof, and any refinancing or renewals thereof;
(x) in the case of any of its Subsidiaries, Debt owing to
Group or to any of its Subsidiaries; and
(xi) Debt of Group or any of its Subsidiaries permitted
under Section 5.02(f).
No incurrence of Debt shall be permitted unless the Borrower shall be in
compliance with each of the covenants set forth in Section 5.03 both
before and after giving effect thereto.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to purchase, lease or otherwise acquire any assets, except:
(i) sales of inventory in the ordinary course of its
business;
(ii) sales, leases, transfers or other disposals of assets,
or grants of any option or other right to purchase, lease or
otherwise acquire assets, following the Effective Date for fair
value (valued at the time of any such sale, lease, transfer or
other disposal), in an aggregate amount from the Effective Date
not to exceed 10% of the total consolidated assets of the Borrower
and its Subsidiaries as valued at September 30, 1995, the fair
value of such assets shall have been determined in good faith by
the Board of Directors of the Borrower;
(iii) sales of assets on terms customary for comparable
transactions in the good faith judgment of the Board of Directors
of the Borrower pursuant to agreements referred to in Section
5.02(a)(ii);
(iv) transfers of assets between Group and its
Subsidiaries, and, in the case of the Borrower, subject to Section
5.02(g)(ii);
(v) sales of assets listed on Schedule 5.02(d) hereto;
(vi) sales of assets and properties of Group and its
Subsidiaries in connection with sale-leaseback transactions
otherwise permitted hereunder (including, without limitation,
under Section 5.02(c));
(vii) the sale or discount of accounts (A) owing by Persons
incorporated, residing or having their principal place of business
in the United States in an aggregate amount not exceeding
$5,000,000 in face amount per calendar year or (B) that are past
due by more than 90 days, provided that the sale or discount of
such accounts is in the ordinary course of the Borrower's business
and consistent with prudent business practices;
(viii)the licensing of trademarks and trade names by the
Borrower or any of its Subsidiaries in the ordinary course of its
business, provided that such licensing takes place on an
arm's-length basis; and
(ix) the rental by the Borrower and its Subsidiaries, as
lessors, in the ordinary course of their respective businesses, on
an arm's-length basis, of real property consisting of showrooms,
retail space, administrative space and other real property, in
each case under leases (other than Capitalized Leases).
(e) Dividends, Etc. Declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of capital stock of
Group, or purchase, redeem or otherwise acquire for value (or permit any
of its Subsidiaries to do so) any shares of any class of capital stock
of Group or any warrants, rights or options to acquire any such shares,
now or hereafter outstanding, except that, so long as no Default shall
have occurred and be continuing at the time of any action described
below or would result therefrom, Group may (i) declare and make any
dividend payment or other distribution payable in capital stock of Group
(including stock splits), (ii) purchase, redeem or otherwise acquire
shares of its capital stock or warrants, rights or options to acquire
any such shares with the proceeds received from the substantially
concurrent issue of new shares of its capital stock, (iii) declare or
pay cash dividends or other distributions to its stockholders or
purchase, redeem, retire, defease or otherwise acquire shares of its
capital stock or warrants, rights or options to acquire any such shares
for cash solely out of 50% of the net income of Group and its
Subsidiaries beginning with the Fiscal Year ended on or about December
31, 1993 and computed on a cumulative Consolidated basis, plus the
proceeds of Capital Stock Issuances by Group completed after the
Effective Date, (iv) purchase, redeem or otherwise acquire or issue or
sell shares of its capital stock or warrants, rights or options to
acquire any such shares in each case pursuant to such management,
employee or director stock option or stock purchase programs as are
approved by the Board of Directors of Group and, if required by law, the
shareholders of Group, and (v) issue stock to effect Investments
permitted by and subject to the terms of Sections 5.02(f) and (g).
(f) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) Investments by Group in its wholly owned Foreign
Subsidiaries in a net aggregate amount (after giving effect to any
dividends or other returns of capital received from any such
Foreign Subsidiaries) invested from the date hereof not to exceed
$125,000,000;
(ii) Investments by Group in its wholly owned Domestic
Subsidiaries;
(iii) the Guaranties;
(iv) Investments in Cash Equivalents;
(v) other Investments in a net aggregate amount (after
giving effect to any dividends or other returns of capital)
invested from the date hereof not to exceed $50,000,000;
(vi) endorsement of negotiable instruments for deposit or
collection in the ordinary course of business;
(vii) Investments representing stock or obligations issued
to Group or any of its Subsidiaries in settlement of claims
against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of Group or
such Subsidiary;
(viii) Investments representing the Debt of any Person
owing as a result of the sale by Group or any of its Subsidiaries
in the ordinary course of business of products or services (on
customary trade terms);
(ix) loans or advances, not to exceed $10,000,000 in the
aggregate at any one time outstanding, to (A) employees of the
Borrower and its Subsidiaries as travel advances, short-term loans
or relocation expenses, and (B) to employees and independent sales
representatives as commission advances;
(x) Investments outstanding on the date hereof and
described on Schedule 5.02(f), but not any additional investments
therein (other than as set forth thereon);
(xi) Investments represented by the L/C Cash Collateral
Account and the other bank accounts permitted hereunder;
(xii) Investments in Star/Warnaco International, a Cayman
Islands general partnership, or other ventures reasonably related
thereto, in a net aggregate amount (after giving effect to any
dividends or other returns of capital) invested from the date
hereof not to exceed $5,000,000 from the date hereof;
(xiii)Investments made with the capital stock of Group or
any of its Subsidiaries or with the proceeds of any Capital Stock
Issuance by Group; and
(xiv) Investments otherwise permitted under Section 5.02(c).
