As filed with the Securities and Exchange Commission on August 20, 1997
Registration No.333-12545
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT No. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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NINE WEST GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1093855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 West Broad Street
Stamford, Connecticut 06902
(203) 324-7567
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Copy to:
ROBERT C. GALVIN JOEL K. BEDOL
Executive Vice President, Senior Vice President
Chief Financial Officer and Treasurer and General Counsel
Nine West Group Inc. Nine West Group Inc.
9 West Broad Street 9 West Broad Street
Stamford, Connecticut 06902 Stamford, Connecticut 06902
(203)328-4373 (203)328-4386
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Security Offering Price Fee
- ------------- ------------ ---------------- ---------------- -------------
5-1/2%
Convertible
Subordinated
Notes
Due 2003 $185,680,000 100% $185,680,000 $56,266.67(1)
Common Stock, 3,055,958
$.01 par value shares (2) -- $185,680,000 --
</TABLE>
(1) Calculated pursuant to Rule 457 (i) of the Securities Act of 1933, as
amended. In connection with the original filing of this registration statement
on September 23, 1996, the registrant paid a fee in the amount of $25,532.76.
An additional $30,733.91 is being paid upon the filing of this amendment.
(2) Based on a conversion price of $60.76 per share, but deemed to include any
additional shares of Common Stock that may be issuable upon conversion of the
Notes as a result of the antidilution provisions thereof. Pursuant to Rule
457(i), no registration fee is required for these shares.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION, DATED AUGUST 20, 1997
NINE WEST GROUP INC.
$185,680,000
5-1/2% Convertible Subordinated Notes Due 2003
The 5-1/2% Convertible Subordinated Notes Due 2003 (the "Notes") of Nine
West Group Inc., a Delaware corporation (the "Company"), and the shares of the
Company's common stock, par value $.01 per share (the "Common Stock" and,
together with the Notes, the "Securities"), issuable upon conversion of the
Notes, may be offered for sale from time to time for the account of certain
holders of the Securities (the "Selling Holders") as described under "Selling
Holders." The Selling Holders may, from time to time, sell the Securities
offered hereby to or through one or more underwriters, directly to other
purchasers or through agents in ordinary brokerage transactions, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
prices related to then prevailing market prices or at negotiated prices. See
"Plan of Distribution."
The Notes mature on July 15, 2003, unless previously redeemed. Interest on
the Notes is payable semi-annually on January 15 and July 15 of each year.
Holders ("Holders") of the Notes are entitled, at any time through July 15,
2003, subject to prior redemption, to convert any Notes or portions thereof into
Common Stock at a conversion price of $60.76 per share, subject to certain
adjustments. The Company may, at its option, pay an amount in cash equal to the
Market Price (as defined herein) of the shares of Common Stock into which such
Notes are convertible in lieu of delivery of such shares. See "Description of
the Notes -- Conversion of Notes." The Common Stock is quoted on the New York
Stock Exchange ("NYSE") under the symbol "NIN." On August 19, 1997, the last
reported sale price of the Common Stock on the NYSE was $42-1/4 per share.
The Notes are redeemable, in whole or in part, at the option of the
Company, at any time on or after July 16, 1999, at the declining redemption
prices set forth herein, plus accrued interest. In the event of a Change of
Control (as defined herein), each Holder of Notes may require the Company to
repurchase such Holder's Notes in whole or in part at a redemption price of 101%
of the principal amount thereof plus accrued interest. See "Description of the
Notes -- Optional Redemption by the Company" and "-- Change of Control."
The Notes represent general unsecured obligations of the Company and are
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined herein) of the Company. In addition, because a substantial portion
of the Company's operations is conducted through subsidiaries, claims of holders
of indebtedness and other creditors of such subsidiaries have priority with
respect to the assets and earnings of such subsidiaries over the claims of
creditors of the Company, including holders of the Notes.
The Notes were originally issued on June 26, 1996 and July 9, 1996 in
transactions exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act").
The Company will not receive any of the proceeds from the sale of any of
the Notes or the Common Stock issuable upon conversion thereof offered by the
Selling Holders.
See "Risk Factors" on page _ for a discussion of certain factors that
should be considered by prospective purchasers of the Securities offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is , 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and Suite 1300,
Seven World Trade Center, New York, New York 10048. Copies of such material
also can be obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
also maintains a World Wide Web Site that contains reports, proxy statements and
other information regarding registrants, such as the Company, that file
electronically with the Commission. The address of the site is
http://www.sec.gov. Such reports, proxy statements and other information also
can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005, on which exchange the Common Stock is listed.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act, with respect to the
Securities offered hereby. This Prospectus omits certain information contained
in the Registration Statement, including exhibits thereto, in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Securities, reference is made to the Registration
Statement and exhibits thereto, copies of which may be inspected at the offices
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or obtained
from the Commission at the same address at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated by reference into this Prospectus and made a part hereof:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
February 1, 1997, as amended;
(ii) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended May 3, 1997;
(iii) The Company's Current Reports on Form 8-K dated May 23, 1995, as
amended, and dated June 20, 1997; and
(iv) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 8-A dated May 6, 1992, as
amended (File No. 1-11161).
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein, or in a
document incorporated herein by reference, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in any subsequently filed document incorporated herein by reference,
which statement is also incorporated herein by reference, is inconsistent with
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents incorporated by reference into this Prospectus,
other than exhibits to such documents (unless the exhibits are specifically
incorporated by reference into such documents), will be provided without charge
to each person to whom this Prospectus is delivered, upon oral or written
request by such person to Investor Relations, Nine West Group Inc., 11933
Westline Industrial Drive, St. Louis, Missouri 63146, telephone (314) 579-8812.
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CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS PROSPECTUS WHICH ARE NOT HISTORICAL
FACTS CONTAIN FORWARD-LOOKING INFORMATION WITH RESPECT TO THE COMPANY'S PLANS,
PROJECTIONS OR FUTURE PERFORMANCE, THE OCCURRENCE OF WHICH INVOLVE CERTAIN RISKS
AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS OR PLANS TO
DIFFER MATERIALLY FROM THOSE EXPECTED BY THE COMPANY. CERTAIN OF SUCH RISKS AND
UNCERTAINTIES RELATE TO COMPETITION IN THE INDUSTRY; CHANGES IN THE PREVAILING
COSTS OF LEATHER AND OTHER RAW MATERIALS, LABOR AND ADVERTISING; LOCAL AND
REGIONAL ECONOMIC CONDITIONS IN THE AREAS SERVED BY THE COMPANY; THE EFFECTS OF
WEATHER CONDITIONS ON SEASONAL SALES IN THE COMPANY'S MARKET AREA; CHANGES IN
CONSUMER DEMANDS AND PREFERENCES; RETAIL STORE CONSTRUCTION DELAYS; THE
AVAILABILITY OF DESIRABLE RETAIL LOCATIONS AND THE NEGOTIATION OF ACCEPTABLE
LEASE TERMS FOR SUCH LOCATIONS; THE ABILITY OF THE COMPANY TO PLACE ITS PRODUCTS
IN DESIRABLE SECTIONS OF ITS DEPARTMENT STORE CUSTOMERS; THE LEVEL OF SAVINGS TO
BE ACHIEVED FROM THE COMPANY'S BUSINESS RESTRUCTURING INITIATIVES AND THE
COMPANY'S SUCCESS IN INTEGRATING RECENT AND POTENTIAL FUTURE ACQUISITIONS; AND
UNEXPECTED COSTS INCURRED IN CONNECTION WITH THE CONSOLIDATION AND RELOCATION OF
THE COMPANY'S OFFICES IN STAMFORD, CONNECTICUT AND CINCINNATI, OHIO TO A NEW
FACILITY IN WHITE PLAINS, NEW YORK.
ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY
ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE FOREGOING CAUTIONARY
STATEMENTS.
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN
ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS. IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE
FACTORS SET FORTH UNDER "RISK FACTORS" BELOW SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING AN INVESTMENT IN THE SECURITIES OFFERED HEREBY. ALL INFORMATION IN
THIS PROSPECTUS REFLECTS THE COMPANY'S ACQUISITION (THE "U.S. SHOE
ACQUISITION") OF SUBSTANTIALLY ALL OF THE FOOTWEAR BUSINESS, AND THE ASSUMPTION
OF CERTAIN LIABILITIES, OF THE UNITED STATES SHOE CORPORATION ("U.S. SHOE")
EFFECTED ON MAY 23, 1995. EFFECTIVE JUNE 27, 1995, THE COMPANY'S FISCAL
YEAR-END WAS CHANGED FROM DECEMBER 31 TO THE SATURDAY CLOSEST TO JANUARY 31 OF
THE FOLLOWING YEAR. (E.G., "FISCAL 1996" IS THE YEAR ENDING FEBRUARY 1, 1997).
UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES TO THE "COMPANY" HEREIN REFER
TO NINE WEST GROUP INC. AND ITS CONSOLIDATED SUBSIDIARIES.
THE COMPANY
The Company is a leading designer, developer and marketer of quality,
fashionable women's footwear and accessories. The Company markets a full
collection of casual, career and dress footwear and accessories under multiple
brand names, each of which is targeted to a distinct segment of the women's
footwear and accessories markets, from "fashion" to "comfort" styles and from
"moderate" to "bridge" price points. In addition to its flagship Nine West
label, the Company's nationally recognized brands of footwear and handbags
include Amalfi, Bandolino, Calico, cK/Calvin Klein (under license), Easy Spirit,
Enzo Angiolini, Evan Picone (under license), 9 & Co., Pappagallo, Selby and
Westies. The Company also markets its products under the Pied a Terre and The
Shoe Studio Group Limited brands in Europe. The Company's Jervin private label
division also arranges for the purchase of footwear by major retailers and other
wholesalers for sale under the customers' own labels. Approximately 55% of the
Company's net revenues in Fiscal 1996 was generated from sales by its wholesale
division to more than 7,000 department, specialty and independent retail stores
in more than 16,000 locations worldwide, and approximately 45% of net revenues
was generated by its retail operations, which comprised 1,104 locations as of
May 3, 1997.
For the 12-month period ended May 3, 1997, the Company had $1,653.3 million
of net revenues and $240.3 million of EBITDA (as defined). Since 1992, the
Company's net revenues have grown from $461.9 million to $1,603.1 million for
the 52-week period ended February 1, 1997, a compound annual growth rate of
approximately 36%. Over the same period, EBITDA increased from $64.7 million to
$233.3 million, a compound annual growth rate of approximately 37%.
The Company's principal executive offices are located at 9 West Broad
Street, Stamford, Connecticut 06902, and the Company's telephone number is
(203) 324-7567.
BUSINESS STRENGTHS
WIDELY-RECOGNIZED BRAND NAMES. The Company's leading brands are widely
recognized throughout the United States and Canada and certain international
markets. As a result of the recognition of its brands, the Company's major
wholesale customers devote significant floor space to the Company's brands. In
addition, the Company believes the strength of its brand names has enabled the
Company to introduce new product lines and enter new markets more effectively.
HIGH QUALITY, VALUE AND STYLING OF ITS PRODUCTS. The Company's established
global sourcing relationships are important to its ability to offer high
quality, moderately priced shoes and respond quickly to changing sales and
fashion trends. The Company has sourcing relationships with Brazilian
manufacturers through its independent buying agent, its own domestic factories,
and its third-party manufacturers in Asia and Western Europe. Due to the
Company's long-standing relationships, it is able to produce high quality
products at competitive prices, and to respond quickly to changes in fashion and
consumer preferences. In developing new products, separate design teams develop
and differentiate the product lines by interpreting footwear and accessories
trends. The Company's designers work closely with merchandising, sales and
production teams to achieve the quality and style of the Company's products.
BROAD DISTRIBUTION OF ITS PRODUCTS THROUGH BOTH WHOLESALE AND RETAIL
CHANNELS. The Company has developed a well-balanced distribution network.
Approximately 55% of the Company's net revenues in Fiscal 1996 was generated
from sales by its wholesale division to more than 7,000 department, specialty
and independent retail stores in more than 16,000 locations worldwide, and
approximately 45% of net revenues was generated from sales by 1,104 of its own
retail locations. The Company markets its products to customers in over 40
countries, including Australia, Canada, Chile, China, France, Mexico and the
United Kingdom. This breadth of distribution reduces the Company's reliance on
any one department store customer.
ABILITY TO PROVIDE TIMELY AND RELIABLE DELIVERY TO ITS CUSTOMERS. The
Company utilizes fully integrated information systems to facilitate the receipt,
processing and distribution of its merchandise. The Company allows its wholesale
customers to participate in inventory management programs, enabling customers to
fill their smaller, single or multiple pair reorders in basic sizes and colors,
rather than requiring that they purchase larger case good quantities. The
Company believes its ability to offer this flexibility to its customers gives it
a significant competitive advantage and reduces the incidence of mark-down
allowances and returns.
BUSINESS STRATEGY
The Company's strategy is to leverage its strengths to enhance further its
position in both the domestic and international footwear, accessory and related
markets. The Company's objectives include: (i) increasing the global recognition
of its portfolio of brands; (ii) leveraging its brand recognition to expand its
product offerings; (iii) continuing its retail expansion across multiple store
concepts; (iv) continuing growth of its recently developed accessories business;
(v) expanding its presence in the "bridge" market through its recently acquired
cK/Calvin Klein license and (vi) continuing to pursue opportunities to expand
its business through the acquisition of new businesses and licensing
arrangements.
As part of the Company's pursuit of its goal to promote recognition of its
brands, the Company has developed and implemented an expanded marketing plan
which includes higher advertising and promotional expenditures than incurred
during prior years and global advertising campaigns shot by well-known
photographers and featuring internationally-recognized models. The Company also
believes that its expanding retail network promotes brand name recognition and
supports the merchandising of complete lines by its wholesale customers.
The Company opened its first international retail store in 1994 and today
operates 218 international locations. In the first quarter of 1997, the
Company's international revenues increased to 7% from 4% of revenues in Fiscal
1996. This growth was achieved through increased wholesale and retail expansion
internationally. In addition, the Company recently completed two acquisitions of
United Kingdom footwear and accessory retailers, Pied a Terre Group Limited
(December 1996) and The Shoe Studio Group Limited (May 1997). The Company
believes these acquisitions, which provided retail locations, management
expertise and systems, will serve as a platform for its future growth in western
Europe. Additionally, the Company purchased its Canadian licensee in 1996 and
has begun to open additional stores and expand its Canadian wholesale business.
The Company intends to pursue additional international business opportunities to
expand into new businesses and geographic areas, such as Europe, South America
and Asia.
In addition to geographic expansion, the Company is seeking to capitalize
on the strength of its brands by expanding product breadth. To this end, in
1996, the Company entered into licensing agreements with third parties to
license the Nine West brand name for legwear and jewelry and the Nine West and
Enzo Angiolini brand names for sunglasses. In 1995, the Company acquired a small
accessories business, which currently designs and manufactures handbags and
small leather goods under the Nine West, Enzo Angiolini and Easy Spirit brand
names, as the platform for its branded accessories business. Since its launch,
net revenues from the Company's accessories division have grown significantly
from Fiscal 1995 to Fiscal 1996 and the Company believes there is a significant
additional opportunity to leverage the Company's brand recognition, sourcing and
distribution to further expand the accessories business.
The Company continually evaluates potential acquisition candidates in
pursuit of its strategic initiatives and growth goals. These candidates include
international as well as product expansion opportunities, such as apparel,
accessories and other related products. The Company has not entered into any
commitments or agreements for any acquisition and there is no assurance that a
definitive acquisition agreement or letter of intent with any such parties will
be reached.
In 1996, the Company entered into a license agreement with Calvin Klein,
Inc. to produce and distribute cK/Calvin Klein footwear and accessories. Through
this agreement the Company expanded its presence in the "bridge" market, a
market in which the Company did not previously have a significant presence. The
Company plans to increase the wholesale distribution of these products to a
broader group of retailers who carry other cK/Calvin Klein products, will begin
shipping footwear and accessories to freestanding cK/Calvin Klein retail stores
and expects to open freestanding cK/Calvin Klein footwear and accessories retail
stores both domestically and internationally.
FINANCING STRATEGY
On June 26, 1996 and July 9, 1996, the Company issued and sold $185,680,000
aggregate principal amount of the Notes (the "Offering"). On July 9, 1997, the
Company issued and sold $200,000,000 aggregate principal amount of its 8-3/8%
Senior Notes due 2005 and $125,000,000 aggregate principal amount of its 9%
Senior Subordinated Notes due 2007 (the "1997 Offering") The Offering and the
1997 Offering were intended to: (i) extend debt maturities to support continued
implementation of strategic initiatives; (ii) preserve operating cash flow for
investment in the Company's business rather than for amortization requirements;
(iii) more closely match assets with liabilities; (iv) minimize floating rate
exposure on bank borrowings; and (v) provide access to new sources of capital.
The Company used the net proceeds of the Offering and the 1997 Offering to repay
certain indebtedness outstanding under its previously existing credit agreement
(the "Existing Credit Agreement"). On August 1, 1997, the Existing Credit
Agreement was amended and restated to permit the Company to borrow up to $600
million under a revolving credit facility (the "Credit Facility") with an
effective interest rate lower than or equal to the effective interest rate under
the Existing Credit Agreement.
THE OFFERING
Issuer........... Nine West Group Inc. (the "Company").
Securities
Offered.......... $185,680,000 of 5-1/2% Convertible Subordinated Notes
Due 2003 issued under an indenture (the "Indenture"),
dated as of June 26, 1996, between the Company and The
Chase Manhattan Bank (formerly known as Chemical Bank),
as trustee (the"Trustee").
Interest Payment
Dates............ January 15 and July 15 of each year.
Maturity......... July 15, 2003.
Conversion.... Convertible into Common Stock at $60.76 per share,
subject to adjustment as set forth herein at any time
through July 15, 2003. The Company may, at its option,
pay an amount in cash equal to the Market Price (as
defined herein) of the shares of Common Stock into
which such Notes are convertible in lieu of delivery of
such shares. See "Description of the Notes --
Conversion of Notes."
Redemption.... The Notes are redeemable, in whole or in part, at the
option of the Company, at any time on or after July 16,
1999, at the declining redemption prices set forth
herein, plus accrued interest. See "Description of the
Notes -- Optional Redemption by the Company."
Change
of Control....... In the event of a Change of Control (as defined
herein), Holders of the Notes have the right to require
that the Company repurchase the Notes in whole or in
part at a redemption price of 101% of the principal
amount thereof, plus accrued interest. See
"Description of the Notes -- Change of Control."
Ranking....... The Notes constitute general unsecured obligations of
the Company and are subordinated in right of payment to
all existing and future Senior Indebtedness (as defined
herein) of the Company. As of May 3, 1997, on a pro
forma basis, after giving effect to the 1997 Offering
and the use of the net proceeds therefrom, the Company
would have had approximately $343.2 million of Senior
Indebtedness outstanding. In addition, because a
substantial portion of the Company's operations is
conducted through subsidiaries, claims of holders of
indebtedness and other creditors of such subsidiaries
will have priority with respect to the assets and
earnings of such subsidiaries over the claims of
creditors of the Company, including Holders of the
Notes. As of May 3, 1997, the aggregate liabilities of
such subsidiaries were approximately $65.7 million.
The Indenture does not limit the amount of additional
indebtedness (including, without limitation, Senior
Indebtedness) that the Company can create, incur,
assume or guarantee, nor does the Indenture limit the
amount of indebtedness (including, without limitation,
Senior Indebtedness) that any subsidiary can create,
incur, assume or guarantee. See "Description of the
Notes -- Subordination."