(g) Nature of Business. (i) Make, or permit any of its
Subsidiaries to make, (A) any change in the nature of its business as
carried on at the date hereof in a manner materially adverse to the
Agents and the Lender Parties or (B) any investments, including, without
limitation, Investments other than in apparel manufacturing or
wholesaling businesses or apparel accessories manufacturing or
wholesaling businesses (or in related retail businesses on a basis
consistent with past practices) except pursuant to Sections 5.02(f)(v)
and (xii), or (ii) transfer, in aggregate from the Effective Date, from
the Borrower to Group or to any of the Subsidiaries of Group other than
the Borrower operating assets (valued at the time of any such transfer)
in excess of 20% of the Consolidated assets of Group and its
Subsidiaries as valued at September 30, 1995, provided, however, that
the limitation of this clause (ii) shall not apply to mergers,
consolidations or liquidations permitted under Section 5.02(b).
(h) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies
(except as required or permitted by the Financial Accounting Standards
Board or generally accepted accounting principles), reporting practices
or Fiscal Year.
SECTION 5.03. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, Group and the Borrower will:
(a) Minimum Net Worth. Maintain at all times during each Fiscal
Quarter Net Worth of not less than $225,000,000, plus 50% of cumulative
Consolidated net income (if any) but without deduction for net losses,
of Group and its Subsidiaries (with cumulative Consolidated net income
calculated from January 7, 1995 through the date on which Group receives
an Implied Senior Rating of A-), plus the aggregate amount of any
additions to the Consolidated stockholders' equity of Group and its
Subsidiaries made during such period as a result of any Capital Stock
Issuance.
(b) Leverage Ratio. Maintain, as of the end of each Fiscal
Quarter, a ratio of Total Debt to the sum of Total Debt plus Net Worth
of not greater than the amount set forth below for each period set forth
below:
Fiscal Quarter
Ending On Or About Ratio
------------------ -----
December 31, 1995 0.550:1.00
March 31, 1996 0.550:1.00
June 30, 1996 0.550:1.00
September 30, 1996 0.550:1.00
December 31, 1996 and thereafter 0.500:1.00
(c) Fixed Charge Coverage Ratio. Maintain, as of the end of
each period of four consecutive Fiscal Quarters, a Fixed Charge Coverage
Ratio of not less than the amount set forth below for each period set
forth below:
Four Consecutive Fiscal Quarter
Period Ending On Or About Ratio
-------------------------------- -----
December 31, 1995 1.20:1.00
March 31, 1996 1.20:1.00
June 30, 1996 1.20:1.00
September 30, 1996 1.20:1.00
December 31, 1996 1.20:1.00
March 31, 1997 1.25:1.00
June 30, 1997 1.25:1.00
September 30, 1997 1.25:1.00
December 31, 1997 1.25:1.00
March 31, 1998 1.25:1.00
June 30, 1998 1.25:1.00
September 30, 1998 1.25:1.00
December 31, 1998 1.25:1.00
March 31, 1999 and thereafter 1.30:1.00
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance
when the same becomes due and payable; or the Borrower or any other Loan
Party shall fail to pay any interest on any Advance or make any other
payment of fees or other amounts payable under any Loan Document within
three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made; or
(c) (i) Group or the Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01(d) or (k),
5.02 or 5.03, or (ii) any Loan Party shall fail to perform or observe
any other term, covenant or agreement contained in any Loan Document on
its part to be performed or observed if such failure shall remain
unremedied for 30 days (A) after written notice thereof shall have been
given to the Borrower by any Agent or any Lender or (B) after any
officer of the Borrower obtains knowledge thereof; or
(d) Any Loan Party or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding
in a principal or notional amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party
or such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption [or other than as
a result of any event which provides cash to such Loan Party in an
amount sufficient to satisfy such redemption or prepayment]), purchased
or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated
maturity thereof; or
(e) Group, the Borrower or any of their Material Subsidiaries
(or any group of Subsidiaries which, in the aggregate, would constitute
a Material Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any
Group, the Borrower or any of their Subsidiaries (or any group of
Subsidiaries which, in the aggregate, would constitute a Material
Subsidiary) seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or such Loan
Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless the payment of such judgment or
order is covered by insurance and such insurance coverage is not in
dispute.
(g) Any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that could be reasonably
expected to have a Material Adverse Effect, and there shall be any
period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect; or
(h) any provision of any Loan Document, after delivery thereof
pursuant to Section 3.01 or 5.01(k), shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(i) (A) Group shall at any time cease to have legal and
beneficial ownership of 100% of the capital stock of the Borrower
(except if such parties shall merge); or (B) any Person, or two or more
Persons acting in concert, shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of Group (or other securities convertible
into such Voting Stock) representing 25% or more of the combined voting
power of all Voting Stock of Group (other than Excluded Persons); or (C)
any Person, or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of, the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Group, or
control over Voting Stock of Group (or other securities convertible into
such securities) representing 25% or more of combined voting power of
all Voting Stock of Group (other than Excluded Persons); or (D) Linda J.
Wachner (or, in the case of her death or disability, another officer or
officers of comparable experience and ability selected by the Borrower
within 180 days thereafter after consultation with the Managing Agents)
shall cease to be Chairman and Chief Executive Officer of Group and the
Borrower); or
(j) any ERISA Event shall have occurred with respect to a Plan of
any Loan Party or any of its ERISA Affiliates, and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans of the
Loan Parties and their ERISA Affiliates with respect to which an ERISA
Event shall have occurred and then exist (or the liability of the Loan
Parties and their ERISA Affiliates related to such ERISA Event) exceeds
$10,000,000; or
(k) any Loan Party or any of its ERISA Affiliates shall be in
default, as defined in Section 4219(c)(5) of ERISA, with respect to any
payment of Withdrawal Liability, and the sum of the outstanding balance
of such Withdrawal Liability and the outstanding balance of any other
Withdrawal Liability that any Loan Party or any of its ERISA Affiliates
has incurred exceeds $10,000,000; or
(l) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any
of its ERISA Affiliates, that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and, as a result of such reorganization or termination, the
aggregate annual contributions of the Loan Parties and their ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans, for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs, by an amount exceeding
$10,000,000;
then, and in any such event, the Managing Agents (i) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.02(b)) and of each Issuing Bank to issue Letters
of Credit to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request, or may with the consent, of the Required Lenders,
(A) by notice to the Borrower, declare the Notes, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of
Credit is issued, request that all Obligations under such agreement be
declared to be due and payable; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to any Loan Party
or any of its Material Subsidiaries (or any group of Subsidiaries which, in
the aggregate, would constitute a Material Subsidiary) under the Federal
Bankruptcy Code, (x) the obligation of each Lender to make Advances (other
than Letter of Credit Advances by the Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving
Credit Lender pursuant to Section 2.02(b)) and of each Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Managing Agents may, or shall at the request of the Required Lenders,
irrespective of whether they are taking any of the actions described in
Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith
upon such demand the Borrower will, pay to the Paying Agent on behalf of the
Lender Parties in same day funds at the Paying Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding.
If at any time the Managing Agents determine that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Agents and the Lender Parties or that the total amount of such funds
is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Managing Agents, pay to the Paying
Agent, as additional funds to be deposited and held in the L/C Cash Collateral
Account, an amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, then held in the L/C Cash
Collateral Account that the Managing Agents determine to be free and clear of
any such right and claim.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Documents (including, without limitation, enforcement or collection of the
Notes), each Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding
upon all Lender Parties and all holders of Notes; provided, however, that no
Agent shall be required to take any action that exposes such Agent to personal
liability or that is contrary to this Agreement or applicable law. Each Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. None of the Agents nor any
of their directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement and the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, each Agent: (i) may treat the payee of any Note as the holder
thereof until the Documentation Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement and the other Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement and the other Loan Documents
on the part of any Loan Party or to inspect the property (including the books
and records) of any Loan Party (v) shall not be responsible to any Lender
Party for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of or the other Loan Documents or any other instrument or
document furnished pursuant hereto; and (vi) shall incur no liability under or
in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram or telex) believed by it to be genuine and signed or sent
by the proper party or parties.
SECTION 7.03. Scotiabank, Citibank and Affiliates. With
respect to its Commitment, the Advances made by it and the Notes issued to
it, each of Scotiabank and Citibank shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and
may exercise the same as though it were not an Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated,
include Scotiabank and Citibank in their individual capacities. Each of
Scotiabank and Citibank and their Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with
or own securities of any Loan Party or any such Subsidiary, all as if
Scotiabank and Citibank were not Agents and without any duty to account
therefor to the Lender Parties.
SECTION 7.04. Lender Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent
or any other Lender Party and based on the financial statements referred to
in Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently
and without reliance upon any Agent or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. Each Lender Party (other than the
Designated Bidders) agrees to indemnify each Agent (to the extent not
reimbursed by the Borrower), ratably according to the respective principal
amounts of the Notes then held by each of them (or if no Notes are at the time
outstanding or if any Notes are held by Persons that are not Lenders, ratably
according to the respective amounts of their Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents or any action taken or omitted by such Agent under this Agreement or
the other Loan Documents, provided that no Lender Party shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender Party (other than the Designated Bidders) agrees to
reimburse each Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Loan Documents, to the
extent that such Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agents. Any Agent may resign at any
time by giving written notice thereof to the Lender Parties and the
Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent with the approval
of the Borrower. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that (a) no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than the
Designated Bidders and other than any Lender Party which is, at such time, a
Defaulting Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the initial Borrowing,
Section 3.02, (ii) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Lenders, that
shall be required for the Lenders or any of them to take any action hereunder,
(iii) release any Material Guarantor, or (vi) amend this Section 8.01, (b) no
amendment, waiver or consent shall, unless in writing and signed by the
Required Lenders and each Lender affected by such amendment, waiver or consent
(other than the Designated Bidders and other than any Lender which is, at such
time, a Defaulting Lender), (i) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to
such Lender or (ii) postpone any date fixed for any payment of principal of,
or interest on, the Notes held by such Lender or any fees or other amounts
payable hereunder to such Lender and (c) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and, for each
Facility directly affected by such amendment, waiver or consent, each Lender
that has a Commitment under such Facility (other than the Designated Bidders
and other than any Lender which is, at such time, a Defaulting Lender),
increase the Commitments of such Lender or subject such Lender to any
additional obligations; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or any Issuing
Bank, as the case may be, in addition to the Lenders required above to take
such action, affect the rights or obligations of the Swing Line Bank or of
such Issuing Bank, as the case may be, under this Agreement; and provided
further that no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above to take such
action, affect the rights or duties of such Agent under this Agreement or any
Note. Any request by any Loan Party for an amendment or waiver of any
provision of any Loan Document shall be made by such Loan Party by giving a
written request therefor to the Documentation Agent.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, if to the Borrower,
at its address at 90 Park Avenue, New York, New York 10016, Attention:
Chief Financial Officer; if to any Initial Lender or initial Issuing Bank
or Agent, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed,
telecopied, telexed or cabled, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier, confirmed by
telex answerback or delivered to the cable company, respectively, except
that notices and communications to an Agent pursuant to Article II, III or
VII shall not be effective until received by such Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) Group and the Borrower
agree to pay on demand (i) all reasonable costs and expenses (other than
taxes, including interest, additions to tax and penalties relating thereto,
except to the extent that the same are required to be paid pursuant to Section
2.14 hereof) of the Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and all other out-of-pocket expenses and (B) the reasonable
fees and expenses of counsel for the Agents with respect thereto, with respect
to advising the Agents as to their respective rights and responsibilities, or
the protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and
with respect to presenting claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally, and any proceeding ancillary thereto) and (ii)
all reasonable costs and expenses (other than taxes, including interest,
additions to tax and penalties relating thereto, except to the extent that the
same are required to be paid pursuant to Section 2.14 hereof) of the Agents
and the Lender Parties in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights generally
or otherwise (including, without limitation, the reasonable fees and expenses
of counsel for the Agents and each Lender Party with respect thereto).