Use of Proceeds.. The Company will not receive any of the proceeds from
the sale of any of the Notes or the Common Stock
issuable upon conversion thereof. See "Use of
Proceeds."
Listing....... The Common Stock is quoted on the NYSE under the symbol
"NIN."
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN
EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE NOTES OFFERED
HEREBY.
EFFECTS OF LEVERAGE
On July 9, 1997, the Company consummated the 1997 Offering. The net
proceeds of that offering were used to repay certain indebtedness outstanding
under the Existing Credit Agreement. After giving effect to the 1997 Offering
and the application of the net proceeds therefrom, the Company's outstanding
consolidated indebtedness on May 3, 1997 would have been approximately $649.7
million and the Company's ratio of total debt to total capitalization would have
been 63.1%. In Fiscal 1994, 1995 and 1996, the Company's ratio of earnings to
fixed charges was 10.33x, 1.66x and 3.00x, respectively. The Company's level of
indebtedness will have several important effects on its future operations,
including (i) a substantial portion of the Company's cash flow from operations
must be dedicated to the payment of interest on its indebtedness and will not be
available for other purposes, (ii) covenants contained in the Company's debt
obligations will require the Company to meet certain financial tests, and other
restrictions will limit its ability to borrow additional funds or to dispose of
assets and may affect the Company's flexibility in planning for, and reacting
to, changes in its businesses, including possible acquisition activities and
(iii) the Company's ability to obtain additional financing in the future for
working capital, capital expenditures, acquisitions, general corporate purposes
or other purposes may be impaired. The Company's ability to meet its debt
service obligations and to reduce its total indebtedness will be dependent upon
the Company's future performance, general economic conditions and financial,
business and other factors affecting the operations of the Company, many of
which are beyond its control. There can be no assurance that the Company's
future performance will not be adversely affected by some or all of these
factors.
SUBSTANTIAL COMPETITION AND CHANGING FASHION TRENDS
Competition is intense in the women's footwear business. The Company must
remain competitive in the areas of style, quality, price, comfort, brand loyalty
and customer service. The location and atmosphere of retail stores are an
additional competitive factor in the Company's retail division. The Company's
competitors include numerous manufacturers, importers and distributors, some of
which may have certain resources not available to the Company. The Company
competes with distributors that import footwear, domestic companies that have
foreign manufacturing relationships and companies that produce footwear
domestically. In its retail division, the Company's primary competition is
comprised of large national chains, department stores, specialty footwear stores
and other outlet stores. Any failure by the Company to identify and respond to
emerging fashion trends could adversely affect consumer acceptance of the
Company's brand names and product lines, which in turn could adversely affect
the Company's financial condition and results of operations. The Company
attempts to minimize the risk of changing fashion trends and product acceptance
by offering a wide assortment of dress, career and casual shoes during
particular selling seasons, approximately one-half of which are in classic
styles that the Company believes are less vulnerable to fashion trend changes.
INVESTIGATION BY THE SECURITIES AND EXCHANGE COMMISSION
On May 1, 1997, the Company learned that on April 10, 1997, the Commission
entered a formal order of investigation into, among other things, the Company's
revenue recognition policies and practices. Based on conversations with the
staff of the Commission dating back to the Fall of 1996, when an informal
investigation was commenced, the Company believes that this investigation is
focused on the revenue recognition policies and practices of certain of the
Company's divisions that were acquired from U.S. Shoe in 1995. The Company has
been cooperating fully with the staff of the Commission and intends to continue
its cooperation. Based on the limited information presently available to it, the
Company does not anticipate that the investigation will have a material adverse
financial effect on the Company. No assurance can be given, however, that the
scope of the investigation is not wider than this, or that the scope of such
investigation will not be broadened in the future, or that any such broader
investigation will not have a material adverse financial effect on the Company.
ACQUISITION INTEGRATION
The Company from time to time acquires other companies and businesses which
it believes will enhance or complement its existing business. The Company's
ability to successfully integrate the operations and assets so acquired could
require the deployment of significant management and other resources of the
Company and is subject to various factors, including (i) the Company's ability
to continue to implement such integration without unforeseen difficulty and (ii)
external events affecting business in general and the footwear industry in
particular over which the Company has no control. There can be no assurance as
to how much time will be required to complete any such integration, that the
Company will be able to successfully integrate the acquired operations and
assets with its own, that it will achieve the anticipated cost savings as a
result of such integration or that the costs of such integration will not exceed
anticipated amounts.
EXPANSION OF BUSINESS
A significant part of the Company's strategy is to expand its retailing
concepts and to continue its international retail and wholesale expansion plans.
The Company intends to accomplish such expansion by opening new stores and may
include additional acquisitions. The Company has also recently added and may
continue to add new related lines of business. In addition, the Company has
begun and expects to continue to market its products in non-U.S. markets. The
types of stores opened by the Company and the results generated by such stores,
new lines of business and new markets will depend on various factors, including,
among others, general economic and business conditions affecting consumer
spending, the performance of the Company's wholesale and retail operations, the
acceptance by consumers of the Company's retail concepts, the Company's ability
to design, manufacture and market new product lines and to penetrate new
markets, the availability of desirable locations and the ability of the Company
to negotiate acceptable lease terms for new locations, hire and train personnel
and otherwise manage such expansion, and find acceptable partners for its
international stores.
IMPACT OF BRAZILIAN AND OTHER FOREIGN OPERATIONS
Over 60% of the Company's footwear products are manufactured by more than
28 independently owned footwear manufacturers in Brazil. The Company is the
dominant and, in many cases, the exclusive customer for these manufacturers'
production. The Company believes that such Brazilian manufacturing relationships
provide a significant competitive advantage to the Company and are a major
contributor to the Company's success. Thus, the Company's future results of
operations will partly depend on maintaining its close working relationships
with its principal manufacturers, both directly and through the Company's buying
agent. Neither the buying agent nor any of its principals is affiliated with the
Company. The Company has entered into a five-year contract with the buying
agent, effective January 1, 1992, which has been extended for an additional five
years, which provides that the buying agent, its owners, employees, directors
and affiliates will not act as a buying agent for, or sell leather footwear
manufactured in Brazil to, other importers, distributors or retailers for resale
in the United States, Canada or the United Kingdom. The Company does not
maintain supply contracts with any of its manufacturers.
Historically, instability in Brazil's political and economic environment
has not had a material adverse effect on the Company's financial condition or
results of operations. The Company cannot predict, however, the effect that
future changes in economic or political conditions in Brazil could have on the
economics of doing business with its Brazilian manufacturers. Although the
Company believes that it could find alternative manufacturing sources for those
products which it currently sources in Brazil, the establishment of new
manufacturing relationships would involve various uncertainties, and the loss of
a substantial portion of its Brazilian manufacturing capacity before the
alternative sourcing relationships were fully developed could have a material
adverse effect on the Company's financial condition or results of operations.
However, as a result of the U.S. Shoe Acquisition, the Company now has
manufacturing operations in the United States and additional relationships in
other countries as potential alternative sources for its products.
The Company's footwear is also manufactured by third parties located in
China, Korea and other countries in the Far East, and in Italy, Spain, Mexico
and Uruguay. The Company's accessories are manufactured principally by
third-party manufacturers in the Far East.
The Company's business is subject to other risks of doing business abroad,
such as fluctuations in exchange rates, the imposition of additional regulations
relating to imports, including quotas, duties or taxes and other charges on
imports, and other risks relating to changes in local government administrations
and policies and resulting changes in business customs and practices. In order
to minimize the risk of exchange rate fluctuations, the Company purchases
products from Brazilian manufacturers in United States dollars and otherwise
engages in foreign currency hedging transactions. The Company cannot predict
whether additional United States or foreign customs quotas, duties, taxes or
other charges or restrictions will be imposed upon the importation of its
non-domestically produced products in the future or what effect such actions
could have on its financial condition or results of operations.
SUBORDINATION OF NOTES; ASSET ENCUMBRANCES
The indebtedness evidenced by the Notes is subordinate to the prior payment
in full of all Senior Indebtedness (as defined herein). As of May 3, 1997, on a
pro forma basis, after giving effect to the 1997 Offering and the use of the net
proceeds therefrom, the Company would have had approximately $343.2 million of
Senior Indebtedness outstanding. In addition, because a substantial portion of
the Company's operations is conducted through subsidiaries, claims of holders of
indebtedness and of other creditors of such subsidiaries will have priority with
respect to the assets and earnings of such subsidiaries over the claims of
creditors of the Company, including holders of the Notes. As of May 3, 1997,
the aggregate liabilities of such subsidiaries were approximately $65.7 million.
The Indenture does not limit the amount of additional indebtedness, including
Senior Indebtedness or pari passu indebtedness, that the Company or any of its
subsidiaries can create, incur, assume or guarantee. During the continuance of
any default (beyond any applicable grace period) in the payment of principal,
premium, interest or any other payment due on the Senior Indebtedness, no
payment of principal or interest on the Notes may be made by the Company. In
addition, upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal and
interest on the Notes is subordinated to the extent provided in the Indenture to
the prior payment in full of all Senior Indebtedness and is structurally
subordinated to claims of creditors of each subsidiary of the Company. By
reason of this subordination, in the event of the Company's dissolution, holders
of Senior Indebtedness may receive more, ratably, and Holders of the Notes may
receive less, ratably, than the other creditors of the Company. The Company's
cash flow and ability to service debt, including the Notes, are substantially
dependent upon the earnings of its subsidiaries and the distribution of those
earnings to, or upon payments by those subsidiaries to, the Company. The
ability of the Company's subsidiaries to make such distributions or payments may
be subject to contractual or statutory restrictions. See "Description of the
Notes -- Subordination."
The Company's obligations under the Credit Facility are secured by security
interests in substantially all of the current and future assets of the Company
(other than certain receivables) and its domestic subsidiaries (including a
pledge of all of the issued and outstanding shares of capital stock of the
Company's domestic subsidiaries). In the event of a default on secured
indebtedness (whether as a result of the failure to comply with a payment or
other covenant, a cross-default, or otherwise), the parties granted such
security interests will have a prior secured claim on the assets of the Company.
Moreover, if such parties should attempt to foreclose on their collateral, it is
possible that there would be insufficient assets remaining after satisfaction in
full of all such indebtedness to satisfy in full the claims of the holders of
the Notes and the Company's financial condition and the value of the Notes could
be materially adversely affected.
REPURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL;
AVAILABILITY OF FUNDS
In the event of a Change of Control (as defined herein), each Holder of
Notes has the right to require that the Company repurchase the Notes in whole or
in part at a redemption price of 101% of the principal amount thereof, plus
accrued interest to the date of purchase. If a Change of Control were to occur,
there can be no assurance that the Company would have sufficient funds to pay
such redemption price for all Notes tendered by the holders thereof. See
"Subordination of Notes" above. The Company's ability to pay such redemption
price is, and may in the future be, limited by the terms of the Credit Facility
or other agreements.
SECURITIES TRADING; POSSIBLE VOLATILITY OF PRICES
The Company does not intend to list the Notes on a securities exchange.
The Common Stock is quoted on the NYSE. There can be no assurance that an
active trading market for the Notes will develop or be sustained. There can be
no assurance as to the liquidity of investments in the Notes or as to the price
Holders of the Notes may realize upon the sale of the Notes. These prices are
determined in the marketplace and may be influenced by many factors, including
the liquidity of the market for the Notes and Common Stock, the market price of
the Common Stock, interest rates, investor perception of the Company and general
economic and market conditions.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Notes or the
Common Stock issuable upon conversion thereof by the Selling Holders.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
13 Weeks Ended Year Ended
---------------- ------------------------------------------------------------------
May 3 May 4 February 1 February 3 December 31 December 31 December 31
1997 1996 1997 1996 1994 1993 1992
Ratio of
Earnings to
Fixed Charges 2.49 2.54 3.00 1.66 10.33 8.98 5.34
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges, earnings
consists of earnings before income taxes and fixed charges. Fixed charges
consists of interest expense plus the portion of rental expense under operating
leases that has been deemed by the Company to be representative of the interest
factor (approximately one-third of rental expense).
SELLING HOLDERS
The Notes were initially issued and sold pursuant to a Purchase Agreement,
dated as of June 20, 1996, between the Company, and Bear Stearns & Co., Inc. and
Morgan Stanley & Co. Incorporated (together, the "Initial Purchasers"). The
Notes were acquired from the Initial Purchasers by the Selling Holders in
compliance with Rule 144A, Regulation D or Regulation S under the Securities
Act, or in other permitted resale transactions from the Initial Purchasers or
holders who acquired such Notes from the Initial Purchasers or their successors
in further permitted resale transactions exempt from registration under the
Securities Act. The Company agreed to indemnify and hold the Initial Purchasers
harmless against certain liabilities under the Securities Act that may arise in
connection with the sale of the Notes by the Initial Purchasers.
Except as otherwise indicated, the table below sets forth certain
information with respect to the Securities as of August 18, 1997. The term
"Selling Holders" includes the beneficial owners of such Securities listed below
and their respective transferees, pledgees, donees or their successors. To the
knowledge of the Company and based on certain representations made by the
Selling Holders, other than as a result of the ownership of the Securities
indicated below, none of the Selling Holders has had any material relationship
with the Company or any of its affiliates within the past three years.
<TABLE>
<S> <C> <C>
Aggregate Principal Amount Number of Shares of
of Notes Owned and Common Stock That
Name of Selling Holder That May Be Sold May Be Sold
- ---------------------- ---------------- -----------
Allstate Insurance Company $2,900,000 47,728
Alpine Associates $6,000,000 98,749
Argent Classic Convertible
Arbitrage Fund, L.P. $1,000,000 16,458
Bank of America Convertible Securities Fund (1) $270,000 4,443
Bank of America Employee Benefit
Convertible Fund (1) $155,000 2,551
Bank of Tokyo-Mitsubishi Pension &
Investment Dept. $600,000 9,874
Bank of Tokyo-Trust $175,000 2,880
Bankers Life & Casualty-Convert $501,000 8,245
Bankers Trust International PLC $5,000,000 82,290
Bear Stearns International Ltd. (2)(3) $1,400,000 23,041
Bond Fund Series-Oppenheimer Bond
Fund for Growth $3,250,000 53,489
BT Securities Corporation $5,000,000 82,290
Capitol American-Convert $249,000 4,098
CFW-C, L.P. $2,000,000 32,916
Cincinnati Bell Telephone Convertible
Value Fund $635,000 10,450
Dean Witter Convertible Securities
Trust $7,500,000 123,436
Dean Witter Income Builder Fund $4,300,000 70,770
Dean Witter Variable Series Income Builder Fund $350,000 5,760
Delta Air Lines Master Trust $2,035,000 33,492
Fiduciary Trust Company International $1,610,000 26,497
Franklin Investors Securities Trust -
Convertible Securities Funds $1,500,000 24,687
Highbridge Capital Corporation,
Amalgamated Gadget, L.P. as agent $400,000 6,583
Highbridge Capital Corporation $2,000,000 32,916
Hughes Aircraft Company Master Retirement Trust $1,055,000 17,363
J.P. Morgan & Co. Incorporated $10,020,000 164,911
Laterman & Company $916,000 15,075
Laterman Strategics 90s L.P. $992,000 16,326
Lincoln National Convertible Securities Fund $3,000,000 49,374
Lincoln National Insurance Co. $6,350,000 104,509
Massachusetts Mutual Life Insurance Company $250,000 4,114
McMahan Securities Company, L.P. $1,200,000 19,749
Medical Malpractice Insurance Association $135,000 2,221
Merrill Lynch Capital Markets PLC (3)(4) $2,250,000 37,030
Merrill Lynch, Pierce, Fenner & Smith
Incorporated (3)(4) $1,937,000 31,879
The Minnesota Mutual Life Insurance Company $475,000 7,817
Municipal Employees Retirement System
of Michigan $1,455,000 23,946
OCM Convertible Trust $3,290,000 54,147
Offshore Strategies Ltd. $1,142,000 18,795
Orrington International Fund, LTD $225,000 3,703
Orrington Investments Limited Partnership $275,000 4,526
Pacific Horizon Capital Income Fund $4,400,000 72,416
Pacific Innovations Trust Capital Income Fund $100,000 1,645
Paloma Securities L.L.C. $50,000 822
Partner Reinsurance Company Ltd. $240,000 3,949
Q Investments, L.P. $600,000 9,874
Salomon Brothers Capital Structure Arbitrage
(U.S.) - L.L.P. $325,000 5,348
Salomon Brothers Diversified Arbitrage
Strategies Fund Limited $175,000 2,880
Salomon Brothers Equity Arbitrage
Finance Limited I $500,000 8,229
SMM Company B.V. $4,050,000 66,655
Societe Generale Securities Corp. $3,500,000 57,603
SoGen International Fund Inc. $4,500,000 74,061
State of Connecticut Combined
Investment Funds $2,540,000 41,803
State Employees Retirement Fund of the
State of Delaware $810,000 13,331
TCW Convertible Securities Fund $3,005,000 49,456
TCW Convertible Value Fund $1,170,000 19,256
TCW/DW Income & Growth Fund $355,000 5,842
Tom Vantage Fund Ltd. $1,400,000 23,078
TQA Arbitrage Fund, L.P. $885,000 14,565
TQA Leverage Fund, L.P. $640,000 10,533
TQA Vantage Fund, Ltd. $1,680,000 27,649
TQA Vantage Plus, Ltd. $300,000 4,937
Transport Life - Convert $249,000 4,098
United National Insurance $100,000 1,645
Vanguard Convertible Securities Fund, Inc. $1,790,000 29,460
Walker Arts Center $300,000 4,937
Weirton Trust Convertible $750,000 12,343
- -------------------------
</TABLE>
(1) An affiliate of Bank of America Convertible Securities Fund and Bank of
America Employee Benefit Convertible Fund is a lender under the Company's Credit
Facility.
(2) Bear, Stearns & Co. Inc., an affiliate of Bear Stearns International
Ltd., is one of the Initial Purchasers of the Notes.
(3) Bear, Stearns & Co. Inc., an affiliate of Bear Stearns International
Ltd., and Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of
Merrill Lynch Capital Markets PLC, have provided from time to time, and may
continue to provide in the future, underwriting, investment banking and
investment advisory services to the Company and its affiliates, for which such
persons have received and will receive customary fees and commissions.
(4) Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of
Merrill Lynch Capital Markets PLC, is one of the Initial Purchasers of the
Notes.
The preceding table has been prepared based on information furnished to the
Company by the Depositary Trust Company New York, New York ("DTC") and by or on
behalf of the Selling Holders. With respect to each Selling Holder, the
principal amount set forth may have increased or decreased since the information
was furnished, and there may be additional Selling Holders of which the Company
is unaware.
In view of the fact that Selling Holders may offer all or a portion of the
Notes or shares of Common Stock held by them pursuant to this offering, and
because this offering is not being underwritten on a firm commitment basis, no
estimate can be given as to the amount of Notes or the number of shares of
Common Stock that will be held by the Selling Holders after completion of this
offering. In addition, the Selling Holders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Notes since the
date on which they provided information regarding their Notes, in transactions
exempt from the registration requirements of the Securities Act.
Information concerning the Selling Holders may change from time to time and
any such changed information that the Company becomes aware of will be set forth
in supplements to this Prospectus if and when necessary. In addition, the per
share conversion price, and the number of shares issuable upon conversion of the
Notes, is subject to adjustment under certain circumstances. Accordingly, the
aggregate principal amount of Notes and the number of shares of Common Stock
issuable upon conversion thereof offered hereby may increase or decrease. As of
the date of this Prospectus, the aggregate principal amount of Notes outstanding
is $185,680,000.
DESCRIPTION OF THE NOTES
The Notes were issued under the Indenture, a copy of which has been filed
with the Commission as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Notes and the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
all the provisions of the Notes and the Indenture, including the definitions
therein of certain terms which are not otherwise defined in this Prospectus and
those terms made a part of the Indenture by reference to the Trust Indenture
Act. Wherever particular provisions or defined terms of the Indenture (or of the
form of Notes which is a part thereof) are referred to, such provisions or
defined terms are incorporated herein by reference in their entirety. As used in
this "Description of the Notes" section, the "Company" refers to Nine West Group
Inc. and does not, unless the context otherwise indicates, include its
subsidiaries.
General
The Notes represent general unsecured subordinated obligations of the
Company and are convertible into Common Stock as described below under the
subheading "Conversion of Notes." The Notes are limited to $185,680,000
aggregate principal amount, have been issued in fully registered form only in
denominations of $1,000 in principal amount or any multiple thereof and mature
on July 15, 2003, unless earlier redeemed at the option of the Company or at the
option of the Holder upon a Change of Control.
The Indenture does not contain any financial covenants or any restrictions
on the payment of dividends, the repurchase of securities of the Company or the
incurrence of debt by the Company or any of its subsidiaries.
The Notes bear interest from the date of original issue at 5-1/2% per
annum, payable semi-annually on January 15 and July 15 to Holders of record at
the close of business on the preceding December 15 and June 15, respectively.
Interest will be computed on the basis of a 360-day year composed of twelve
30-day months.
Unless other arrangements are made, interest is to be paid by check mailed
to Holders entitled thereto; provided that, at the option of any Holder of Notes
with an aggregate principal amount equal to or in excess of $5,000,000, interest
on such Holder's Notes shall be paid by wire transfer in immediately available
funds. Principal will be payable, and the Notes may be presented for
conversion, registration of transfer and exchange, without service charge, at
the office of the Trustee in New York, New York.
Form, Denomination and Registration
The Notes have been issued in fully registered form only, in denominations
of $1,000 in principal amount and integral multiples thereof. Except as
described in the next paragraph, the Notes will be represented by a single,
permanent global Note, in definitive, fully registered form without interest
coupons (the "Global Note") and will be deposited with the Trustee as custodian
for The Depositary Trust Company, New York, New York ("DTC") and registered in
the name of Cede & Co. ("Cede")as DTC's nominee. Except as set forth below, the
Global Notes may be transferred, in whole or in part, only to another nominee of
DTC or to a successor of DTC or its nominee.
Holders of Notes who elect to take physical delivery of their certificates
instead of holding their interest through the Global Note (collectively referred
to herein as the "Non-Global Holders") will be issued a certificated note in
registered form (a "Certificated Note"). Upon the transfer of any Certificated
Note initially issued to a Non-Global Holder, such Certificated Note will,
unless the transferee requests otherwise or a Global Note has previously been
exchanged in whole for a Certificated Note, be exchanged for an interest in such
Global Note.
The Holders of Notes may hold their interests in the Global Note directly
through DTC if such Holder is a participant in DTC, or indirectly through
organizations which are participants in DTC (the "Participants"). Transfers
between Participants will be effected in the ordinary way in accordance with DTC
rules and will be settled in same-day funds. The laws of some states require
that certain persons take physical delivery of securities in definitive form.
Consequently, the ability to transfer beneficial interests in the Global Notes
to such persons may be limited.
The Holders of Notes who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is
the registered owner of the Global Note, Cede for all purposes will be
considered the sole holder of the Global Note.
Payment of interest on and the redemption price (upon redemption at the
option of the Company or at the option of the Holder upon a Change of Control)
of the Global Note will be made to Cede, the nominee for DTC, as the registered
owner of the Global Note, by wire transfer of immediately available funds.
Neither the Company, the Trustee nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
With respect to any payment of interest on and the redemption price (upon
redemption at the option of the Company or at the option of the Holder upon a
Change of Control) of the Global Note, DTC's practice is to credit Participants'
accounts on the payment date therefor with payments in amounts proportionate to
their respective beneficial interest in the Notes represented by the Global Note
as shown on the records of DTC, unless DTC has reason to believe that it will
not receive payment on such payment date. Payments by Participants to owners of
beneficial interests in Notes represented by the Global Note held through such
participants will be the responsibility of such Participants, as is now the case
with securities held for the accounts of customers registered in "street name."
Because DTC can only act on behalf of the Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in Notes represented by the Global Note to pledge
such interest to persons or entities that do not participate in the DTC system,
or otherwise take actions in respect of such interest, may be affected by the
lack of a physical certificate evidencing such interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 90 days, the Company
will cause Notes to be issued in definitive form in exchange for the Global
Note.
Conversion of Notes
The Holders of Notes are entitled, at any time through the close of
business on July 15, 2003, subject to prior redemption, to convert any Notes or
portions thereof (in denominations of $1,000 in principal amount or multiples
thereof) into Common Stock at a conversion price of $60.76 per share, subject to
adjustment and to the Company's cash conversion option as described below;
provided that in the case of Notes called for redemption, conversion rights will
expire immediately prior to the close of business on the date fixed for
redemption, unless the Company defaults in payment of the redemption price. A
Note (or portion thereof) in respect of which a Holder is exercising its option
to require redemption upon a Change of Control may be converted only if such
Holder withdraws its election to exercise such redemption option in accordance
with the terms of the Indenture.
In lieu of delivering shares of Common Stock (or other securities into
which the Notes are then convertible) upon conversion of Notes, the Company may
pay to the Holder converting such Notes an amount in cash equal to the Market
Price of the shares of Common Stock (or other securities) into which such Notes
are then convertible, plus any property or assets into which such Notes are then
convertible. "Market Price" means the average of the closing prices of the
Common Stock (or other securities into which the Notes are then convertible) for
the ten trading day period (appropriately adjusted to take into account the
occurrence during such period of certain events that would result in an
adjustment of the conversion price) commencing on the first trading day after
delivery of notice that the Company has elected to pay cash in lieu of
delivering Common Stock. Any cash paid in lieu of Common Stock will generally
result in taxable gain or loss to the Holder converting such Notes.
Except as described below, no adjustment will be made on conversion of any
Notes for interest accrued thereon or for dividends paid on any Common Stock
issued. Holders of the Notes at the close of business on a record date will be
entitled to receive the interest payable on such Note on the corresponding
interest payment date. However, Notes surrendered for conversion after the
close of business on a record date and before the opening of business on the
corresponding interest payment date must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount so converted (unless such Note is subject to redemption on a redemption
date between such record date and the corresponding interest payment date). The
interest payment with respect to a Note called for redemption on a date during
the period from the close of business on or after any record date to the opening
of business on the business day following the corresponding payment date will be
payable on the corresponding interest payment date to the registered Holder at
the close of business on that record date (notwithstanding the conversion of
such Note before the corresponding interest payment date) and a Holder of Notes
who elects to convert need not include funds equal to the interest paid. The
Company is not required to issue fractional shares of Common Stock upon
conversion of Notes and, in lieu thereof, will pay a cash adjustment based upon
the closing price of the Common Stock on the last business day prior to the date
of conversion.
The conversion price is subject to adjustment (under formulae set forth in
the Indenture) upon the occurrence of certain events, including: (i) the
issuance of Common Stock as a dividend or distribution on the outstanding Common
Stock, (ii) the issuance to all holders of Common Stock of certain rights or
warrants to purchase Common Stock at less than the current market price, (iii)
certain subdivisions, combinations and reclassifications of Common Stock, (iv)
distributions to all holders of Common Stock of capital stock of the Company
(other than Common Stock) or evidences of indebtedness of the Company or assets
(including securities, but excluding those dividends, rights, warrants and
distributions referred to above and dividends and distributions in connection
with the liquidation, dissolution or winding up of the Company and dividends and
distributions paid exclusively in cash), (v) distributions consisting
exclusively of cash (excluding any cash portion of distributions referred to in
clause (iv) or in connection with a consolidation, merger or sale of assets of
the Company as referred to in clause (ii) in the second paragraph below) to all
holders of Common Stock in an aggregate amount that, together with (x) all other
such all-cash distributions made within the preceding 12 months in respect of
which no adjustments has been made and (y) any cash and the fair market value of
other consideration payable in respect of any tender offers by the Company or
any of its subsidiaries for Common Stock concluded within the preceding 12
months in respect of which no adjustment has been made, exceeds 20% of the
Company's market capitalization (being the product of the then current market
price of the Common Stock times the number of shares of Common Stock then
outstanding) on the record date for such distribution and (vi) the purchase of
Common Stock pursuant to a tender offer made by the Company or any of its
subsidiaries which involves an aggregate consideration that, together with (x)
any cash and the fair market value of any other consideration payable in any
other tender offer by the Company or any of its subsidiaries for Common Stock
expiring within the 12 months preceding such tender offer in respect of which no
adjustment has been made and (y) the aggregate amount of any such all-cash
distributions referred to in clause (v) above to all holders of Common Stock
within the 12 months preceding the expiration of such tender offer in respect of
which no adjustments have been made, exceeds 20% of the Company's market
capitalization on the expiration of such tender offer. No adjustment of the
conversion price will be made for shares issued pursuant to a plan for
reinvestment of dividends or interest.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing. No
adjustment in the conversion price will be required unless such adjustment would
require a change of a least 1% in the conversion price then in effect; provided
that any adjustment that would otherwise be required to be made shall be carried
forward and taken into account in any subsequent adjustment.
In the case of (i) any reclassification or change of the Common Stock
(other than changes in par value or from par value to no par value or resulting
from a subdivision or a combination) or (ii) a consolidation or merger involving
the Company or a sale or conveyance to another corporation of the property and
assets of the Company as an entirety or substantially as an entirety, in each
case as a result of which holders of Common Stock shall be entitled to receive
stock, other securities, other property or assets (including cash) with respect
to or in exchange for such Common Stock, the Holders of the Notes then
outstanding will be entitled thereafter to convert such Notes into the kind and
amount of shares of stock, other securities or other property or assets which
they would have owned or been entitled to receive upon such reclassification,
change, consolidation, merger, sale or conveyance had such Notes been converted
into Common Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance assuming that a Holder of Notes would
not have exercised any rights of election as to the stock, other securities or
other property or assets receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the conversion price, the
Holders of Notes may, in certain circumstances, be deemed to have received a
distribution subject to the United States income tax as a dividend; in certain
other circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock.
The Company from time to time may, to the extent permitted by law, reduce
the conversion price by any amount for any period of at least 20 days, in which
case the Company shall give at least 15 days' notice of such decrease, if the
Board of Directors has made a determination that such decrease would be in the
best interests of the Company, which determination shall be conclusive. The
Company may, at its option, make such reductions in the conversion price, in
addition to those set forth above, as the Company deems advisable to avoid or
diminish any income tax to its stockholders resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for United States federal income tax purposes.
Subordination
The payment of principal of, premium, if any, and interest on the Notes is,
to the extent set forth in the Indenture, subordinated in right of payment to
the prior payment in full of all Senior Indebtedness. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
related to the Company or its property, in an assignment for the benefit of
creditors or any marshaling of the Company's assets and liabilities, the holders
of all Senior Indebtedness will first be entitled to receive payment in full of
all amounts due or to come due thereon before the Holders of the Notes will be
entitled to receive any payment in respect of the principal of, premium, if any,
or interest on the Notes (except that Holders of Notes may receive securities
that are subordinated at least to the same extent as the Notes to Senior
Indebtedness and any securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment of principal, premium, if any, or
interest on the Notes (except in such subordinated securities) and may not
repurchase, redeem or otherwise retire any Notes if (a) a default in the payment
of the principal of, premium, if any, or interest on Senior Indebtedness occurs
and is continuing beyond any applicable period of grace (a "payment default") or
(b) any other default occurs and is continuing with respect to Senior
Indebtedness that permits holders of the Senior Indebtedness as to which such
default relates to accelerate its maturity (a "non-payment default") and the
Trustee receives a notice of such default (a "Payment Blockage Notice") from the
representative or representatives of holders of at least a majority in principal
amount of Senior Indebtedness then outstanding. Payments on the Notes may and
shall be resumed (i) in the case of a payment default, upon the date on which
such default is cured or waived, or (ii) in the case of a non-payment default,
179 days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Senior Indebtedness has been accelerated.
No new period of payment blockage may be commenced within 360 days after the
receipt by the Trustee of any prior Payment Blockage Notice. No non-payment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or waived for
a period of not less than 180 days.
"Senior Indebtedness" with respect to the Notes means the principal of,
premium, if any, and interest on, and any fees, costs, expenses and any other
amounts (including indemnity payments) related to the following, whether
outstanding on the date of the Indenture or thereafter incurred or created: (a)
indebtedness, matured or unmatured, whether or not contingent, of the Company
for money borrowed evidenced by notes or other written obligations, (b) any
interest rate contract, interest rate swap agreement or other similar agreement
or arrangement designed to protect the Company or any of its subsidiaries
against fluctuations in interest rates, (c) indebtedness, matured or unmatured,
whether or not contingent, of the Company evidenced by notes, debentures, bonds
or similar instruments or letters of credit (or reimbursement agreements in
respect thereof), (d) obligations of the Company as lessee under capitalized
leases, (e) indebtedness of others of any of the kinds described in the
preceding clauses (a) through (d) assumed or guaranteed by the Company and (f)
renewals, extensions, modifications, amendments and refundings of, and
indebtedness and obligations of a successor person issued in exchange for or in
replacement of, indebtedness or obligations of the kinds described in the
preceding clauses (a) through (e) unless the agreement pursuant to which any of
such indebtedness described in clauses (a) through (e) is created, issued,
assumed or guaranteed expressly provides that such indebtedness is not senior or
superior in right of payment to the Notes; provided, however, that the following
shall not constitute Senior Indebtedness: (i) any indebtedness or obligation of
the Company in respect of the Notes; (ii) any indebtedness of the Company to any
of its subsidiaries or other affiliates; (iii) any indebtedness that is
subordinated or junior in any respect to any other indebtedness of the Company
other than Senior Indebtedness; and (iv) any indebtedness incurred for the
purchase of goods or materials in the ordinary course of business.
In the event that the Trustee (or paying agent if other than the Trustee)
or any Holder receives any payment of principal or interest with respect to the
Notes at a time when such payment is prohibited under the Indenture, such
payment shall be held in trust for the benefit of, and shall be paid over and
delivered to, the holders of Senior Indebtedness or their representative as
their respective interests may appear. After all Senior Indebtedness is paid in
full and until the Notes are paid in full, Holders shall be subrogated (equally
and ratably with all other indebtedness pari passu with the Notes) to the rights
of holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the Holders
have been applied to the payment of Senior Indebtedness.
As of May 3, 1997, on a pro forma basis, after giving effect to the 1997
Offering and the use of the net proceeds therefrom, the Company would have had
approximately $343.2 million in principal amount of indebtedness that would be
considered outstanding Senior Indebtedness under the Credit Facility. Any
additional borrowing under the Credit Facility would constitute Senior
Indebtedness and would rank prior in right of payment to the Notes,
notwithstanding that it is incurred subsequent to the issuance of the Notes. In
addition, the Company expects from time to time to incur indebtedness
constituting Senior Indebtedness other than debt under the Credit Facility. The
Indenture does not prohibit or limit the incurrence of any Senior Indebtedness
or pari passu indebtedness.
In addition, because a substantial portion of the Company's operations is
conducted through subsidiaries, claims of holders of indebtedness and other
creditors of such subsidiaries will have priority with respect to the assets and
earnings of such subsidiaries over the claims of creditors of the Company,
including Holders of the Notes. As of May 3, 1997, the aggregate liabilities of
such subsidiaries were approximately $65.7 million. The Indenture does not
limit the amount of indebtedness that the Company or any of its subsidiaries can
create, incur, assume or guarantee.
Because of these subordination provisions, in the event of a liquidation or
insolvency of the Company or any of its subsidiaries, Holders of Notes may
recover less, ratably, than the holders of Senior Indebtedness.
Optional Redemption by the Company
The Notes are not redeemable at the option of the Company prior to July 16,
1999. At any time on or after that date, the Notes may be redeemed at the
Company's option on at least 30 but not more than 60 days' notice, in whole at
any time or in part from time to time, at the following prices (expressed in
percentages of the principal amount), together with accrued interest to the date
fixed for redemption, if redeemed during the 12-month period beginning:
Date Redemption Price
---- ----------------
July 16, 1999 102.75%
July 15, 2000 101.83%
July 15, 2001 100.92%
On or after July 15, 2002 100.00%
If fewer than all the Notes are to be redeemed, the Trustee will select the
Notes to be redeemed in principal amounts of $1,000 or integral multiples
thereof by lot or, in its discretion, on a pro rata basis. If any Note is to be
redeemed in part only, a new Note or Notes in principal amount equal to the
unredeemed principal portion thereof will be issued. If a portion of a Holder's
Notes is selected for partial redemption and such Holder converts a portion of
such Notes, such converted portion shall be deemed to be taken from the portion
selected for redemption. No sinking fund is provided for the Notes.
Change of Control
Upon the occurrence of a Change of Control, each Holder of Notes has the
right to require that the Company repurchase such Holder's Notes in whole or in
part in integral multiples of $1,000, at a purchase price in cash in an amount
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest to the date of purchase, pursuant to an offer (the "Change of Control
Offer") made in accordance with the procedures described below and the other
provisions in the Indenture.
A "Change of Control" means an event or series of events in which (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) acquires "beneficial ownership" (as determined in accordance with
Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of
the total Voting Stock of the Company at an Acquisition Price (each term as
defined below) less than the conversion price then in effect with respect to the
Notes and (ii) the holders of the Common Stock receive consideration which is
not all or substantially all common stock that is (or upon consummation of or
immediately following such event or events will be) listed on a United States
national securities exchange or approved for quotation on the NASDAQ National
Market or any similar United States system of automated dissemination of
quotations of securities' prices; provided, however, that any such person or
group shall not be deemed to be the beneficial owner of, or to beneficially own,
any Voting Stock tendered in a tender offer until such tendered Voting Stock is
accepted for purchase under the tender offer. "Voting Stock" means stock of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency). "Acquisition Price" means
the weighted average price paid by the person or group in acquiring the Voting
Stock.
Within 30 days following any Change of Control, the Company shall send by
first-class mail, postage prepaid, to the Trustee and to each Holder of Notes,
at such Holder's address appearing in the security register, a notice stating,
among other things, that a Change of Control has occurred, the purchase price,
the purchase date, which shall be a business day no earlier than 30 days nor
later than 60 days from the date such notice is mailed, and certain other
procedures that a Holder of Notes must follow to accept a Change of Control
Offer or to withdraw such acceptance.
The Company will comply, to the extent applicable, with the requirements of
Rule 13e-4 under the Exchange Act and other securities laws or regulations in
connection with the repurchase of the Notes as described above.
The occurrence of certain of the events that would constitute a Change of
Control may constitute a default under the Credit Facility. Future indebtedness
of the Company may contain prohibitions of certain events which would constitute
a Change of Control or require the Company to offer to redeem such indebtedness
upon a Change of Control. Moreover, the exercise by the Holders of Notes of
their right to require the Company to purchase the Notes could cause a default
under such indebtedness, even if the Change of Control itself does not, due to
the financial effect of such purchase on the Company. Finally, the Company's
ability to pay cash to Holders of Notes upon a purchase may be limited by the
Company's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
purchases. Furthermore, the Change of Control provisions may in certain
circumstances make more difficult or discourage a takeover of the Company and
the removal of the incumbent management.