(b) Group and the Borrower agree to indemnify and hold
harmless each of the Agents and each Lender and each of their Affiliates
and their officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel, but other than taxes, including interest,
additions to tax and penalties relating thereto, except to the extent that
the same are required to be paid pursuant to Section 2.14 hereof) that may
be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation,
litigation or proceeding arising out of, related to or in connection with
(i) the Notes, this Agreement, the Facilities, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, in each case whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. The Borrower
also agrees not to assert any claim against any Agent, any Lender, any of
their Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise
relating to the Notes, this Agreement, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Advances,
except in the event of gross negligence or willful misconduct on the part
of such Agent, Lender or Affiliate.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or LIBO Rate Advance is made by the Borrower to or for
the account of a Lender other than on the last day of the Interest Period for
such Advance, as a result of a payment or Conversion pursuant to Section 2.11,
2.12 or 2.14, acceleration of the maturity of the Notes pursuant to Section
6.01 or for any other reason, the Borrower shall, upon demand by such Lender
Party (with a copy of such demand to the Paying Agent), pay to the Paying
Agent for the account of such Lender Party any amounts required to compensate
such Lender Party for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion, including, without
limitation, any loss (excluding loss of anticipated profits and taxes,
including interest, additions to tax and penalties relating thereto, except to
the extent that the same are required to be paid pursuant to Section 2.14
hereof), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender Party to fund or maintain
such Advance.
(d) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in Sections 2.11, 2.14 and 8.04 and the agreements and obligations
of any Lender Party or Agent contained in Section 2.14 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Managing Agents to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party 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
indebtedness at any time owing by such Lender Party or such Affiliate to or
for the credit or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, whether or not such Lender Party shall have made
any demand under this Agreement or such Note and although such obligations may
be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender Party and its Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender Party and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become
effective upon satisfaction of the conditions precedent set forth in Section
3.01) when it shall have been executed by the Borrower, Group and the Agents
and when the Managing Agents shall have been notified by each Initial Lender
and initial Issuing Bank that such Initial Lender and initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Agents and each Lender Party and their respective successors
and assigns, except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of
the Lender Parties.
SECTION 8.07. Assignments, Designations and Participations (a)
Each Lender Party (other than the Designated Bidders) may assign, and, if (i)
demanded by the Borrower following either (x) a payment by the Borrower of
Taxes with respect to such Lender in accordance with Section 2.14 or (y) the
occurrence of an event that would, upon payment to such Lender of amounts
hereunder, require a payment by the Borrower of Taxes with respect to such
Lender in accordance with Section 2.14 and (ii) upon at least 30 Business
Days' notice to such Lender and the Paying Agent, will assign, to one or more
banks or other entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Advances owing to it (including accrued
interest) and the Note or Notes held by it but not including any right to make
Competitive Bid Advances, Competitive Bid Advances owing to it and Competitive
Bid Notes); provided, however, that (A) each such assignment shall be of a
fixed percentage of all rights and obligations under and in respect of all of
the Facilities under which it has a Commitment; (B) except in the case (x) of
an assignment to a Person that, immediately prior to such assignment, was a
Lender or (y) an assignment of all of a Lender's rights and obligations under
this Agreement, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event
be less than $10,000,000, and the amount of the Commitment of the assigning
Lender being retained by such Lender immediately after giving effect to such
assignment (determined as of the effective date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$10,000,000, (C) each such assignment shall be to an Eligible Assignee, (D)
each such assignment made as a result of a demand by the Borrower pursuant to
this Section 8.07(a) shall be arranged by the Borrower after consultation with
the Managing Agents and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (E) no Lender shall
be obligated to make any such assignment as a result of a demand by the
Borrower pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together
with accrued interest thereon to the date of payment of such principal amount
and all other amounts payable to such Lender under this Agreement, (F) no such
assignments will be permitted without the consent of the Managing Agents until
the Managing Agents shall have notified the Lender Parties that syndication
of the Commitments thereunder has been completed, and (G) the parties to
each such assignment shall execute and deliver to the Paying Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment and a processing
and recordation fee of $2,500. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender Party's hereunder and (y) the Lender Party's
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender Party's rights
and obligations under this Agreement, such Lender Party shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other or any other Loan Document or any other instrument or
document furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the any Agent, such
assigning Lender Party or any other Lender Party and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are
delegated to the each Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed
by it as a Lender Party.