Merger, Consolidation and Sale of Assets
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to any person unless: (i)
either the Company is the resulting, surviving or transferee person (the
"Successor Company") or the Successor Company is a person organized and existing
under the laws of the United States or any State thereof or the District of
Columbia, and the Successor Company (if not the Company) expressly assumes by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Indenture and the Notes, including the conversion rights described above under
"-- Conversion of Notes," (ii) immediately after giving effect to such
transaction no Event of Default has occurred and is continuing and (iii) the
Company delivers to the Trustee an Officers' Certificate and an opinion of
counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with the Indenture.
Events of Default and Remedies
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any, on the Notes when due at
maturity, upon redemption or otherwise, including failure by the Company to
purchase the Notes when required as described under "-- Change of Control"
(whether or not such payment shall be prohibited by the subordination provisions
of the Indenture); default for 30 days in payment of any installment of interest
on the Notes (whether or not such payment shall be prohibited by the
subordination provisions of the Indenture); default by the Company for 90 days
after notice in the observance or performance of any other covenants in the
Indenture; or certain events involving bankruptcy, insolvency or reorganization
of the Company. The Indenture provides that the Trustee may withhold notice to
the Holders of Notes of any default (except in payment of principal, premium, if
any, or interest with respect to the Notes) if the Trustee considers it in the
interest of the Holders of Notes to do so.
The Indenture provides that if any Event of Default shall have occurred and
be continuing, the Trustee or the Holders of not less than 25% in principal
amount of the Notes then outstanding may declare the principal of and premium,
if any, on the Notes to be due and payable immediately, but if the Company shall
cure all defaults (except the nonpayment of interest on, premium, if any, and
principal of any Notes which shall have become due by acceleration) and certain
other conditions are met, such declaration may be canceled and past defaults may
be waived by the Holders of a majority in principal amount of Notes then
outstanding.
The Holders of a majority in principal amount of the Notes then outstanding
have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, subject to certain
limitations specified in the Indenture. The Indenture provides that, subject to
the duty of the Trustee following an Event of Default to act with the required
standard of care, the Trustee will not be under an obligation to exercise any of
its rights or powers under the Indenture at the request or direction of any of
the Holders, unless the Trustee receives satisfactory indemnity against any
associated loss, liability or expense.
Satisfaction and Discharge; Defeasance
The Indenture will cease to be of further effect as to all outstanding
Notes (except as to (i) rights of holders of Notes to receive payments of
principal of, premium, if any, and interest on, the Notes, (ii) rights of
holders of Notes to convert to Common Stock, (iii) the Company's right of
optional redemption, (iv) rights of registration of transfer and exchange, (v)
substitution of apparently mutilated, defaced, destroyed, lost or stolen Notes,
(vi) rights, obligations and immunities of the Trustee under the Indenture and
(vii) rights of the holders of Notes as beneficiaries of the Indenture with
respect to the property so deposited with the Trustee payable to all or any of
them), if (A) the Company will have paid or caused to be paid the principal of,
premium, if any, and interest on the Notes as and when the same will have become
due and payable or (B) all outstanding Notes (except lost, stolen or destroyed
Notes which have been replaced or paid) have been delivered to the Trustee for
cancellation or (C) (x) the Notes not previously delivered to the Trustee for
cancellation will have become due and payable or are by their terms to become
due and payable within one year or are to be called for redemption under
arrangements satisfactory to the Trustee upon delivery of notice and (y) the
Company will have irrevocably deposited with the Trustee, as trust funds, cash,
in an amount sufficient to pay principal of and interest on the outstanding
Notes, to maturity or redemption, as the case may be. Such trust may only be
established if such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument pursuant to which the
Company is a party or by which it is bound and the Company has delivered to the
Trustee an Officers' Certificate and an opinion of counsel, each stating that
all conditions related to such defeasance have been complied with.
The Indenture will also cease to be in effect (except as described in
clauses (i) through (vii) in the immediately preceding paragraph) and the
indebtedness on all outstanding Notes will be discharged on the 123rd day after
the irrevocable deposit by the Company with the Trustee, in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
Notes, of cash, U.S. Government Obligations (as defined in the Indenture) or a
combination thereof, in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay the principal of,
premium, if any, and interest on the Notes then outstanding in accordance with
the terms of the Indenture and the Notes ("legal defeasance"). Such legal
defeasance may only be effected if (i) such deposit will not result in a breach
or violation of, or constitute a default under, any agreement or instrument to
which the Company is a party or by which it is bound, (ii) the Company has
delivered to the Trustee an opinion of counsel stating that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, based
thereon, the holders of the Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge by the Company and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been the case
if such deposit, defeasance and discharge had not occurred, (iii) the Company
has delivered to the Trustee an opinion of counsel to the effect that after the
123rd day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and (iv) the Company has delivered to the
Trustee an opinion of counsel stating that all conditions related to the
defeasance have been complied with.
The Company may also be released from its obligations under the covenants
described above under "Change of Control" and "Merger, Consolidation and Sale of
Assets" with respect to the Notes outstanding on the 123rd day after the
irrevocable deposit by the Company with the Trustee, in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
Notes, of cash, U.S. Government Obligations or a combination thereof, in an
amount sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, to pay the principal of, premium, if any, and interest on the Notes
then outstanding in accordance with the terms of the Indenture and the Notes
("covenant defeasance"). Such covenant defeasance may only be effected if (i)
such deposit will not result in a breach or violation of, or constitute a
default under, any agreement or instrument to which the Company is a party or by
which it is bound, (ii) the Company has delivered to the Trustee an opinion of
counsel to the effect that the Holders of Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and covenant
defeasance by the Company and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been the case if
such deposit and covenant defeasance had not occurred, (iii) the Company has
delivered to the Trustee an opinion of counsel to the effect that after the
123rd day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and (iv) the Company has delivered to the
Trustee an Officers' Certificate and an opinion of counsel stating that all
conditions related to the covenant defeasance have been complied with. Following
such covenant defeasance, the Company will no longer be required to comply with
the obligations described above under "Merger, Consolidation and Sale of Assets"
and will have no obligation to repurchase the Notes pursuant to the provisions
described under "Change of Control."
Notwithstanding any satisfaction and discharge or defeasance of the
Indenture, the obligations of the Company described above under "Conversion of
Notes" will survive to the extent provided in the Indenture until the Notes
cease to be outstanding.
Modifications of the Indenture
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in principal amount
of the Notes at the time outstanding, to modify the Indenture or any
supplemental indenture or the rights of the Holders of Notes, except that no
such modification shall (i) extend the fixed maturity of any Note, reduce the
rate or extend the time of payment of interest thereon, reduce the principal
amount thereof or premium, if any, thereon, reduce any amount payable upon
redemption thereof, change the obligation of the Company to make redemption of
any Note upon the happening of a Change of Control, impair or affect the right
of a Holder to institute suit for the payment thereof, change the currency in
which the Notes are payable, modify the subordination provisions of the
Indenture in a manner adverse to the Holders of Notes or impair the right to
convert the Notes into Common Stock subject to the terms set forth in the
Indenture, without the consent of the Holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, without the consent of the Holders of
all of the Notes then outstanding.
Concerning the Trustee
The Chase Manhattan Bank (formerly known as Chemical Bank), the Trustee
under the Indenture, has been appointed by the Company as the paying agent,
conversion agent, registrar and custodian with regard to the Notes. The Trustee
and/or its affiliates may in the future provide banking and other services to
the Company in the ordinary course of their respective businesses.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock and 25,000,000 shares of preferred stock, $.01 par value per
share (the "Preferred Stock"). None of the Preferred Stock is outstanding. The
following description of the capital stock of the Company and certain provisions
of the Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation") and the Second Amended and Restated By-laws (the "By-laws") is a
summary and is qualified in its entirety by the provisions of the Certificate of
Incorporation and By-laws, each of which are incorporated by reference as
exhibits to the Company's Annual Report on Form 10-K for the fiscal year ended
February 1, 1997, as amended.
Common Stock
Holders of Common Stock are entitled to one vote per share on all matters
submitted to a vote of the stockholders, including the election of directors,
and the holders of such shares will possess all of the voting power. As a
result, the holders of Common Stock entitled to exercise more than 50% of the
voting rights in an election of directors can elect all of the directors to be
elected if they choose to do so. The Certificate of Incorporation does not
provide for cumulative voting for the election of directors. The holders of
Common Stock will be entitled to such dividends as may be declared from time to
time by the Board of Directors from funds legally available therefor, and will
be entitled to receive, pro rata, all assets of the Company available for
distribution to such holders upon liquidation. No shares of Common Stock have
any preemptive, redemption or conversion rights, or the benefits of any sinking
fund. The Common Stock is listed on the NYSE.
Preferred Stock
Preferred Stock may be issued from time to time in one or more series and
the Board of Directors, without further approval of the stockholders, is
authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights and terms, liquidation preferences, sinking funds and
any other rights, preferences, privileges and restrictions applicable to each
such series of Preferred Stock. The issuance of Preferred Stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, adversely affect the voting power
of the holders of Common Stock and, under certain circumstances, make it more
difficult for a third party to gain control of the Company, discourage bids for
the Common Stock at a premium or otherwise adversely affect the market price of
Common Stock.
Certain Certificate of Incorporation, By-law and Statutory Provisions
Directors' Liability. The General Corporation Law of Delaware (the
"Delaware Law") provides that a corporation may limit the liability of each
director to the corporation or its stockholders for monetary damages except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) in
respect of certain unlawful dividend payments or stock redemptions or
repurchases and (iv) for any transaction from which the director derives an
improper personal benefit. The Certificate of Incorporation provides for the
elimination and limitation of the personal liability of directors of the Company
for monetary damages to the fullest extent permitted by Delaware Law. In
addition, the Certificate of Incorporation provides that if the Delaware Law is
amended to authorize the further elimination or limitation of the liability of a
director, then the liability of the directors shall be eliminated or limited to
the fullest extent permitted by the Delaware Law, as so amended. The effect of
this provision is to eliminate the rights of the Company and its stockholders
(through stockholders' derivative suits on behalf of the Company) to recover
monetary damages against a director for breach of the fiduciary duty of care as
a director (including breaches resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (i) through (iv) above.
This provision does not limit or eliminate the rights of the Company or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care. The Certificate of
Incorporation also provides that the Company shall, to the full extent permitted
by Delaware Law, as amended from time to time, indemnify and advance expenses to
each of its currently acting and former directors, officers, employees and
agents.
Classified Board of Directors. The Certificate of Incorporation provides
for the Board of Directors to be divided into three classes of directors serving
staggered three-year terms. As nearly as practical, each class shall consist of
one-third of the Board of Directors constituting the entire Board of Directors.
As a result, approximately one-third of the Board of Directors will be elected
each year. The stockholders may not amend or repeal this provision except upon
the affirmative vote of holders of not less than 80% of the outstanding shares
of capital stock of the Company entitled to vote thereon. Holders of a majority
of the outstanding shares of capital stock of the Company entitled to vote with
respect to election of directors may remove directors only for cause. Vacancies
on the Board of Directors may be filled only by the remaining directors and not
by the stockholders, provided that such vacancies are not caused by the removal
of directors by the stockholders.
Stockholder Meetings. The Certificate of Incorporation provides that any
action required or permitted to be taken by the stockholders of the Company may
be effected only at an annual or special meeting of stockholders and prohibits
stockholder action by written consent in lieu of a meeting. The By-laws provide
that special meetings of stockholders may be called only by the chairman or the
chief executive officer of the Company and must be called by either of such
officer at the request in writing of a majority of the Board of Directors.
Stockholders are not permitted to call a special meeting of stockholders, to
require that the chairman or the chief executive officer call such a special
meeting, or to require that the Board of Directors requests the calling of a
special meeting of stockholders.
Advance Notice Provisions. The By-laws establish an advance notice
procedure for stockholders to make nominations of candidates for election as
directors, or to bring other business before an annual meeting of stockholders
of the Company. The By-laws provide that only persons who are nominated by, or
at the direction of, the chairman, the chief executive officer or the Board of
Directors, or by a stockholder who has given timely written notice to the
Secretary of the Company prior to the meeting at which directors are to be
elected, will be eligible for election as directors of the Company. The By-laws
also provide that at an annual meeting only such business may be conducted as
has been brought before the meeting by, or at the direction of, the chairman,
the chief executive officer or the Board of Directors or by a stockholder who
has given timely written notice to the Secretary of the Company of such
stockholder's intention to bring such business before such meeting. Generally,
for notice of stockholder nominations to be made at an annual meeting to be
timely under the By-laws, such notice must be received by the Company not less
than 70 days nor more than 90 days prior to the first anniversary of the
previous year's annual meeting (or, in the case of a special meeting at which
directors are to be elected, not earlier than the 90th day before such meeting
and not later than the later of (x) the 70th day prior to such meeting and (y)
the 10th day after public announcement of the date of such meeting is first
made). Under the By-laws, a stockholder's notice must also contain certain
information specified in the By-laws.
Section 203 of Delaware Law. The Company is subject to the "business
combination" provisions of the Delaware Law. In general, Section 203 of the
Delaware Law prohibits a publicly-held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an
"interested stockholder," unless (a) prior to such date the board of directors
of the corporation approved either the "business combination" or the transaction
which resulted in the stockholder becoming an "interested stockholder," (b) upon
consummation of the transaction which resulted in the stockholder becoming an
"interested stockholder," the "interested stockholder" owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (i) by persons who are directors and also
officers and (ii) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer, or (c) on or subsequent to
such date the "business combination" is approved by the board of directors and
authorized at an annual or special meeting of stockholders by the affirmative
vote of at least 66-2/3% of the outstanding voting stock which is not owned by
the "interested stockholder." A "business combination" includes mergers, stock
or asset sales and other transactions resulting in a financial benefit to the
"interested stockholders." An "interested stockholder" is a person who,
together with affiliates and associates, owns (or within three years, did own)
15% or more of the corporation's voting stock. The Board of Directors has taken
action to exempt each of Messrs. Fisher and Camuto, and Mr. Wayne Weaver (a
former principal stockholder), from the application of the Section 203 of the
Delaware law.
Certain provisions described above may have the effect of delaying
stockholder actions with respect to certain business combinations and the
election of new members to the Board of Directors. As such, the provisions
could have the effect of discouraging open market purchases of Common Stock
because they may be considered disadvantageous by a stockholder who desires to
participate in a business combination or elect a new director.
PLAN OF DISTRIBUTION
The Securities covered hereby may be offered and sold from time to time by
the Selling Holders. The Selling Holders will act independently of the Company
in making decisions with respect to the timing, manner and size of each sale.
Such sales may be made in the over-the-counter market or otherwise, at market
prices prevailing at the time of the sale, at prices related to the then
prevailing market prices or in negotiated transactions, including, without
limitation, pursuant to an underwritten offering or pursuant to one or more of
the following methods: (a) purchases by a broker-dealer as principal and resale
by such broker-dealer for its account pursuant to this Prospectus; (b) ordinary
brokerage transactions and transactions in which a broker solicits purchasers;
and (c) block trades in which a broker-dealer so engaged will attempt to sell
the shares as agent but may take a position and resell a portion of the block as
principal to facilitate the transaction.
The Company has been advised that, as of the date hereof, the Selling
Holders have made no arrangement with any broker for the offering or sale of the
Notes or the shares of Common Stock issuable upon conversion thereof.
Underwriters, brokers, dealers or agents may participate in such transactions as
agents and may, in such capacity, receive brokerage commissions from the Selling
Holders or purchasers of such Notes or shares of Common Stock. Such
underwriters, brokers, dealers or agents may also purchase the Notes or shares
of Common Stock issuable upon conversion thereof and resell such securities for
their own account. The Selling Holders and such underwriters, brokers, dealers
or agents may be considered "underwriters" as that term is defined by the
Securities Act, although the Selling Holders disclaim such status. Any
commissions, discounts or profits received by such underwriters, brokers,
dealers or agents in connection with the foregoing transactions may be deemed to
be underwriting discounts and commissions under the Securities Act.
To comply with the securities laws of certain jurisdictions, if applicable,
the Notes and Common Stock issuable upon conversion thereof may be offered or
sold in such jurisdictions only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the Notes and Common Stock
issuable upon conversion thereof may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or unless an
exemption from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Notes or the shares of Common Stock issuable
upon conversion thereof may be limited in its ability to engage in market
activities with respect to such Notes or the shares of Common Stock issuable
upon conversion thereof. In addition and without limiting the foregoing, each
Selling Holder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which provisions may limit the timing of purchases and sales of any of the
Notes and shares of Common Stock issuable upon conversion thereof by the Selling
Holders. All of the foregoing may affect the marketability of the Notes and
shares of Common Stock issuable upon conversion thereof.
The Company may suspend the use of this Prospectus, and any supplements
hereto, in certain circumstances due to pending corporate developments, public
filings with the Commission or similar events. The Company is obligated, in the
event of such suspension, to use its reasonable efforts to ensure that the use
of the Prospectus may be resumed as soon as possible.
The Company has agreed to pay substantially all of the expenses incident to
the registration, offering and sale of the Notes or the shares of Common Stock
issuable upon conversion thereof to the public other than commissions and
discounts of agents, dealers or underwriters. Such expenses (excluding such
commissions and discounts) are estimated to be approximately $107,000. The
Company has also agreed to indemnify the Selling Holders against certain
liabilities, including certain liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Beth Barban Hedberg, Associate General Counsel of the Company.
EXPERTS
The consolidated financial statements and financial statements schedules of
the Company as of February 1, 1997 and February 3, 1996 and for the years ended
February 1, 1997, February 3, 1996 and December 31, 1994 incorporated by
reference in the Registration Statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, and have been
incorporated by reference herein in reliance upon the reports of such firm given
upon their authority as experts in auditing and accounting.
The consolidated financial statements of the Footwear Group of U.S. Shoe as
of and for the year ended January 28, 1995 incorporated by reference in the
Registration Statement have been audited by Arthur Anderson LLP, independent
public accountants, as indicated in their report with respect thereto, and have
been incorporated by reference herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report.
No person has been authorized in connection with this offering to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company, the Selling Holders or any other person.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to purchase, any securities other than those to which it relates, nor does
it constitute an offer to sell or a solicitation of an offer to purchase by any
person in any jurisdiction in which it is unlawful for such person to make such
an offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date of
such information.
__________________________
TABLE OF CONTENTS
Page
Available Information...............................................
Incorporation of Certain Documents by Reference.....................
Cautionary Notice Regarding Forward-Looking Statements..............
Prospectus Summary..................................................
Risk Factors........................................................
Use of Proceeds.....................................................
Ratio of Earnings to Fixed Charges..................................
Selling Holders.....................................................
Description of the Notes............................................
Description of Capital Stock........................................
Plan of Distribution................................................
Legal Matters.......................................................
Experts.............................................................
__________________________
$185,680,000
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
__________________________
PROSPECTUS
__________________________
August , 1997
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses payable by the Company in
connection with the sale and distribution of the Securities registered hereby.
Any sales commissions or underwriting discount incurred in connection with the
sale of Securities registered hereby are payable by the Selling Holders.
SEC registration fee .............................. $ 56,266.67
Accounting fees and expenses* ..................... 8,500.00
Legal fees and expenses* .......................... 30,600.00
Trustee fees*...................................... 10,000.00
Miscellaneous expenses* ........................... 2,000.00
-----------
Total.............................................. $107,366.67
===========
*Estimated
Item 15. Indemnification of Directors and Officers
The Company's Restated Certificate of Incorporation provides that the
Company shall indemnify and advance expenses to its currently acting and its
former directors, officers, employees or agents to the fullest extent permitted
by the Delaware General Corporation Law (the "Delaware Law"), as amended from
time to time.
Section 145 of the Delaware Law provides that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A similar standard of
care is applicable in the case of derivative actions, except that Delaware law
restricts indemnification to expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement of such an
action or suit and then, where such person is adjudged to be liable to the
corporation, only if and to the extent that the Court of Chancery of the State
of Delaware or the court in which such action was brought determines that he is
fairly and reasonably entitled to such indemnity, and then only for such
expenses as the court shall deem proper.
The Delaware Law also permits a Delaware corporation to limit each
director's liability to the Company or its stockholders for monetary damages
except (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware Law providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemption, or (iv)
for any transaction from which a director derived an improper personal benefit.
The Restated Certificate of Incorporation provides for the limitation of the
personal liability of the directors of the Company for monetary damages to the
fullest extent permitted by the Delaware Law, as amended from time to time. The
effect of this provision is to eliminate the personal liability of directors for
monetary damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.
For information concerning the Company's undertaking to submit to
adjudication the issue of indemnification for violation of the securities laws,
see Item 17 hereof.
The Company maintains insurance, at its expense, to protect any director or
officer of the Company against certain expenses, liabilities or losses.
Item 16. Exhibits
See Exhibit Index.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change
to such information in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
1 Purchase Agreement, dated as of June 26, 1996, among the Company
and the Initial Purchasers named therein (previously filed)
4.1 Indenture, dated as of June 26, 1996, between the Company and Chemical
Bank, as trustee thereunder, filed as Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended August 3,
1996 ("Second Quarter Form 10-Q"), and incorporated herein by
reference
4.2 Note Resale Registration Rights Agreement, dated as of June 26, 1996,
among the Company and the Initial Purchasers named therein, filed as
Exhibit 4.6 to the Second Quarter Form 10-Q, and incorporated herein
by reference
4.3 Form of Definitive 5-1/2% Convertible Subordinated Notes of the
Company Due 2003, filed as Exhibit 4.2 to the Second Quarter Form
10-Q, and incorporated herein by reference
4.4 Form of Restricted Global 5-1/2% Convertible Subordinated Note of the
Company Due 2003, filed as Exhibit 4.3 to the Second Quarter Form
10-Q, and incorporated herein by reference
4.5 Form of Regulation S Global 5-1/2% Convertible Subordinated Note of
the Company Due 2003, filed as Exhibit 4.4 to the Second Quarter Form
10-Q, and incorporated herein by reference
*4.6 Form of Unrestricted Global 5-1/2% Convertible Subordinated Note of
the Company Due 2003
*5 Opinion of Counsel
*10.1 Amended and Restated Credit Agreement, dated as of August 1, 1997,
among the Company, the subsidiaries of the Company named therein and
from time to time party thereto as guarantors, the financial
institutions listed on the signature pages thereof, and Citibank,
N.A., as administrative agent
*12 Calculation of Ratio of Earnings to Fixed Charges
*23.1 Consent of Deloitte & Touche LLP
*23.2 Consent of Arthur Andersen LLP
23.3 Consent of Counsel (included in Exhibit 5)
24 Power of Attorney (previously filed)
25 Statement of Eligibility of Trustee (previously filed)
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Stamford, State of Connecticut, on August 19,
1997.
NINE WEST GROUP INC.
By /s/ Robert C. Galvin
---------------------------------
Robert C. Galvin
Executive Vice President,
Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board and August 19, 1997
- -------------------------- Director (Principal
Jerome Fisher Executive Officer)
* Chief Executive Officer and August 19, 1997
- -------------------------- Director (Principal
Vincent Camuto Executive Officer)
/s/ Robert C. Galvin Executive Vice President, August 19, 1997
- -------------------------- Chief Financial Officer and
Robert C. Galvin Treasurer (Principal Financial
Officer and Principal
Accounting Officer)
* Director August 19, 1997
- --------------------------
C. Gerald Goldsmith
* Director August 19, 1997
- --------------------------
Salvatore M. Salibello
* Director August 19, 1997
- --------------------------
Henry W. Pascarella
*By: /s/ Robert C. Galvin
--------------------
Robert C. Galvin
Attorney-in-Fact
EXHIBIT 4.6
FORM OF UNRESTRICTED GLOBAL NOTE
[FORM OF FACE OF NOTE]
No. ____ $_________
CUSIP ___________
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NINE WEST GROUP INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"), which term
includes any Successor Company under the Indenture referred to on the reverse
hereof, for value received hereby promises to pay to _____________, or
registered assigns, the principal sum of ______________ Dollars (subject to
adjustment as set forth in the next paragraph hereof) on July 15, 2003, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or, at the option of the holder of this Global
Note, at the Corporate Trust Office of the Trustee, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts. The Company shall pay interest on said
principal sum semi-annually on January 15 and July 15 of each year (each, an
"Interest Payment Date"), commencing on January 15, 1997, at said office or
agency, in like coin or currency, at the rate per annum specified in the title
of this Note. Interest on this Note will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance and until payment of said principal sum has been made or duly provided
for. The interest so payable on any Interest Payment Date will be paid to the
person in whose name this Global Note (or one or more Predecessor Notes) is
registered at the close of business on the record date, which shall be the
January 1 or July 1 (whether or not a Business Day) next preceding such Interest
Payment Date, respectively; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Interest
shall be paid by check mailed to the registered holder at the registered address
of such person unless other arrangements are made in accordance with the
provisions of the Indenture.
The aggregate principal amount of this Global Note represented hereby
may from time to time be reduced or increased to reflect exchanges of a part of
this Global Note for interests in definitive Notes or exchanges of interests in
definitive Notes for a part of this Global Note or conversions or redemptions of
a part of this Global Note or cancellations of a part of this Global Note or
transfers of interests in definitive Notes in return for a part of this Global
Note or transfers of a part of this Global Note effected by delivery of
interests in definitive Notes, and in any such case, by means of notations on
the Schedule of Exchanges, Conversions, Redemptions, Cancellations and Transfers
on the last page hereof. Notwithstanding any provision of this Global Note to
the contrary, (i) exchanges of a part of this Global Note for interests in
definitive Notes, (ii) exchanges of interests in definitive Notes for a part of
this Global Note, (iii) conversions or redemptions of a part of this Global
Note, (iv) cancellations of a part of this Global Note, (v) transfers of
interests in definitive Notes in return for a part of this Global Note and (vi)
transfers of a part of this Global Note effected by delivery of interests in
definitive Notes may be effected without the surrendering of this Global Note,
provided that appropriate notations on the Schedule of Exchanges, Conversions,
Redemptions, Cancellations and Transfers are made by the Trustee, or the
Custodian at the direction of the Trustee, to reflect the appropriate reduction
or increase, as the case may be, in the aggregate principal amount of this
Global Note resulting therefrom or as a consequence thereof.
Reference is made to the further provisions of this Global Note set
forth on the reverse hereof, including, without limitation, provisions giving
the holder of this Global Note the right to convert this Global Note into Common
Stock of the Company (or, at the option of the Company, into an amount of cash
as set forth in the Indenture) on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Global Note shall be deemed to be a contract made under the laws
of the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of said State, without regard to conflicts of laws
principles thereof.
This Global Note shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee or a duly authorized authenticating agent under the
Indenture.
IN WITNESS WHEREOF, the Company has caused this Global Note to be duly
executed under its corporate seal.
NINE WEST GROUP INC.
By:
--------------------
Name:
Title:
Attest:
- -------------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-named indenture.
THE CHASE MANHATTAN BANK (formerly known as
Chemical Bank), as Trustee
By:
------------------------
Authorized Signatory
[FORM OF REVERSE OF UNRESTRICTED GLOBAL NOTE]
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
This Global Note is one of a duly authorized issue of Notes of the
Company, designated as its 5-1/2% Convertible Subordinated Notes Due 2003
(herein called the "Notes"), limited to the aggregate principal amount of
$______________ all issued or to be issued under and pursuant to an Indenture
dated as of June 26, 1996 (the "Indenture"), between the Company and The Chase
Manhattan Bank (formerly known as Chemical Bank), as trustee (the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a complete description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Notes. Each Note is subject to, and qualified by, all such terms as set
forth in the Indenture, certain of which are summarized hereon and each holder
of a Note is referred to the corresponding provisions of the Indenture for a
complete statement of such terms. To the extent that there is any inconsistency
between the summary provisions set forth in the Notes and the Indenture, the
provisions of the Indenture shall govern. Capitalized terms used but not
defined in this Note shall have the meanings ascribed to them in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the
Notes will, to the extent set forth in the Indenture, be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payments in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment of principal, premium (if
any) or interest on the Notes (except in such subordinated securities) and may
not repurchase, redeem or otherwise retire any Notes if (a) a default in the
payment of the principal of, premium, if any, or interest on Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (b) any other
default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the representative or representatives of holders
of at least a majority in principal amount of Senior Indebtedness then
outstanding. Payments on the Notes may and shall be resumed (i) in the case of
a payment default, upon the date on which such default is cured or waived, or
(ii) in the case of a non-payment default, 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Senior Indebtedness has been accelerated. No new period of payment blockage may
be commenced within 360 days after the receipt by the Trustee of any prior
Payment Blockage Notice. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 180 days.
In the event that the Trustee (or paying agent if other than the
Trustee) or any holder of the Notes receives any payment of principal or
interest with respect to the Notes at a time when such payment is prohibited
under the Indenture, such payment shall be held in trust for the benefit of, and
shall be paid over and delivered to, the holders of Senior Indebtedness (if
there are no representatives thereof) or their representative as their
respective interests may appear. After all Senior Indebtedness is paid in full
and until the Notes are paid in full, the holders of the Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the holders of the Notes have been applied to the payment of Senior
Indebtedness.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided that no such supplemental indenture shall
(i) extend the fixed maturity of any Note, or reduce the rate or extend the time
of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof,
alter the obligation of the Company to redeem the Notes at the option of the
holders upon the occurrence of a Change of Control or impair or affect the right
of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, modify the subordination
provisions in a manner adverse to the holders of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture without the consent of the holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding. It is also provided in the Indenture that, prior
to any declaration accelerating the maturity of the Notes, the holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest or any premium on or the principal of any of the Notes, a failure by
the Company to convert any Notes into Common Stock of the Company or a default
in respect of a covenant or provision of the Indenture that under Article X
thereof cannot be modified or amended without the consent of the holders of all
Notes then outstanding. Any such consent or waiver by the holder of this Global
Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Global
Note and any Notes that may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Global
Note or such other Notes.
No reference herein to the Indenture and no provision of this Global
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes are not redeemable at the option of the Company prior to
July 16, 1999. At any time on or after that date, the Notes may be redeemed at
the Company's option, upon notice as set forth in the Indenture, in whole at any
time or in part from time to time, at the optional redemption prices set forth
below together with accrued interest to the date fixed for redemption.
If redeemed during the 12-month period beginning:
Date Percentage
---- ----------
July 16, 1999 102.75%
July 15, 2000 101.83%
July 15, 2001 100.92%
and 100% on or after July 15, 2002; provided that if the date fixed for
redemption is on a date or after the record date and on or before the next
following interest payment date, then the interest payable on such date shall be
paid to the holder of record on the next preceding January 1 or July 1,
respectively.
If a Change of Control (as defined in the Indenture) shall occur at
any time, then each holder of Notes shall have the right to require that the
Company purchase such holder's Notes in whole or in part in integral multiples
of $1,000, at a purchase price in cash in an amount equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 60 days following the latest date of
original issuance of the Notes and prior to the close of business on July 15,
2003, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Trading Day next preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal that
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal amount
of this Global Note or portion thereof to be converted by the conversion price
of $60.76 or such conversion price as adjusted from time to time as provided in
the Indenture, upon surrender of this Global Note, together with a conversion
notice as provided in the Indenture, to the Company at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York, or at the option of such holder, the Corporate Trust Office of the
Trustee, and, unless the shares issuable on conversion are to be issued in the
same name as this Global Note, duly endorsed by, or accompanied by instruments
of transfer in form satisfactory to the Company duly executed by, the holder or
by his duly authorized attorney. No adjustment in respect of interest or
dividends will be made upon any conversion; provided that if this Global Note
shall be surrendered for conversion during the period from the close of business
on any record date for the payment of interest and through the opening of
business on the next succeeding interest payment date, this Global Note (unless
it or the portion being converted shall have been called for redemption) must be
accompanied by an amount, in funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted. The interest payment with respect to a Note called for redemption on
a date during the period from the close of business on or after any record date
to the opening of business on the business day following the corresponding
payment date will be payable on the corresponding interest payment date to the
registered Holder at the close of business on that record date (notwithstanding
the conversion of such Note before the corresponding interest payment date) and
a Holder who elects to convert need not include funds equal to the interest
paid. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share that would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
At the sole option of the Company, in lieu of delivering shares of
Common Stock (or other Securities into which the Notes are then convertible)
upon conversion of the Notes pursuant to the provisions of the Indenture, the
Company may pay to a holder of Notes who properly exercises the conversion
privilege, as set forth in the Indenture, an amount in cash equal to the Market
Cash Conversion Price (as defined in the Indenture) of the shares of Common
Stock into which such Notes are then convertible, plus any property or assets
into which such Notes are then convertible.
Upon due presentment for registration of transfer of this Global Note
at the office or agency of the Company in the Borough of Manhattan, The City of
New York, or at the option of the holder of this Global Note, at the Corporate
Trust Office of the Trustee, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the conditions and limitations provided in the Indenture,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Global Note (whether or not this
Global Note shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Note
registrar), for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Note registrar shall be affected by any notice to
the contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Global Note.
No recourse for the payment of the principal of or any premium or
interest on this Global Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any Successor
Company, either directly or through the Company or any Successor Company,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Global Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right ___________________Custodian
of survivorship and not as (Cust)
tenants in common
__________________ under
Uniform Gifts To
Minors Act
---------------
(State)
Additional abbreviations may also be used though not in the above list.
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Nine West Group Inc.
The undersigned registered owner of this Global Note hereby irrevocably
exercises the option to convert this Global Note, or the portion hereof (which
is $1,000 principal amount or an integral multiple thereof) below designated,
into shares of Common Stock in accordance with the terms of the Indenture
referred to in this Global Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Global Note not converted are to be issued in the name of a person other than
the undersigned, the undersigned will check the appropriate box below and pay
all transfer taxes payable with respect thereto. Any amount required to be paid
to the undersigned on account of interest accompanies this Global Note.
Dated: ____________________
--------------------------------
--------------------------------
Signature(s)
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or
Notes to be delivered, other than to
and in the name of the registered holder.
- --------------------------------
Signature Guarantee
Fill in for registration of shares if to be issued, and Notes if to be
delivered, other than to and in the name of the registered holder:
- -----------------------------
(Name)
- -----------------------------
(Street Address)
- -----------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if
less than all) $ __________________
-------------------
Social Security or Other Taxpayer
Identification Number
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To: Nine West Group Inc.
The undersigned registered owner of this Global Note hereby
irrevocably acknowledges receipt of a notice from Nine West Group Inc. (the
"Company") as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Global Note, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in accordance with the
terms of the Indenture referred to in this Global Note, together with accrued
interest to such date, to the registered holder hereof.
Dated:
------------------
--------------------------------
--------------------------------
Signature(s)
-------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if
less than all):
$
-------------
SCHEDULE A
-----------
SCHEDULE OF EXCHANGES
The initial principal amount of this Global Note is U.S. $_________.
The following additions to principal, redemptions, exchanges of a part of this
Global Note for an interest in a definitive Note and conversions into Common
Shares have been made:
"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
" Date of ' Principal Amount ' Principal Amount ' Remaining ' Notation "
" Addition to ' Added on ' Redeemed, ' Principal ' Made by "
" Principal, ' Exchange of ' Exchanged for ' Amount ' or on "
" Redemption ' Interest in the ' Interest in ' Outstanding ' behalf "
" Exchange or ' Definitive ' Definitive Notes ' Following ' of the "
" Conversion ' Notes ' or Converted into ' such ' Trustee "
" ' ' Common Shares ' Transaction ' "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"-----------------------------------------------------------------------------"
" "
"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""
August 20, 1997
Nine West Group Inc.
9 West Broad Street
Stamford, Connecticut 06902
Re Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
I am Associate General Counsel of Nine West Group Inc., a Delaware
corporation (the "Company"), and am rendering this opinion in connection with
the filing of a Registration Statement on Form S-3 (the "Registration
Statement") by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), relating
to the registration by the Company of up to (i) $185,680,000 principal amount of
its 5-1/2% Convertible Subordinated Notes Due 2003 (the "Notes") and (ii)
3,055,958 (or such other number as may be issuable upon conversion of the Notes
as a result of the antidilution provisions thereof) shares of common stock, par
value $.01 per share, of the Company (the "Common Stock" and, together with the
Notes, the "Securities") issuable upon conversion of the Notes, in each case, to
be sold by the holders of the Securities (the "Selling Holders"). The Notes
were originally issued under an Indenture, dated as of June 26, 1996 (the
"Indenture"), by and between the Company and The Chase Manhattan Bank (formerly
known as Chemical Bank), as trustee (the "Trustee").
I have examined (i) an executed copy of the Registration Statement and all
exhibits thereto, (ii) an executed copy of the Indenture and (iii) specimens of
the Notes. I have also examined such corporate records of the Company,
including the Company's Restated Certificate of Incorporation and Second Amended
and Restated By-Laws, certain resolutions adopted by the Board of Directors of
the Company, and by the Pricing Committee appointed by the Board of Directors,
relating to the issuance of the Securities, certificates received from state
officials and statements I have received from officers and representatives of
the Company. In making such examination and delivering this opinion, I have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to the originals of all documents submitted to me as certified,
photostatic or conformed copies, the authenticity of the originals of all such
latter documents, and the correctness of statements submitted to me by officers
and representatives of the Company, and by public officials.
Based upon and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, I am of the opinion that:
Nine West Group Inc.
August 20, 1997
Page 2
1. The Notes have been duly authorized by requisite corporate action on
the part of the Company and, when the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and will be entitled to the benefits (and
will be subject to all of the limitations) provided for by the Indenture, except
that enforcement may be subject to or limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights and remedies generally and
(ii) general principles of equity (regardless of whether such enforcement may be
sought in a proceeding in equity or at law).
2. The shares of Common Stock initially issuable upon conversion of the
Notes have been duly authorized by the Company and, assuming the Indenture has
been duly qualified under the Trust Indenture Act, such shares, when issued and
delivered upon such conversion in accordance with the terms and provisions of
the Notes and the Indenture, will be validly issued, fully paid and
nonassessable.
I am a member of the Bar of the State of Connecticut. I express no opinion
herein concerning any law other than the General Corporation Law of the State of
Delaware.
I hereby consent to the sole use of this opinion as an exhibit to the
Registration Statement and to the use of my name under the heading "Legal
Matters" in the Prospectus included therein. In giving this consent, I do not
thereby admit that I am included in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission. This opinion is not to be used, circulated, quoted, referred to or
relied upon by any other person or for any other purpose without my prior
written consent.