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender Party and an assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note or Notes subject to such
assignment, the Paying Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Paying Agent in exchange for the
surrendered Note a new Note to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender Party has retained a Commitment
hereunder, a new Note to the order of the assigning Lender Party in an
amount equal to the Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1 or A-2 hereto.
(d) Each Lender Party (other than the Designated Bidders) may
designate one or more banks or other entities to have a right to make
Competitive Bid Advances as a Lender Party pursuant to Section 2.04; provided,
however, that (i) no such Lender Party shall be entitled to make more than two
such designations, (ii) each such Lender Party making one or more of such
designations shall retain the right to make Competitive Bid Advances as a
Lender Party pursuant to Section 2.04, (iii) each such designation shall be to
a Designated Bidder and (iv) the parties to each such designation shall
execute and deliver to the Paying Agent, for its acceptance and recording in
the Register, a Designation Agreement. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Designation Agreement, the designee thereunder shall be a party hereto with a
right to make Competitive Bid Advances as a Lender Party pursuant to Section
2.04 and the obligations related thereto.
(e) By executing and delivering a Designation Agreement, the
Lender Party making the designation thereunder and its designee thereunder
confirm and agree with each other and the other parties hereto as follows:
(i) such Lender Party makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii) such
Lender Party makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto; (iii) such
designee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Designation Agreement; (iv) such
designee will, independently and without reliance upon any Agent, such
designating Lender Party or any other Lender Party and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such designee confirms that it is a Designated Bidder; (vi) such designee
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are
delegated to such Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such designee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender Party.
(f) Upon its receipt of a Designation Agreement executed by a
designating Lender Party and a designee representing that it is a Designated
Bidder, the Paying Agent shall, if such Designation Agreement has been
completed and is substantially in the form of Exhibit D hereto, (i) accept
such Designation Agreement, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower.
(g) The Paying Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance and each
Designation Agreement delivered to and accepted by it and a register for
the recordation of the names and addresses of the Lender Parties and, with
respect to Lenders other than Designated Bidders, the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agents and the Lender Parties may treat each Person whose name is recorded
in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower
or any Lender Party at any reasonable time and from time to time upon
reasonable prior notice.
(h) Each Lender Party may sell participations to one or more
banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) such Lender Party's obligations under this
Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender Party shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Agents and the
other Lender Parties shall continue to deal solely and directly with such
Lender Party in connection with such Lender Party's rights and obligations
under this Agreement and (v) no participant under any such participation shall
have any right to approve any amendment or waiver of any provision of this
Agreement or any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would (i) reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, (ii) postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation or
(iii) release any Material Guarantor.
(i) Any Lender Party may, in connection with any assignment,
designation or participation or proposed assignment, designation or
participation pursuant to this Section 8.07, disclose to the assignee,
designee or participant or proposed assignee, designee or participant, any
information relating to the Borrower furnished to such Lender Party by or on
behalf of the Borrower; provided that, prior to any such disclosure, the
assignee, designee or participant or proposed assignee, designee or
participant shall agree to preserve the confidentiality of any Confidential
Information relating to the Borrower received by it from such Lender Party.
(j) Each Issuing Bank may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the undrawn
portion of its Letter of Credit Commitment at any time; provided, however,
that (i) except in the case of an assignment to a Person that immediately
prior to such assignment was an Issuing Bank or an assignment of all of an
Issuing Bank's rights and obligations under this Agreement, the amount of the
Letter of Credit Commitment of the assigning Issuing Bank being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$10,000,000 and shall be in an integral multiple of $1,000,000 in excess
thereof, (ii) each such assignment shall be to an Eligible Assignee and (iii)
the parties to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment and
Acceptance, together with a processing and recordation fee of $2,500.
(k) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all
or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System.
SECTION 8.08. Confidentiality. None of the Agents nor any Lender
Party shall disclose any Confidential Information to any other Person without
the consent of Group and the Borrower, other than (a) to such Agent's or such
Lender Party's Affiliates and their officers, directors, employees, agents and
advisors and, as contemplated by Section 8.07(i), to actual or prospective
assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) to any rating
agency when required by it, provided that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to Group or the Borrower received by it from
such Lender Party and (d) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking.
SECTION 8.09. No Liability of the Issuing Banks. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee
of any Letter of Credit with respect to its use of such Letter of Credit.
Neither any Issuing Bank nor any of its officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by such Issuing Bank against presentation of documents
that do not comply with the terms of a Letter of Credit, including failure
of any documents to bear any reference or adequate reference to the Letter
of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall
have a claim against such Issuing Bank, and such Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by
(i) such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply
with the terms of the Letter of Credit or (ii) such Issuing Bank's willful
failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Governing Law. This Agreement and the Notes shall
be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of any New York State court or federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or the Notes, 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 any such New York State court 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 shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes in the courts of any
jurisdiction.
(b) Each of the parties hereto 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 the
Notes in any New York State or federal court. 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.
SECTION 8.13. Waiver of Jury Trial. Each of the Borrower, the
Agents and the Lender Parties hereby irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract,
tort or otherwise) arising out of or relating to this Agreement or the Notes
or the actions of any Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
WARNACO INC.
By
------------------------------
Title:
THE WARNACO GROUP, INC.
By
------------------------------
Title:
THE BANK OF NOVA SCOTIA
as Managing Agent, Paying Agent,
Competitive Bid Agent, Swing Line
Bank and an Issuing Bank
By
------------------------------
Title:
CITIBANK, N.A.
,
as Managing Agent and Documentation
Agent
By
------------------------------
Title:
Initial Lenders
CHEMICAL BANK
By
------------------------------
Title:
THE INDUSTRIAL BANK OF JAPAN,
LTD., NEW YORK BRANCH
By
------------------------------
Title:
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By
------------------------------
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By
------------------------------
Title:
SOCIETE GENERALE
By
------------------------------
Title:
THE BANK OF NEW YORK
By
------------------------------
Title:
CREDIT SUISSE, NEW YORK
By
------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By
------------------------------
Title:
THE FUJI BANK, LIMITED, NEW YORK
BRANCH
By
------------------------------
Title:
COMMERZBANK A.G., NEW YORK
BRANCH
By
------------------------------
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By
------------------------------
Title:
THE BANK OF CALIFORNIA, N.A.
By
------------------------------
Title:
THE BANK OF TOKYO TRUST
COMPANY
By
------------------------------
Title:
THE SUMITOMO BANK, LIMITED
By
------------------------------
Title:
MARINE MIDLAND BANK
By
------------------------------
Title:
BANK LEUMI TRUST COMPANY OF
NEW YORK
By
------------------------------
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By
------------------------------
Title:
THE SANWA BANK LIMITED
By
------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By
------------------------------
Title:
CITIBANK, N.A.
By
------------------------------
Title:
THE BANK OF NOVA SCOTIA
By
------------------------------
Title:
SCHEDULE I
WARNACO INC.
COMMITMENTS AND
APPLICABLE LENDING OFFICES
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Revolving Letter of Eurodollar
Term Credit Credit Swing Line Domestic Lending
Name of Bank Commitment Commitment Commitment Commitment Lending Office Office
- ------------ ---------- ---------- ---------- ------------ ---------------- ------------
</TABLE>
EXHIBIT A-1 - FORM OF TERM NOTE
U.S.$_______________ Dated: _______________, 1995
FOR VALUE RECEIVED, the undersigned, WARNACO INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the Term
Advances made by the Lender to the Borrower pursuant to the Credit Agreement
dated as of October __, 1995 among the Borrower, The Warnaco Group, Inc., the
banks, financial institutions and other institutional lenders listed on the
signature pages thereof, and The Bank of Nova Scotia ("Scotiabank") and
Citibank, N.A. ("Citibank") as Managing Agents, Citibank as Documentation
Agent, and Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing
Line Bank and an Issuing Bank (as amended, supplemented or modified from time
to time, the "Credit Agreement"; the terms defined therein being used herein
as therein defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Term Advance from the date of such Term Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Scotiabank, as Paying Agent for the account of the
Lender, at ___________________, ____________________, __________, in same day
funds. Each Term Advance owing to the Lender by the Borrower pursuant to the
Credit Agreement, and all payments made on account of principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Term Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of a single Term Advance by
the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned,
the indebtedness of the Borrower resulting from each such Term Advance being
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
WARNACO INC.
By
--------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- ---- --------- -------------- ---------------- --------
EXHIBIT A-2 - FORM OF REVOLVING CREDIT NOTE
U.S.$_______________ Dated: _______________, 1995
FOR VALUE RECEIVED, the undersigned, WARNACO INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the
Revolving Credit Advances made by the Lender to the Borrower pursuant to the
Credit Agreement dated as of October __, 1995 among the Borrower, The Warnaco
Group, Inc., the banks, financial institutions and other institutional lenders
listed on the signature pages thereof, and The Bank of Nova Scotia
("Scotiabank") and Citibank, N.A. ("Citibank") as Managing Agents, Citibank as
Documentation Agent, and Scotiabank as Paying Agent and Competitive Bid Agent
and as a Swing Line Bank and an Issuing Bank (as amended, supplemented or
modified from time to time, the "Credit Agreement"; the terms defined therein
being used herein as therein defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of such Revolving
Credit Advance until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Scotiabank, as Paying Agent for the account of the
Lender, at _________________________, ____________________, __________, in
same day funds. Each Revolving Credit Advance owing to the Lender by the
Borrower pursuant to the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.
This Promissory Note is one of the Revolving Credit Notes referred
to in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Revolving Credit
Advances and Swing Line Advances by the Lender to the Borrower from time to
time in an aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Revolving Credit Advance and Swing Line Advance being
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
WARNACO INC.
By
-----------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
- ---- --------- -------------- ---------------- ---------
EXHIBIT A-3 - FORM OF
COMPETITIVE BID
NOTE
U.S.$_______________ Dated: _______________, 1995
FOR VALUE RECEIVED, the undersigned, WARNACO INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement dated as of October __,
1995 among the Borrower, The Warnaco Group, Inc., the banks, financial
institutions and other institutional lenders listed on the signature pages
thereof, and The Bank of Nova Scotia ("Scotiabank") and Citibank, N.A.