Very truly yours,
/s/ Beth Barban Hedberg
Beth Barban Hedberg
Associate General Counsel
U.S. $600,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 1, 1997
NINE WEST GROUP INC.,
NINE WEST UK HOLDINGS LIMITED,
NINE WEST ASIA LTD.,
NINE WEST MELBOURNE PTY LTD, and
NINE WEST CANADA CORPORATION,
as Borrowers,
THE GUARANTORS NAMED HEREIN,
as Guarantors,
CITICORP SECURITIES, INC.,
as Arranger,
CITIBANK, N.A.,
as Administrative Agent, and
THE LENDERS PARTY HERETO
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . 2
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . 2
1.2. Computation of Time Periods. . . . . . . . . . . . 31
1.3. Accounting Terms . . . . . . . . . . . . . . . . . 31
1.4. Certain Terms. . . . . . . . . . . . . . . . . . . 31
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS . . . . . . . . . 32
2.1. The Revolving Credit Loans . . . . . . . . . . . . 32
2.2. The Letters of Credit. . . . . . . . . . . . . . . 32
2.3. Making the Loans . . . . . . . . . . . . . . . . . 33
2.4. Fees . . . . . . . . . . . . . . . . . . . . . . . 36
2.5. Amendment, Reduction and Termination of the
Commitments . . . . . . . . . . . . . . . . . . . 37
2.6. Repayment; Evidence of Indebtedness. . . . . . . . 37
2.7. Prepayments. . . . . . . . . . . . . . . . . . . . 38
2.8. Conversion/Continuation Option . . . . . . . . . . 39
2.9. Interest . . . . . . . . . . . . . . . . . . . . . 40
2.10. Interest Rate Determination . . . . . . . . . . . 41
2.11. Increased Costs . . . . . . . . . . . . . . . . . 42
2.12. Illegality. . . . . . . . . . . . . . . . . . . . 42
2.13. Capital Adequacy. . . . . . . . . . . . . . . . . 43
2.14. Payments and Computations . . . . . . . . . . . . 43
2.15. Taxes . . . . . . . . . . . . . . . . . . . . . . 45
2.16. Sharing of Payments, Etc. . . . . . . . . . . . . 48
2.17. Letter of Credit Facility . . . . . . . . . . . . 49
2.18. Substitution of Lenders . . . . . . . . . . . . . 55
2.19. The Swing Loans . . . . . . . . . . . . . . . . . 57
2.20. The Competitive Loans . . . . . . . . . . . . . . 59
2.21. The Multicurrency Loans . . . . . . . . . . . . . 62
2.22. Currency Equivalents. . . . . . . . . . . . . . . 63
ARTICLE III
CONDITIONS . . . . . . . . . . . . . . 64
3.1. Conditions Precedent to Effectiveness. . . . . . . 64
3.2. Additional Conditions Precedent to Effectiveness . 65
3.3. Conditions Precedent to Each Loan and Letter of Credit 66
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 67
4.1. Corporate Existence; Compliance with Law . . . . . 67
4.2. Corporate Power; Authorization; Enforceable Obligations 68
4.3. Taxes. . . . . . . . . . . . . . . . . . . . . . . 69
4.4. Full Disclosure. . . . . . . . . . . . . . . . . . 70
4.5. Financial Matters. . . . . . . . . . . . . . . . . 70
4.6. Litigation . . . . . . . . . . . . . . . . . . . . 71
4.7. Margin Regulations . . . . . . . . . . . . . . . . 71
4.8. Subsidiaries . . . . . . . . . . . . . . . . . . . 71
4.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . 72
4.10. Liens . . . . . . . . . . . . . . . . . . . . . . 73
4.11. No Burdensome Restrictions; No Defaults . . . . . 73
4.12. No Other Ventures . . . . . . . . . . . . . . . . 74
4.13. Investment Company Act; Public Utility Holding
Company Act . . . . . . . . . . . . . . . . . . . 75
4.14. Insurance . . . . . . . . . . . . . . . . . . . . 75
4.15. Labor Matters . . . . . . . . . . . . . . . . . . 75
4.16. Force Majeure . . . . . . . . . . . . . . . . . . 75
4.17. Use of Proceeds . . . . . . . . . . . . . . . . . 76
4.18. Environmental Protection. . . . . . . . . . . . . 76
4.19. Intellectual Property . . . . . . . . . . . . . . 77
4.20. Title.. . . . . . . . . . . . . . . . . . . . . . 78
4.21. Certain Indebtedness. . . . . . . . . . . . . . . 78
4.22. Restricted Payments . . . . . . . . . . . . . . . 78
ARTICLE V
FINANCIAL COVENANTS. . . . . . . . . . . . 79
5.1. Maximum Leverage Ratio . . . . . . . . . . . . . . 79
5.2. Fixed Charge Coverage Ratio. . . . . . . . . . . . 79
5.3. Maintenance of Net Worth . . . . . . . . . . . . . 79
ARTICLE VI
AFFIRMATIVE COVENANTS . . . . . . . . . . . 79
6.1. Compliance with Laws, Etc. . . . . . . . . . . . . 80
6.2. Payment of Taxes, Etc. . . . . . . . . . . . . . . 80
6.3. Maintenance of Insurance . . . . . . . . . . . . . 80
6.4. Preservation of Corporate Existence, Etc.. . . . . 80
6.5. Access . . . . . . . . . . . . . . . . . . . . . . 81
6.6. Keeping of Books . . . . . . . . . . . . . . . . . 81
6.7. Maintenance of Properties, Etc.. . . . . . . . . . 81
6.8. Performance and Compliance with Other Covenants. . 82
6.9. Application of Proceeds. . . . . . . . . . . . . . 82
6.10. Financial Statements. . . . . . . . . . . . . . . 82
6.11. Reporting Requirements. . . . . . . . . . . . . . 83
6.12. Employee Plans. . . . . . . . . . . . . . . . . . 87
6.13. Fiscal Year . . . . . . . . . . . . . . . . . . . 88
6.14. Environmental . . . . . . . . . . . . . . . . . . 88
6.15. Cash Management System. . . . . . . . . . . . . . 88
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . 88
7.1. Liens, Etc.. . . . . . . . . . . . . . . . . . . . 88
7.2. Indebtedness . . . . . . . . . . . . . . . . . . . 91
7.3. Sale/Leasebacks. . . . . . . . . . . . . . . . . . 92
7.4. Restricted Payments. . . . . . . . . . . . . . . . 92
7.5. Mergers, Borrower Stock Issuances, Sale of Assets, Etc. 93
7.6. Investments in Other Persons . . . . . . . . . . . 94
7.7. Maintenance of Ownership of Subsidiaries . . . . . 96
7.8. Change in Nature of Business . . . . . . . . . . . 96
7.9. Modification of Material Agreements. . . . . . . . 96
7.10. Accounting Changes. . . . . . . . . . . . . . . . 96
7.11. Contingent Obligations. . . . . . . . . . . . . . 96
7.12. Transactions with Affiliates. . . . . . . . . . . 97
7.13. No New Subsidiaries . . . . . . . . . . . . . . . 98
7.14. Terms of Guarantors' Stock. . . . . . . . . . . . 98
7.15. No Speculative Transactions . . . . . . . . . . . 98
ARTICLE VIII
EVENTS OF DEFAULT . . . . . . . . . . . . 98
8.1. Events of Default. . . . . . . . . . . . . . . . . 98
8.2. Remedies . . . . . . . . . . . . . . . . . . . . .101
8.3. Actions in Respect of Letters of Credit. . . . . .102
ARTICLE IX
THE ADMINISTRATIVE AGENT. . . . . . . . . . .104
9.1. Authorization and Action . . . . . . . . . . . . .104
9.2. Administrative Agent's Reliance, Etc.. . . . . . .104
9.3. Citibank and Affiliates. . . . . . . . . . . . . .105
9.4. Lender Credit Decision . . . . . . . . . . . . . .105
9.5. Indemnification. . . . . . . . . . . . . . . . . .106
9.6. Successor Administrative Agent . . . . . . . . . .106
ARTICLE X
GUARANTY. . . . . . . . . . . . . . .107
10.1. Guaranty. . . . . . . . . . . . . . . . . . . . .107
10.2. Guaranty Absolute . . . . . . . . . . . . . . . .107
10.3. Waiver. . . . . . . . . . . . . . . . . . . . . .108
10.4. No Subrogation, Etc.. . . . . . . . . . . . . . .110
10.5. Amendments, Etc.. . . . . . . . . . . . . . . . .110
10.6. No Waiver; Remedies . . . . . . . . . . . . . . .110
10.7. Continuing Guaranty; Termination. . . . . . . . .111
10.8. Contribution. . . . . . . . . . . . . . . . . . .112
10.9. Reinstatement . . . . . . . . . . . . . . . . . .112
10.10. Amendment to Subsidiary Security Agreements. . .112
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . .113
11.1. Amendments, Etc.. . . . . . . . . . . . . . . . .113
11.2. Notices, Etc. . . . . . . . . . . . . . . . . . .113
11.3. No Waiver; Remedies . . . . . . . . . . . . . . .114
11.4. Costs; Expenses; Indemnities. . . . . . . . . . .114
11.5. Right of Set-off. . . . . . . . . . . . . . . . .117
11.6. Binding Effect. . . . . . . . . . . . . . . . . .118
11.7. Assignments and Participations. . . . . . . . . .118
11.8. Additional Borrowers. . . . . . . . . . . . . . .122
11.9. Governing Law . . . . . . . . . . . . . . . . . .122
11.10. Submission to Jurisdiction; Service of Process .122
11.11. Section Titles . . . . . . . . . . . . . . . . .124
11.12. Execution in Counterparts. . . . . . . . . . . .124
11.13. Entire Agreement . . . . . . . . . . . . . . . .124
11.14. Confidentiality. . . . . . . . . . . . . . . . .124
11.15. Waiver of Jury Trial . . . . . . . . . . . . . .125
11.16. Surrender of Original Notes. . . . . . . . . . .125
SCHEDULES
Schedule I -- Commitments
Schedule II -- Applicable Lending Offices and Addresses for Notices
Schedule III -- Applicable Base Rate Margin, Facility Fee and Letter of
Credit Fees
Schedule 4.3(c) -- Tax Matters
Schedule 4.8 -- Subsidiaries
Schedule 4.22 -- Certain Indebtedness
Schedule 7.1 -- Existing Liens
Schedule 7.6 -- Existing Investments
EXHIBITS
Exhibit A - Form of Notice of Borrowing
Exhibit B - Form of Notice of Conversion or Continuation
Exhibit C - Form of Letter of Credit Reimbursement Agreement
Exhibit D - Form of Letter of Credit Request
Exhibit E - Pledge Amendment
Exhibit F - Intentionally Omitted
Exhibit G-1 - Opinion of Simpson, Thacher & Bartlett
Exhibit G-2 - Form of Opinion of Joel K. Bedol, Esq.
Exhibit G-3 - Form of U.K. Counsel Opinion
Exhibit G-4 - Form of Bermuda Counsel Opinion
Exhibit G-5 - Form of Canadian Counsel Opinion
Exhibit G-6 - Form of Australian Counsel Opinion
Exhibit H - Form of Assignment and Acceptance
Exhibit I - Form of Competitive Bid Request
Exhibit J - Form of Notice of Competitive Bid Request
Exhibit K - Form of Competitive Bid
Exhibit L - Form of Competitive Bid Accept/Reject Letter
Exhibit M - Form of Local Currency Guaranty
Exhibit N - Form of Borrower Accession Agreement
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 1, 1997,
among Nine West Group Inc., a Delaware corporation (the "Company"), Nine West UK
Holdings Limited, an English corporation ("Nine West UK"), Nine West Asia Ltd.,
a Bermuda exempted company ("Nine West Asia"), Nine West Canada Corporation, an
Ontario corporation ("Nine West Canada"), Nine West Melbourne Pty Ltd, a
corporation organized under the laws of the State of Victoria, Australia ("Nine
West Melbourne") (each of the Company, Nine West UK, Nine West Asia, Nine West
Canada and Nine West Melbourne being a "Borrower" and collectively the
"Borrowers"), those parties listed on the signature pages hereof as guarantors
(each individually a "Guarantor" and collectively the "Guarantors"), the
financial institutions listed on the signature pages hereof as lenders (each
individually a "Lender" and collectively the "Lenders"), Citibank, N.A., a
national banking association ("Citibank") and any other Lender which issues
letters of credit hereunder (each an "Issuer" and together the "Issuers") and
Citibank, as administrative agent for the Lenders and the Issuers (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Company, the Lenders, Citibank, as issuer of letters of
credit and as Administrative Agent, are party to an Amended and Restated Credit
Agreement, dated as of August 2, 1996, as amended by Amendment No. 1 thereto
dated as of May 23, 1997 and Amendment No. 2 thereto dated as of July 1, 1997
(the "Existing Credit Agreement"); and
WHEREAS, the Company has requested and the Lenders have agreed to
amend and restate the Existing Credit Agreement upon the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Accepted Competitive Bid" shall mean the Competitive Bid or Bids that
are accepted by the Company.
"Accounts" has the meaning specified in the Security Agreement and the
Subsidiary Security Agreement.
"Administrative Agent" has the meaning specified in the first
paragraph of this Agreement.
"Affiliate" means, as to any Person, any Subsidiary of such Person and
any other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person and includes each officer or director or
general partner of such Person, and each Person (other than a Passive
Institutional Investor) who is the beneficial owner of 10% or more of any class
of voting Stock of such Person. For the purposes of this definition, "control"
means the possession of the power to direct or cause the direction of management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means this Amended and Restated Credit Agreement, together
with all Schedules and Exhibits, as the same may be amended, supplemented or
otherwise modified from time to time.
"Alternative Currency" means any currency (other than Dollars) which
is freely transferable and convertible into Dollars.
"Applicable Base Rate Margin" has the meaning set forth on
Schedule III.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan denominated in Dollars
and its Eurodollar Lending Office in the case of a Eurodollar Rate Loan
denominated in Dollars or such other office of such Lender otherwise selected by
such Lender pursuant to Section 2.3(l) and, in the case of each Multicurrency
Loan denominated in an Alternative Currency, the lending office of each
Multicurrency Lender as such Multicurrency Lender may from time to time specify
to the Company and the Administrative Agent for the making of loans in such
Alternative Currency.
"Applicable LIBOR Margin" has the meaning set forth on Schedule III.
"Applicable Margin" means the Applicable Base Rate Margin or the
Applicable LIBOR Margin, as the case may be.
"Asset Sale" means any sale or other disposition, or series of sales
or other dispositions (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise), made on or after
the Effective Date by any Loan Party to any Person of any asset or assets
which individually yields or in the aggregate for a series of related
transactions yield proceeds or have a Fair Market Value in excess of $5,000,000;
provided, however, that any sale or other disposition permitted pursuant to
clause (i)(A), (ii) (other than with respect to sale/leaseback transactions),
(iii), (iv), (v) or (vi) of Subsection 7.5(c) shall not constitute an Asset Sale
for purposes of this Agreement.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, in substantially the form of
Exhibit H, and accepted by the Administrative Agent.
"Available Credit" means, at any time, an amount equal to (a) the then
effective Revolving Credit Commitments of the Lenders minus (b) the sum of
(i) the outstanding principal amount of the Revolving Credit Loans at such time,
(ii) the Letter of Credit Undrawn Amounts at such time, (iii) the outstanding
principal amount of the Competitive Loans at such time, (iv) the outstanding
principal amount of the Swing Loans at such time, (v) the outstanding principal
amount of the Multicurrency Loans at such time and (vi) the Reimbursement
Obligations at such time.
"Base Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time, which rate per annum shall be equal at any time to the
then highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of
(i) 1/2 of one percent per annum, plus (ii) the rate per annum obtained by
dividing (A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a Business Day, on
the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a percentage equal
to 100% minus the average of the daily percentages specified during such
three-week period 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 Citibank in respect of liabilities consisting of or including
(among other liabilities) three-month U.S. dollar nonpersonal time deposits in
the United States, plus (iii) the average during such three-week period of the
maximum annual assessment rates payable to the Federal Deposit Insurance
Corporation (or any successor) by banks which are members of the Bank Insurance
Fund for insuring U.S. dollar deposits in the United States; and
(c) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of
(i) 1/2 of one percent per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the Loans
of any Lender that bears interest with reference to the Base Rate.
"Borrower" has the meaning specified in the first paragraph of this
Agreement.
"Borrowing" means a borrowing consisting of Loans (other than
Multicurrency Loans) to the same Borrower made on the same day by the Lenders
ratably according to their respective Commitments.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to a Eurodollar Rate Loan, a day on which dealings are also carried on
in the London interbank market, and, if the applicable Business Day relates to a
payment in an Alternative Currency, a day on which banks are open for business
in the country of issue of such Alternative Currency.
"Capital Expenditures" means, for any Person for any period, the
aggregate of (a) all cash expenditures made by such Person and its Subsidiaries,
except interest capitalized during construction, during such period for
property, plant or equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs, that would be reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person and its Subsidiaries prepared in conformity with GAAP and
(b) without duplication, the principal amount of all Indebtedness incurred or
assumed to finance any such additions to property, plant and equipment;
provided, however, that Capital Expenditures shall not include any expenditures
made to replace any Operating Assets sold, taken or otherwise disposed of or
subject to a loss with other Operating Assets, or to repair any damage to
Operating Assets, to the extent such expenditures do not exceed the aggregate
amount of proceeds payable to such Person and its Subsidiaries in connection
with such sale, taking, other disposition, loss or damage and are made within
180 days before or after such receipt or a binding agreement to construct or
otherwise acquire an interest in other Operating Assets or repair such damage is
entered into within 180 days before or after such receipt and such acquisition,
construction or repair is completed within one year of such receipt.
"Capitalized Lease" means, as to any Person, any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Cash Equivalents" means (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States government or any agency thereof, (b) overnight bank deposits made
with any Lender, (c) certificates of deposit, time deposits of any nature and
bankers' acceptances of any Lender, or any commercial bank organized under the
laws of the United States of America or any state thereof that has a combined
capital and surplus of at least $300,000,000, having maturities of one year or
less from the date of acquisition, (d) commercial paper of an issuer rated at
least "A-1" by Standard & Poor's Rating Group or "P-1" by Moody's Investors
Service, Inc., or carrying an equivalent rating by a nationally recognized
rating agency if both of the two named rating agencies cease publishing ratings
of investments, and (e) repurchase obligations for underlying securities of the
type described in clause (a) above, provided that (i) such repurchase
obligations do not have a term of longer than seven days from the date of
acquisition thereof and (ii) such repurchase obligations are with a counterparty
that is a financial institution organized or licensed under the laws of the
United States of America or any state thereof that has a combined capital and
surplus of at least $300,000,000.
"Cash Interest Expense" means, for any Person for any period, the Net
Interest Expense of such Person for such period, plus (a) interest expense
capitalized during construction for such period to the extent deducted in the
determination of such Net Interest Expense, less (b) Non-Cash Interest Expense
of such Person for such period.
"Change of Control" means the occurrence of any Person or group (other
than a Permitted Investor), determined in accordance with Section 13(d) of the
Exchange Act, together with any Affiliates thereof, having become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or
indirectly, of Stock of the Company representing at least 25% of the voting
Stock of the Company, as a result of a tender or exchange offer, open market
purchases, privately negotiated purchases or otherwise.
"Cincinnati Properties" means the Company's warehouses and office
building in Cincinnati, Ohio.
"Closing Date" means August 4, 1997.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party (other than Accounts
sold by the Company in connection with the Receivables Securitization) in or
upon which a Lien is purported to be granted in favor of the Secured Parties
under any of the Collateral Documents, except to the extent such property or
interests have been released from such Lien in accordance with the terms of the
applicable Collateral Document.
"Collateral Documents" means the Security Agreement, the Subsidiary
Security Agreements, the Pledge Agreement, the Mortgages, and any other document
executed and delivered by a Loan Party granting a Lien in favor of the Secured
Parties on any of its property to secure payment of the Obligations.