("Citibank") as Managing Agents, Citibank as Documentation Agent, and
Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing Line Bank
and an Issuing Bank (as amended, supplemented or modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as therein
defined)), on ________, 199_, the principal amount of U.S.$_______________.
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in
full, at the interest rate and payable on the interest payment date or dates
provided below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed).
Both principal and interest are payable in lawful money of the
United States of America to Scotiabank, as Paying Agent, for the account of
the Lender at the office of _________________________, at
_________________________ in same day funds.
This Promissory Note is one of the Competitive Bid Notes referred
to in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
WARNACO INC.
By
----------------------------
Title:
EXHIBIT B-1 - FORM OF NOTICE OF
BORROWING
The Bank of Nova Scotia, as Paying Agent
for the Lenders parties
to the Credit Agreement
referred to below
[Insert Address]
[Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Warnaco Inc., refers to the Credit Agreement,
dated as of October __, 1995 (as amended, supplemented or modified from time
to time, the "Credit Agreement", the terms defined therein being used herein
as therein defined), among the undersigned, The Warnaco Group, Inc., the
banks, financial institutions and other institutional lenders listed on the
signature pages thereof, and The Bank of Nova Scotia ("Scotiabank") and
Citibank, N.A. ("Citibank") as Managing Agents, Citibank as Documentation
Agent, and Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing
Line Bank and an Issuing Bank and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________, 199_.
(ii) The Facility under which the Proposed Borrowing is requested
is ___________ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$_______________.
[(v) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in each Loan
Document are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date other than any such representatives and
warranties that, by their terms, refer to a date other than the date of
such Borrowing or issuance; and
(B) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
WARNACO INC.
By
---------------------------
Title:
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
The Bank of Nova Scotia, as Paying Agent
for the Lenders parties
to the Credit Agreement
referred to below
[Insert Address] [Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Warnaco Inc., refers to the Credit Agreement,
dated as of October __, 1995 (as amended or modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, The Warnaco Group, Inc., the banks, financial
institutions and other institutional lenders listed on the signature pages
thereof, and The Bank of Nova Scotia ("Scotiabank") and Citibank, N.A.
("Citibank") as Managing Agents, Citibank as Documentation Agent, and
Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing Line Bank
and an Issuing Bank, and hereby gives you notice, irrevocably, pursuant to
Section 2.04 of the Credit Agreement that the undersigned hereby requests a
Competitive Bid Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such Competitive Bid Borrowing (the "Proposed
Competitive Bid Borrowing") is requested to be made:
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) [Maturity Date] [Interest Period] ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
(F) ___________________ ________________________
(G) ___________________ ________________________
(H) ___________________ ________________________
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:
(a) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed Competitive
Bid Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date;
(b) no event has occurred and is continuing, or would result
from the Proposed Competitive Bid Borrowing or from the application of
the proceeds therefrom, that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result
of which the information concerning the undersigned that has been
provided to the Agent and each Lender by the undersigned in connection
with the Credit Agreement would include an untrue statement of a
material fact or omit to state any material fact or any fact necessary
to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading; and
(d) the aggregate amount of the Proposed Competitive Bid
Borrowing and all other Borrowings to be made on the same day under the
Credit Agreement is within the aggregate amount of the unused
Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.04(a)(v)
of the Credit Agreement.
Very truly yours,
WARNACO INC.
By
----------------------------
Title:
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October _,
1995 (as amended or modified from time to time, the "Credit Agreement") among
Warnaco Inc., a Delaware corporation (the "Borrower"), The Warnaco Group,
Inc., the banks, financial institutions and other institutional lenders listed
on the signature pages thereof, and The Bank of Nova Scotia ("Scotiabank") and
Citibank, N.A. ("Citibank") as Managing Agents, Citibank as Documentation
Agent, and Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing
Line Bank and an Issuing Bank. Terms defined in the Credit Agreement are used
herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor's rights and obligations under the Credit Agreement as of
the date hereof (other than in respect of Competitive Bid Advances and
Competitive Bid Notes) equal to the percentage interest specified on Schedule
1 hereto of all outstanding rights and obligations under the Credit Agreement
(other than in respect of Competitive Bid Advances and Competitive Bid Notes).
After giving effect to such sale and assignment, the Assignee's Commitments
and the amount of the Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note
or Notes held by the Assignor and requests that the Agent exchange such Note
or Notes for a new Note or Notes payable to the order of the Assignee in an
amount equal to the Commitments assumed by the Assignee pursuant hereto or new
Notes payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitment retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (vi) attaches any U.S. Internal Revenue Service forms required under
Section 2.14 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent.
The effective date for this Assignment and Acceptance (the "Effective Date")
shall be the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and facility fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: ___________%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Revolving Credit
Advances assigned: $__________
Principal amount of Revolving Credit Note payable to Assignee:$__________
Principal amount of Revolving Credit Note payable to Assignor:$__________
Assignee's Term Commitment: $__________
Aggregate outstanding principal amount of Term Advances
assigned:$__________
Principal amount of Term Note payable to Assignee: $__________
Principal amount of Term Note payable to Assignor: $__________
Effective Date(*):_______________, 199_
[NAME OF ASSIGNOR], as Assignor
By
---------------------------
Title:
Dated: _______________, 199_
[NAME OF ASSIGNEE], as Assignee
By
---------------------------
Title:
Dated: _______________, 199_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved](*) this
__________ day of _______________, 199_
THE BANK OF NOVA SCOTIA, as Paying Agent
By
------------------------------
Title:
[Approved this __________ day
of _______________, 199_
WARNACO INC.