"Commitment" means, as to any Lender, such Lender's Revolving Credit
Commitment, and "Commitments" means the aggregate Revolving Credit Commitments
of all Lenders.
"Competitive Bid" means an offer to make a Competitive Loan pursuant
to Section 2.20.
"Competitive Bid Accept/Reject Letter" means a notification made by
the Company pursuant to Section 2.20(e) in substantially the form of Exhibit L.
"Competitive Bid Rate" means, as to any Competitive Bid made pursuant
to Section 2.20(c), (i) in the case of a Eurodollar Competitive Loan, the
Eurodollar Competitive Borrowing Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" means a request made pursuant to
Section 2.20 in substantially the form of Exhibit I.
"Competitive Borrowing" means a borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bid or Bids for such Borrowing have been accepted by the Company
under the bidding procedure described in Section 2.20.
"Competitive Loan" means a Loan from a Lender to the Company pursuant
to the bidding procedure described in Section 2.20.
"Competitive Loan Obligation" has the meaning specified in
Section 2.3(j).
"Contaminant" means any substance regulated or forming the basis of
liability under any Environmental Law, including, without limitation, any waste,
pollutant, hazardous substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, and any constituent of any
such substance or waste.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness or Contractual Obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or Contractual Obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or Contractual Obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations of a Person include,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an obligation
of another Person, and (b) any liability of such Person for an obligation of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such obligation or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner invest
in such other Person (including, without limitation, to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of this sentence the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the outstanding amount of the obligation so guaranteed or
otherwise supported.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding, in each of the foregoing cases, a
Loan Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its properties is subject.
"Convertible Subordinated Notes" means the 5-1/2% Convertible
Subordinated Notes due 2003 of the Company issued on June 26, 1996.
"Corporate Rating" means a Long-Term Issuer Credit Rating assigned by
the Corporate Credit Rating Service of S&P.
"Current Assets" means, with respect to any Person at any date, the
total consolidated current assets of such Person and its Subsidiaries at such
date, determined in conformity with GAAP.
"Current Liabilities" means, with respect to any Person at any date,
the total consolidated current liabilities of such Person and its Subsidiaries
at such date, determined in conformity with GAAP, less the current portion of
any Indebtedness for Borrowed Money of such Person and its Subsidiaries at such
date determined on a consolidated basis in conformity with GAAP.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Documentary Letter of Credit" means a Letter of Credit in support of
trade obligations of the Company or any of its Subsidiaries incurred in the
ordinary course of business.
"DOL" means the United States Department of Labor, or any successor
thereto.
"Dollar Equivalent" has the meaning given to it in Section 2.22.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"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 II or such other office of such Lender as such Lender may from
time to time specify to the Company and the Administrative Agent.
"Domestic Subsidiary" means each Subsidiary of the Company
incorporated under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, for any Person for any period, the Net Income (Loss)
of such Person for such period taken as a single accounting period, plus (a) the
sum of the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) interest expense, (iv) income tax
expense, (v) extraordinary losses (and other losses on Asset Sales not otherwise
included in extraordinary losses determined on a consolidated basis in
conformity with GAAP), and (vi) non-cash charges (including the cumulative
effect of accounting changes) less (b) the sum of the following amounts of such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP to the extent included in the determination of such Net Income (Loss):
(i) extraordinary gains (and other gains on Asset Sales not otherwise included
in extraordinary gains determined on a consolidated basis in conformity with
GAAP), (ii) the Net Income (Loss) of any other Person that is accounted for by
the equity method of accounting except to the extent of the amount of dividends
or distributions paid to such Person, (iii) the Net Income (Loss) of any other
Person acquired by such Person or a Subsidiary of such Person in a transaction
accounted for as a pooling of interests for any period prior to the date of such
acquisition, and (iv) non-cash credits (including the cumulative effect of
accounting changes).
"Effective Date" means the date on which this Amended and Restated
Credit Agreement becomes effective in accordance with Section 3.1.
"Eligible Assignee" means (a) a commercial bank organized or licensed
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000, (b) a savings and loan association
or savings bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $500,000,000,
(c) a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having a combined
capital and surplus of at least $500,000,000, as long as such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD or the Cayman Islands,
(d) the central bank of any country which is a member of the OECD, (e) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having a combined capital and surplus of at least $500,000,000,
(f) any Lender, and (g) any Affiliate of any Lender.
"Environmental Laws" means all federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and any binding judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment relating to the
regulation and protection of human health, safety, the environment or natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, but are not limited to,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"); the Hazardous
Material Transportation Act, as amended (49 U.S.C. Section 1801 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C.
Section 136 et seq.); the Resource Conservation and Recovery Act, as amended (42
U.S.C. Section 6901 et seq.) ("RCRA"); the Toxic Substances Control Act, as
amended (15 U.S.C. Section 2601 et seq.); the Clean Air Act, as amended (42
U.S.C. Section 7401 et seq.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and Health
Act, as amended (29 U.S.C. Section 651 et seq.); and the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.), and their state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statute, including, without limitation, the New Jersey Industrial
Site Recovery Act (N.J. Stat. Ann. Section 13:1K-6 et seq.) ("ISRA").
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any other Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including, without
limitation, any thereof arising under any Environmental Law, Permit, order or
agreement with any Governmental Authority or other Person, and which relate to
any environmental, health or safety condition, or a Release or threatened
Release, and result from the past, present or future operations of, or ownership
of property by, such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Environmental Reports" means the environmental reports prepared as a
condition precedent to the Existing Credit Agreement and delivered to the
Administrative Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company or any of its Subsidiaries
within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Title IV
Plan or a Multiemployer Plan, (b) the withdrawal of the Company, any of its
Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of the
Company, any of its Subsidiaries or any ERISA Affiliate from any Multiemployer
Plan, (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA,
(e) the institution by the PBGC of proceedings to terminate a Title IV Plan or
Multiemployer Plan, (f) the failure to make any contribution required by
applicable law to a Qualified Plan, (g) the insolvency or notice of
reorganization of a Multiemployer Plan, or (h) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.
"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 Competitive Borrowing Margin" means, as to any Eurodollar
Competitive Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the Eurodollar Rate in order to determine the interest rate
applicable to such Loan, as specified in the Competitive Bid relating to such
Loan.
"Eurodollar Competitive Loan" means any Competitive Loan bearing
interest at a rate determined by reference to the Eurodollar Rate in accordance
with the provisions of Article II.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (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 Company and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate of interest
determined by the Administrative Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are offered by
the principal office of Citibank 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 Eurodollar
Rate Loan of Citibank 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 Loan" means any outstanding principal amount of the
Loans of any Lender that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period 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 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
which includes deposits by reference to which the Eurodollar Rate is determined)
having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" has the meaning given to that term in the
Recitals to this Agreement.
"Facility" means the Lenders' Commitments to make Revolving Credit
Loans and the Multicurrency Loan Facility.
"Facility Fee" has the meaning specified in Subsection 2.4(a).
"Facility Rating" has the meaning set forth on Schedule III.
"Factoring Program" means the sale by the Company and the Guarantors
of Accounts of non-United States account debtors.
"Fair Market Value" means (a) with respect to any asset (other than a
marketable security) at any date, the value of the consideration obtainable in a
sale of such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset, as reasonably determined by the seller, or, if such asset shall have
been the subject of a relatively contemporaneous appraisal by an independent
third party appraiser, the basic assumptions underlying which have not
materially changed since its date, as set forth in such appraisal, and (b) with
respect to any marketable security at any date, the closing sale price of such
security on the business day (on which any national securities exchange is open
for the normal transaction of business) next preceding such date, as appearing
in any published list of any national securities exchange or in the National
Market List of the National Association of Securities Dealers, Inc. or, if there
is no such closing sale price of such security, the final price for the purchase
of such security quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"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 which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" has the meaning specified in Subsection 2.4(b).
"Fiscal Quarter" means a fiscal quarter of the Company and its
consolidated Subsidiaries for financial accounting purposes.
"Fiscal Year" means the period of 52 or 53 weeks, as the case may be,
ending on the Saturday nearest to January 31 of each year, with such Fiscal Year
ending in January or February, as the case may be, being referred to for
purposes of identification by the year of the immediately preceding calendar
year.
"Fixed Charges" means, for any Person for any period, the sum, without
duplication, of (a) the Cash Interest Expense of such Person for such period,
(b) all rentals under leases of real, personal or mixed property in respect of
such period payable in cash during such period by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, (c) the
principal amount of Indebtedness for Borrowed Money of such Person and each of
its Subsidiaries determined on a consolidated basis in conformity with GAAP
having a scheduled due date during such period, (d) all amounts having a
scheduled due date during such period payable by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, on
Capitalized Lease Obligations, (e) all dividends payable in cash during such
period by such Person and its Subsidiaries on any outstanding common or
preferred stock in respect of such period other than to the Company and its
Subsidiaries, (f) the total estimated federal income tax liability payable by
such Person in respect of such period, and (g) Capital Expenditures of such
Person made during such period net of the aggregate principal amount of
Indebtedness constituting a Capital Expenditure incurred or assumed by such
Person during such period but not payable during such period.
"Fixed Rate Borrowing" means a Borrowing comprised of one or more
Fixed Rate Loans.
"Fixed Rate Loan" means any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"Foreign Loan Party" means each of Nine West UK, Nine West Asia, Nine
West Canada, Nine West Melbourne and any other Person which becomes a Borrower
hereunder and which is not organized under the laws of any State of the United
States of America or the District of Columbia.
"Foreign Venture" means any Subsidiary of the Company other than a
Guarantor or a North American Venture.
"Funding" means Nine West Funding Corporation, a Delaware corporation.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Article V, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements referred to in
Section 4.5.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" means Nine West Distribution Corporation, Nine West
Manufacturing Corporation, Nine West Footwear Corporation, Nine West Development
Corporation, Nine West Boot Corporation, Community Urban Redevelopment of Duck
Creek, Inc. and each other Domestic Subsidiary that is a Wholly-Owned
Subsidiary, other than Pappagallo and Funding, that is required to become a
Guarantor hereunder.
"Guaranty" means the guaranty set forth in Article X hereof and any
other guaranty previously executed by the Company or a Guarantor with respect to
the Obligations, as each such guaranty may be amended, supplemented or otherwise
modified from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money (including, without limitation,
reimbursement and all similar obligations with respect to surety bonds, letters
of credit and bankers' acceptances, whether or not matured) or for the deferred
purchase price of property or services, (b) all indebtedness of such Person
evidenced by notes, bonds, debentures or similar instruments, (c) all
indebtedness 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), (d) all Capitalized Lease Obligations of such Person, (e) all
Contingent Obligations of such Person, (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value (other than
with Stock or Stock Equivalents of such Person in respect of which such Person
has no purchase, redemption, retirement, defeasance or other acquisition
obligation) any Stock or Stock Equivalents of such Person, (g) all obligations
of such Person under Interest Rate Contracts, (h) all Indebtedness referred to
in clause (a), (b), (c), (d), (e), (f) or (g) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including, without limitation,
Accounts and general intangibles) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, and
(i) in the case of any Loan Party, all monetary obligations constituting
Obligations.
"Indebtedness for Borrowed Money" means, for any Person, all
indebtedness for borrowed money or evidenced by notes, bonds, debentures or
similar evidences of indebtedness of such Person and its Subsidiaries on a
consolidated basis in conformity with GAAP, all obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP for the
deferred purchase price of any property service or business (other than trade
accounts payable incurred in the ordinary course of business constituting
Current Liabilities), and all Capitalized Lease Obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP. For purposes
of this definition, "indebtedness for borrowed money" shall not include the
unmatured portion of any reimbursement or similar obligations with respect to
surety bonds, letters of credit and bankers' acceptances.
"Indemnitee" has the meaning specified in Section 11.4.
"Initial Lender" means each financial institution whose name is set
forth on the signature pages of this Agreement.
"Interest Period" means, (1) in the case of any Fixed Rate Loan, the
period commencing on the date of the related Competitive Borrowing and ending on
the date specified in the Competitive Bid in which the offer to make such Fixed
Rate Loans was extended, which period shall not be earlier than seven days or
later than 180 days after the date of such Competitive Borrowing, and (2) in the
case of any Eurodollar Rate Loan, (a) initially, the period commencing on the
date such Eurodollar Rate Loan is made or on the date of conversion of a Base
Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six months
thereafter, as selected by the Company in the applicable Notice of Borrowing,
Notice of Conversion or Continuation or Competitive Bid Request given to the
Administrative Agent pursuant to Section 2.3, 2.8 or 2.20, respectively, and
(b) thereafter, if such Loan is continued, in whole or in part, as a Eurodollar
Rate Loan pursuant to Section 2.8, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Company in the applicable Notice of
Conversion or Continuation given to the Administrative Agent pursuant to Section
2.8; provided, however, that all of the foregoing provisions in clause (2)
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
(iii) the Company may not select any Interest Period in respect
of Loans having an aggregate principal amount of less than $1,000,000; and
(iv) there shall be outstanding at any one time no more than 10
Interest Periods in the aggregate.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"Investments" has the meaning specified in Section 7.6.
"Inventory" has the meaning specified in the Security Agreement and
the Subsidiary Security Agreement.
"Investment Grade" means, with respect to the Company's long-term
senior unsecured indebtedness either (i) a rating of (A) "Baa3" or higher by
Moody's and (B) either (x) "BBB-" or higher by S&P or (y) a Corporate Credit
Rating of investment grade assigned by S&P, with all such applicable ratings
being maintained for a period of three consecutive months, or (ii) a rating of
"Baa3" or higher by Moody's or "BBB-" or higher by S&P, with either of such
ratings being maintained for a period of six consecutive months; provided,
however, that the Company's long term senior unsecured indebtedness shall not be
regarded as Investment Grade for the purposes of the Loan Documents if one
Rating Agency assigns a rating which is more than one "notch" below investment
grade.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuer" means (a) Citibank, in its capacity as initial issuer of
Letters of Credit, and (b) any other Lender requested by the Company which has
agreed to issue Letters of Credit.
"L/C Cash Collateral Account" has the meaning specified in Subsection
8.3(a).
"Letter of Credit" means any letter of credit issued for the account
of the Company or any of its Subsidiaries by any Issuer pursuant to Section
2.17.
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of the Company to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Subsection 2.17(c).
"Letter of Credit Request" has the meaning specified in Subsection
2.17(d).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Leverage Ratio" has the meaning set forth on Schedule III.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever in respect of property
intended to assure payment of any Indebtedness or other obligation, including,
without limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a Capitalized Lease Obligation, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing, under the Uniform Commercial Code or comparable law of any jurisdiction,
of any financing statement naming the owner of the asset to which such Lien
relates as debtor.
"Loan" means a Revolving Credit Loan, a Swing Loan, a Multicurrency
Loan or a Competitive Loan.
"Loan Documents" means, collectively, this Agreement, the Guaranty,
each Local Currency Guaranty, each Letter of Credit Reimbursement Agreement, the
Collateral Documents, the Fee Letter and any documentation signed by a Loan
Party relating to any Multicurrency Loan.
"Loan Party" means each Borrower, each Guarantor and any other Person
who executes and delivers any Loan Document (other than any Lender, the
Administrative Agent, any Issuer or any Affiliate of any of them).
"Local Currency Borrower" means (a) any North American Venture,
Foreign Venture or Minority Interest Venture incorporated in a jurisdiction
other than the United States of America or any State thereof which borrows a
Local Currency Loan or (b) any such North American Venture or Foreign Venture
which requests the issuance of a Local Currency Letter of Credit.
"Local Currency Guaranty" means each guaranty which is permitted
pursuant to Section 7.11(c) substantially in the form of Exhibit M in favor of a
Local Currency Lender providing for the guaranty by the Company of a Local
Currency Borrower's obligations under a Local Currency Loan and/or a Local
Currency Letter of Credit specifically identified therein, which guaranty is
secured by the Collateral to the extent that all the Obligations are so secured.
"Local Currency Lender" means any Lender or any Affiliate of any such
Lender which makes a Local Currency Loan or issues a Local Currency Letter of
Credit to a Local Currency Borrower.
"Local Currency Letter of Credit" means any letter of credit issued
for the account of a Local Currency Borrower (other than a Minority Interest
Venture) which has the benefit of a Local Currency Guaranty.
"Local Currency Loan" means any loan made to a Local Currency Borrower
by a Local Currency Lender which has the benefit of a Local Currency Guaranty.
"Majority Lenders" means, at any time, Lenders holding at least 51% of
the Commitments; provided, however, that if the Commitments have been
terminated, it means Lenders holding at least 51% of the outstanding Loans.
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Company and its Subsidiaries taken as one
enterprise, (b) the ability of the Borrowers to repay the Obligations or of any
Loan Party to perform its obligations under any Loan Document, or (c) the rights
and remedies of the Lenders, the Issuers or the Administrative Agent under the
Loan Documents, taken as a whole.
"Material Adverse Effect" means an effect that results in or causes,
or has a reasonable likelihood of resulting in or causing, a Material Adverse
Change.
"Minority Interest Venture" means any corporation, partnership or
other business entity (a) of which 50% or less (but more than 0%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by the Company and/or one or more
Subsidiaries of the Company (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency) and (b) which conducts a business
similar to that conducted by any Borrower or Guarantor.
"Moody's" means Moody's Investor Services, Inc.
"Mortgages" means the mortgages or deeds of trust made or required
herein to be made by the Company or any of the Guarantors in form and substance
satisfactory to the Administrative Agent, in its reasonable judgment, as such
Mortgages may be amended, supplemented or otherwise modified from time to time.
"Multicurrency Borrowing" means a borrowing consisting of a
Multicurrency Loan.
"Multicurrency Lender" means each Lender whose name is set forth in
Part III of Schedule I or such other Lender which agrees to act as a
Multicurrency Lender hereunder.
"Multicurrency Loan" means a Loan made by a Multicurrency Lender to
any Borrower pursuant to Section 2.21.
"Multicurrency Loan Facility" means the facility whereby the
Multicurrency Lenders may agree to make Multicurrency Loans.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, and to which the Company, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make in the six years preceding the date of termination, contributions on behalf
of participants who are or were employed by any of them.
"NationsBank Loan" means the obligations of the Company under that
certain term loan or term loans made pursuant to a credit agreement dated as of
May 23, 1997 between the Company and NationsBank of Texas, N.A. in an aggregate
principal amount of up to $25,000,000 to finance the Company's acquisition of
all of the capital stock of The Shoe Studio Group Limited, a company located in
the United Kingdom.
"Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP.
"Net Interest Expense" means, for any Person for any period, gross
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP, less (a) the following for such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP: the sum of (i) interest capitalized during construction for such
period, (ii) interest income for such period, and (iii) gains for such period on
Interest Rate Contracts (to the extent not included in interest income above and
to the extent not deducted in the calculation of such gross interest expense),
plus (b) the following for such Person and its Subsidiaries determined on a
consolidated basis in conformity with GAAP: the sum of (i) losses for such
period on Interest Rate Contracts (to the extent not included in such gross
interest expense), and (ii) the amortization of upfront costs or fees for such
period associated with Interest Rate Contracts (to the extent not included in
gross interest expense).
"Net Worth" of any Person means, at any date, the excess of the Total
Assets of such Person at such date over the Total Liabilities of such Person at
such date.
"Non-Cash Interest Expense" means, for any Person for any period, the
sum of the following amounts to the extent included in Net Interest Expense of
such Person for such period: (a) the amount of amortized debt discount and debt
issuance costs, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Indebtedness, and (c) interest payable in evidences
of Indebtedness or otherwise not payable in cash during such period.