By ]*
------------------------------
Title:
EXHIBIT D - FORM OF
DESIGNATION AGREEMENT
Dated _______________, 199_
Reference is made to the Credit Agreement dated as of October __,
1995 (as amended or modified from time to time, the "Credit Agreement") among
Warnaco Inc., a Delaware corporation (the "Borrower"), The Warnaco Group,
Inc., the banks, financial institutions and other institutional lenders listed
on the signature pages thereof, and The Bank of Nova Scotia ("Scotiabank") and
Citibank, N.A. ("Citibank") as Managing Agents, Citibank as Documentation
Agent, and Scotiabank as Paying Agent and Competitive Bid Agent and as a Swing
Line Bank and an Issuing Bank. Terms defined in the Credit Agreement are used
herein with the same meaning.
(*) This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Agent.
(*) Required if the Assignee is an Eligible Assignee solely by reason of
clause (viii) of the definition of "Eligible Assignee".
_________________________ (the "Designor") and
_________________________ (the "Designee") agree as follows:
1. The Designor hereby designates the Designee, and the
Designee hereby accepts such designation, to have a right to make Competitive
Bid Advances pursuant to Section 2.04 of the Credit Agreement.
2. The Designor makes no representation or warranty and assumes
no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto and (ii) the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant
thereto.
3. The Designee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Designation Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent, the Designor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is a Designated Bidder; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (v) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender.
4. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Agent for acceptance
and recording by the Agent. The effective date for this Designation Agreement
(the "Effective Date") shall be the date of acceptance hereof by the Agent,
unless otherwise specified on the signature page hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, the Designee shall be a party to the Credit Agreement with a
right to make Competitive Bid Advances as a Lender pursuant to Section 2.04 of
the Credit Agreement and the rights and obligations of a Lender related
thereto.
6. This Designation Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
7. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Designation Agreement by
telecopier shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee have caused this
Designation Agreement to be executed by their officers thereunto duly
authorized as of the date first above written.
Effective Date(*): _______________, 199__
[NAME OF DESIGNOR],
as Designor
By
---------------------------
Title:
[NAME OF DESIGNEE],
as Designee
By
---------------------------
Title:
Applicable Lending Office (and
address
for notices):
[Address]
Accepted this ____ day
of _______________, 199_
THE BANK OF NOVA SCOTIA., as Paying Agent
By
---------------------------
Title:
_____________
(*) This date should be no earlier than five Business Days after the
delivery of this Designation Agreement to the Agent.
THE BANK OF NOVA SCOTIA and CITIBANK, N.A.
COPY AS EXECUTED TOGETHER WITH ALL SCHEDULES AND EXHIBITS HERETO AND EXHIBITS
F AND G AS SEPARATELY EXECUTED
EXHIBIT 11.1
THE WARNACO GROUP, INC.
Calculation of Income per Common Share
(in thousands except share data)
<TABLE>
<CAPTION>
For the Quarter Ended For the Nine Months Ended
------------------------ -------------------------
October 7, October 8, October 7, October 8,
1995 1994 1995 1994
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net income..................................... $ 18,091 $ 21,711 $ 37,976 $ 39,758
========== ========== ========== ==========
Weighted average number of shares
outstanding during the period:
Shares outstanding............................. 37,499,492 38,749,795 37,499,492 37,916,367
Add:
Shares issued in public offering........ 1,511,011 -- 503,670 --
Common equivalent shares using the
Treasury Stock method.............. 5,805,364 3,053,149 4,925,143 3,292,305
Less: treasury stock.......................... (286,600) -- (286,600) --
---------- ---------- ---------- ----------
Weighted average number of shares
outstanding during the period................ 44,529,267 41,802,944 42,641,705 41,208,672
========== ========== ========== ==========
Net income per share........................... $0.41 $0.52(1) $0.89 $0.96(1)
========== ========== ========== ==========
<FN>
- --------
(1) Net income and net income per share before the loss on the California
earthquake and after a normalized provision for income taxes at an
effective income tax rate of 38% was $13,771 or $0.33 per share for
the third quarter of fiscal 1994 and $27,750 or $0.67 per share for
the nine months ended October 8, 1994.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THE WARNACO GROUP, INC. FOR THE NINE MONTHS ENDED
OCTOBER 7, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-06-1996
<PERIOD-START> JAN-08-1995
<PERIOD-END> OCT-07-1995
<CASH> 2,927
<SECURITIES> 0
<RECEIVABLES> 194,788
<ALLOWANCES> 0
<INVENTORY> 352,918
<CURRENT-ASSETS> 578,330
<PP&E> 162,461
<DEPRECIATION> 76,087
<TOTAL-ASSETS> 941,824
<CURRENT-LIABILITIES> 226,127
<BONDS> 197,798
0
0
<COMMON> 521
<OTHER-SE> 505,346
<TOTAL-LIABILITY-AND-EQUITY> 941,824
<SALES> 645,120
<TOTAL-REVENUES> 645,120
<CGS> 425,449
<TOTAL-COSTS> 425,449
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,852
<INCOME-PRETAX> 61,252
<INCOME-TAX> 23,276
<INCOME-CONTINUING> 37,976
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,976
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
</TABLE>