"North American Venture" means any Domestic Subsidiary (other than a
Guarantor, Funding and Pappagallo) and any Subsidiary of the Company
incorporated, organized or formed under the laws of Canada or any province of
Canada.
"Notice of Borrowing" has the meaning specified in Subsection 2.3(a).
"Notice of Competitive Bid Request" means a notice provided pursuant
to Section 2.20 in substantially the form of Exhibit J.
"Notice of Continuation or Conversion" has the meaning specified in
Subsection 2.8.
"Obligations" means the Loans, the Letter of Credit Obligations and
all other advances, debts, liabilities, obligations, covenants and duties owing
by any Borrower to the Administrative Agent, any Lender, any Issuer, any
Affiliate of any of them or any Indemnitee, of every type and description,
present or future, whether or not evidenced by any note, guaranty or other
instrument, arising under this Agreement or under any other Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, opening or amendment of a Letter of Credit or payment of
any draft drawn thereunder, loan, guaranty, indemnification, any Interest Rate
Contract entered into to provide protection against fluctuations in interest
rate exposure under the Loan Documents, or in any other manner, whether direct
or indirect (including, without limitation, those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired under this Agreement or any other Loan Document. The term
"Obligations" includes, without limitation, all interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum chargeable to any
Borrower under this Agreement or any other Loan Document and all obligations of
the Company to cash collateralize Letter of Credit Obligations.
"Open Year" has the meaning specified in Subsection 4.3(c).
"Operating Assets" means assets employed by any Loan Party in the
operation of its business (including, without limitation, assets constituting
property, plant or equipment but excluding assets held for investment).
"Other Taxes" has the meaning specified in Subsection 2.15(b).
"Pappagallo" means The Shops for Pappagallo, Inc., an Ohio
corporation.
"Passive Institutional Investor" means any broker, dealer, bank,
insurance company, investment company, investment adviser, employee benefit
plan, pension fund or other institutional investor directly or indirectly owning
Stock of the Company to the extent such Person acquires such ownership in the
ordinary course of its business and acquires and continues to hold such
ownership not with the purpose nor the effect of changing or directing the
control, management or policies of such Person.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, and which the
Company, any of its Subsidiaries or, if a Title IV Plan, any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Investor" means (a) a Passive Institutional Investor,
(b) any group, as determined in accordance with Section 13(d) of the Exchange
Act, consisting solely of Passive Institutional Investors, (c) Jerome Fisher,
his Affiliates, immediate family members and lineal descendants, and (d) Vincent
Camuto, his Affiliates, immediate family members and lineal descendants.
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
"Pledge Agreement" means the pledge agreement dated as of May 23,
1995, executed by the Company, as amended by Amendment No. 1 thereto dated as of
December 28, 1995, Amendment No. 2 thereto dated as of August 2, 1996 and
Amendment No. 3 thereto, in the form of Exhibit E, and as such agreement may be
further amended, supplemented or otherwise modified from time to time.
"Qualified Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which the Company, any of its Subsidiaries or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them, other than a
Multiemployer Plan or plan subject to Section 4063 of ERISA.
"Ratable Portion" or "ratably" means, with respect to any Lender, the
quotient obtained by dividing the Commitment of such Lender by the Commitments
of all Lenders; provided, however, that if the Commitments have been terminated,
it means the quotient obtained by dividing the outstanding principal amount of
the Loans of such Lender by the outstanding principal amount of all Loans of all
Lenders.
"Rating Agency" means each of Moody's and S&P.
"Receivables Purchase Agreement" means (i) the Receivables Purchase
Agreement dated as of December 28, 1995, between the Company and Funding, and
(ii) the Receivables Purchase Agreement dated as of December 28, 1995, between
the Company and Nine West Footwear Corporation, as each may be amended,
supplemented or otherwise modified from time to time.
"Receivables Securitization" means the transactions described and
contemplated in the Receivables Purchase Agreement.
"Register" has the meaning specified in Subsection 11.7(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Company to each Issuer for payment by such Issuer
of any draft drawn under Letters of Credit pursuant to Letter of Credit
Reimbursement Agreements.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration, in
each case of any Hazardous Material, into the indoor or outdoor environment or
into or out of any property owned or operated by such Person, including, without
limitation, the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(c) perform pre-remedial studies and investigations and post-remedial monitoring
and care.
"Reportable Event" means any of the events described in Sections
4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state, local and foreign laws, rules and regulations,
and all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, any of the
executive officers of such Person including, without limitation, any Senior Vice
President of such Person.
"Revolving Credit Borrowing" means a Borrowing consisting of Revolving
Credit Loans made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments.
"Revolving Credit Commitment" means, as to each Lender, the commitment
of such Lender to make Revolving Credit Loans to the Borrowers pursuant to
Section 2.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on Part I of Schedule I under the
caption "Revolving Credit Commitment," as such amount may be reduced or modified
pursuant to this Agreement, and, in the case of each Swing Bank, "Revolving
Credit Commitment" includes the Swing Commitment of such Swing Bank.
"Revolving Credit Loan" means a Loan made by a Lender to any Borrower
pursuant to Section 2.1.
"Revolving Credit Note" means a promissory note of the Borrowers
delivered pursuant to Section 2.6(h), substantially in the form of the original
Notes referred to in Section 11.16.
"S&P" means Standard & Poors Ratings Group.
"Secured Parties" means the Lenders, the Issuers and the
Administrative Agent.
"Securitization Documents" means each agreement, document and
instrument entered into by the Company, a Guarantor or Funding in connection
with the Receivables Securitization, including without limitation, the
Receivables Purchase Agreement, the promissory note(s) of Funding in favor of
the Company made in connection therewith and the promissory note(s) of the
Company in favor of Funding made in connection therewith.
"Security Agreement" means the security agreement dated as of May 23,
1995, executed by the Company, as amended by Amendment No. 1 thereto dated as of
December 28, 1995 and Amendment No. 2 thereto dated as of August 2, 1996, and as
such agreement may be further amended, supplemented or otherwise modified from
time to time.
"Senior Notes" means the 8 3/8% Senior Notes due 2005 of the Company,
containing at all times terms and conditions satisfactory to the Majority
Lenders, in their reasonable judgment.
"Senior Subordinated Notes" means the 9% Senior Subordinated Notes due
2007 of the Company, containing at all times terms and conditions satisfactory
to the Majority Lenders, in their reasonable judgment.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including, without limitation, contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities of any Person at any time, such liabilities will be
computed at the amount which, in 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 a Letter of Credit other than a
Documentary Letter of Credit.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of more than 50% of
the outstanding Stock having ordinary voting power to elect a majority of the
board of directors, managers, trustees or other controlling persons, is, at the
time, directly or indirectly, owned or controlled by such Person and/or one or
more Subsidiaries of such Person (irrespective of whether, at the time, Stock of
any other class or classes of such entity shall have or might have voting power
by reason of the happening of any contingency); provided, however, that the
receivables master trust established by Funding in connection with the
Receivables Securitization shall not constitute a Subsidiary of the Company or
any of its Subsidiaries.
"Subsidiary Security Agreement" means each of (i) the Subsidiary
Security Agreement, dated May 23, 1995, made by each of Nine West Footwear
Corporation, Nine West Distribution Corporation, Nine West Boot Corporation,
Nine West Manufacturing Corporation and Community Urban Redevelopment of Duck
Creek, Inc. in favor of the Administrative Agent, as amended by Amendment No. 1,
dated December 28, 1995 and Amendment No. 2, dated August 2, 1996, and (ii) the
Subsidiary Security Agreement, dated August 2, 1996, made by Nine West
Development Corporation in favor of the Administrative Agent, as such agreements
may be further amended, supplemented or otherwise modified from time to time.
"Swing Bank" means each Lender whose name is set forth on Part II of
Schedule I or such other Lender which agrees to act as a Swing Bank hereunder.
"Swing Commitment" means, as to each Swing Bank, the commitment of
such Swing Bank to make Swing Loans to the Borrowers pursuant to Section 2.20 in
the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Swing Bank's name on Part II of Schedule I under the caption
"Swing Commitment," as such amount may be reduced or modified pursuant to this
Agreement.
"Swing Loan" means a Loan made by a Swing Bank to the Company pursuant
to Section 2.19.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Tax Affiliate" means, as to any Person, (a) any Subsidiary of such
Person, and (b) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.
"Tax Returns" has the meaning specified in Section 4.3.
"Taxes" has the meaning specified in Subsection 2.15(a).
"Termination Date" means the earliest of (a) five years from the
Closing Date and (b) the date of termination in whole of the Commitments
pursuant to Section 2.5 or 8.2.
"Title IV Plan" means a Pension Plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP.
"Total Liabilities" of any Person means, at any date, all obligations
which in conformity with GAAP would be included in determining total liabilities
as shown on the liabilities side of a consolidated balance sheet of such Person
and its Subsidiaries at such date, and in any event includes, without
limitation, all Indebtedness of such Person or any of its Subsidiaries at such
date whether or not the same would be so shown.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person of which 100% (other than director's qualifying
shares) of the outstanding Stock having ordinary voting power to elect all of
the directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, as to the Company at any time, the
aggregate amount of the liabilities of the Company, any of its Subsidiaries or
any ERISA Affiliate pursuant to Section 4201 of ERISA, and any increase in
contributions required to be made pursuant to Section 4243 of ERISA, with
respect to all Multiemployer Plans.
"Working Capital" means, for any Person at any date, the amount by
which the Current Assets of such Person at such date exceeds the Current
Liabilities of such Person at such date.
1.2. 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" and the word "through" means "to and including."
1.3. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, Subsection or clause in this
Agreement. References herein to an Exhibit, Schedule, Article, Section,
Subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, Subsection or clause in this Agreement.
(b) The terms "Lender," "Issuer," and "Administrative Agent" include
their respective successors and the terms "Lender" and "Issuer" include each
assignee of such Lender or Issuer who becomes a party hereto pursuant to Section
11.7.
(c) Upon the appointment of any successor Administrative Agent
pursuant to Section 9.6, references to Citibank in Section 9.3 and in the
definitions of Eurodollar Rate shall be deemed to refer to the successor then
acting as the Administrative Agent.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Revolving Credit Loans. (a) On the terms and subject to
the conditions contained in this Agreement, on the Effective Date each Lender
severally agrees to make a loan (each a "Revolving Credit Loan") to the Company
in an aggregate amount sufficient to repay the principal amount of all Revolving
Credit Loans outstanding on the Effective Date; provided, however, to the extent
that any Lender has Revolving Credit Loans outstanding under the Existing Credit
Agreement ("Existing Revolving Credit Loans") and is making a Revolving Credit
Loan on the Effective Date, such Existing Revolving Credit Loans shall be deemed
a Revolving Credit Loan made on the Effective Date.
(b) On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make from and after the Effective
Date Revolving Credit Loans to the Borrowers from time to time on any Business
Day during the period from the date hereof until the Business Day preceding the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Revolving Credit Commitment; provided, however, that at no time
shall any Lender be obligated to make a Revolving Credit Loan in excess of such
Lender's Ratable Portion of the Available Credit. In no event shall any Swing
Bank be obligated to make any Revolving Credit Loan or Swing Loan or participate
in any Letter of Credit if the sum of outstanding Revolving Credit Loans and
Swing Loans made or to be made by such Swing Bank and its aggregate
participation in the Letter of Credit Undrawn Amounts and Reimbursement
Obligations would exceed its Revolving Credit Commitment at such time.
(c) Within the limits of each Lender's Revolving Credit Commitment,
amounts prepaid pursuant to Section 2.7 may be reborrowed under this Section
2.1.
2.2. The Letters of Credit. All Letter of Credit Undrawn Amounts
outstanding on the Effective Date with respect to Letters of Credit issued by an
Issuer shall become on the Effective Date Letter of Credit Undrawn Amounts
outstanding hereunder owed to such Issuer.
2.3. Making the Loans. (a) Each Revolving Credit Borrowing shall be
made on notice, given by the Company on behalf of itself or one or more of the
other Borrowers, as the case may be, to the Administrative Agent not later than
12:00 P.M. (New York City time) on the Business Day of the proposed Revolving
Credit Borrowing, in the case of Revolving Credit Loans that are to be made as
Base Rate Loans, and on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing, in the case of Revolving Credit Loans that are to be
made as Eurodollar Rate Loans. Each such notice (a "Notice of Borrowing") shall
be in substantially the form of Exhibit A, specifying therein (i) the date of
such proposed Revolving Credit Borrowing, (ii) the aggregate amount of such
proposed Revolving Credit Borrowing, (iii) the amount thereof, if any, requested
to be Eurodollar Rate Loans, (iv) the initial Interest Period or Periods for any
such Eurodollar Rate Loans, and (v) the identity of the Borrower of such
proposed Revolving Credit Borrowing. The Revolving Credit Loans shall be made
as Base Rate Loans unless (subject to Section 2.12) the Notice of Borrowing
specifies that all or a pro rata portion thereof shall be Eurodollar Rate Loans;
provided, however, that the aggregate of the Eurodollar Rate Loans for each
Interest Period must be in an amount of not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof; and provided, further, that no more
than ten Interest Periods may be outstanding for all Loans at any time.
(b) The Administrative Agent shall give to each Lender prompt notice
of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate under Subsection 2.9(b). Each Lender shall, before
2:00 p.m. (New York City time) on the date of the proposed Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 11.2, in immediately available
funds, such Lender's Ratable Portion of such proposed Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Company or such other Borrower or Borrowers, as
the case may be, at the Administrative Agent's aforesaid address.
(c) Each Revolving Credit Borrowing shall be in an aggregate amount
of not less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(d) Each Notice of Borrowing shall be irrevocable and binding on the
Company and each other Borrower, if any, on whose behalf the Notice of Borrowing
was made (if applicable). In the case of any proposed Borrowing which the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Loans, the relevant 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 proposed
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including, without limitation, 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 any Eurodollar Rate
Loan to be made by such Lender as part of such proposed Borrowing when such
Eurodollar Rate Loan, as a result of such failure, is not made on such date,
assuming for such purpose that such Lender will fund such Eurodollar Rate Loan
in the London interbank eurodollar market with a loan of the same amount and
Interest Period as such Eurodollar Rate Loan.
(e) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any proposed Borrowing that such Lender will not
make available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.3 and the Administrative Agent may,
in reliance upon such assumption, make available to the relevant Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such Ratable Portion available to the Administrative Agent,
such Lender and the relevant Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of each Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. If a Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have to such Borrower hereunder.
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(g) Each Swing Loan Borrowing shall be made upon such notice as the
Swing Bank and the Company shall agree and shall bear interest at a rate to be
agreed between the Swing Bank and the Company.
(h) Each Multicurrency Borrowing shall be made on such notice as the
Multicurrency Lenders and the Company or the relevant Borrower shall agree and
shall bear interest at a rate to be agreed between the Multicurrency Lenders and
the Company (on behalf of the relevant Borrower).
(i) Each Competitive Borrowing shall be made, in the case of a
Eurodollar Competitive Borrowing, three Business Days following the
Administrative Agent's receipt of the Company's decision to accept a Competitive
Bid and, in the case of a Fixed Rate Borrowing, the same Business Day as the
Administrative Agent's receipt of the Company's decision to accept a Competitive
Bid, all in accordance with the provisions of Section 2.20(d).
(j) In connection with the Competitive Loans, the Administrative
Agent shall give prompt notice to the Lender or Lenders whose Competitive Bid
was accepted of such acceptance. Each Lender whose Competitive Bid was accepted
shall, before 12:00 P.M. (New York City time) on the date of the proposed
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at its address referred to in Section 11.2, in
immediately available funds, the amount committed by such Lender in its
Competitive Bid(s) (a Lender's "Competitive Loan Obligation"). After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Company at the Administrative Agent's aforesaid
address.
(k) Each Notice of Borrowing or Accepted Competitive Bid shall be
irrevocable and binding on the Company (and, in the case of each Notice of
Borrowing, each other Borrower on whose behalf the Notice of Borrowing was
delivered, if applicable). In the case of any proposed Borrowing which the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Loans and in the case of the Competitive Loans, the Company 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 or Accepted Competitive Bid for such proposed Borrowing or Loan the
applicable conditions set forth in Article III, including, without limitation,
any loss (including, without limitation, loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Loan to be made by such Lender
as part of such proposed Borrowing when such Loan, as a result of such failure,
is not made on such date.
(l) Each Lender may book any Loan at any Applicable Lending Office
selected by such Lender and may change its Applicable Lending Office with
respect to any Loan from time to time. Each Lender may, by written notice to
the Administrative Agent and the Company, designate replacement or additional
Applicable Lending Offices through which Loans will be made by it and for whose
account payments are to be made.
2.4. Fees. (a) The Company agrees to pay to each Lender a facility
fee (the "Facility Fee") on such Lender's Commitment from the date hereof until
the Termination Date at the rates, and payable at the times, specified on
Schedule III.
(b) The Company has agreed to pay to the Administrative Agent an
administrative agency fee, the amount and dates of payment of which are embodied
in a separate agreement, dated July 14, 1997, between the Company and Citibank
(the "Fee Letter").
(c) The Company has agreed to pay to the Administrative Agent for the
account of each Lender (other than Citibank), an upfront fee calculated at the
following rates:
(i) For each Lender whose Commitment is $50,000,000 or
more: 0.080% of such Lender's Commitment.
(ii) For each Lender whose Commitment is
$40,000,000 to $49,999,999: 0.065% of such Lender's Commitment.
(iii) For each Lender whose Commitment is $25,000,000 to
$39,999,999: 0.050% of such Lender's Commitment.
Upfront Fees are payable on or before the Effective Date.
2.5. Amendment, Reduction and Termination of the Commitments.
(a) On the Effective Date, the "Revolving Credit Commitments" outstanding under
the Existing Credit Agreement shall be amended as set forth under the heading
"Revolving Credit Commitments" in Part I of Schedule I.
(b) The Company (on behalf of itself and the other Borrowers) may,
upon at least three Business Days' prior notice to the Administrative Agent,
terminate in whole or reduce ratably in part the unused portions of the
respective Revolving Credit Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof. Amounts so
reduced or terminated pursuant to this Section 2.5 will not be available for
reborrowing.
2.6. Repayment; Evidence of Indebtedness. (a) Each Borrower shall
repay the entire unpaid principal amount of the Revolving Credit Loans made to
it on the Termination Date.
(b) The Company shall repay the entire unpaid principal amount of
each Competitive Loan on the last day of the Interest Period applicable to such
Loan and on the Termination Date.
(c) The Company shall repay the entire unpaid principal amount of the
Swing Loans on the Termination Date to the extent not theretofore repaid
pursuant to Section 2.19.
(d) Each Borrower shall repay the entire unpaid principal amount of
the Multicurrency Loans made to it on the Termination Date to the extent not
theretofore repaid pursuant to Section 2.21.
(e) Each Lender shall maintain in accordance with its usual practice
an account or accounts with respect to the indebtedness to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid such Lender from time to time under this
Agreement.
(f) The Administrative Agent shall maintain accounts in accordance
with its usual practice in which it will record (i) the amount of each Loan made
(other than Multicurrency Loans) and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable by each Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from any Borrower and each Lender's share
thereof, if applicable.
(g) The entries made in the accounts maintained pursuant to
paragraphs (e) and (f) of this Section 2.6 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of any Borrower to repay the Loans in
accordance with their terms.
(h) Notwithstanding any other provision of the Agreement, in the
event that any Lender requests that the Company and the other Borrowers execute
and deliver a promissory note or notes payable to such Lender, substantially in
the form of the original Notes described in Section 11.16, in order to evidence
the indebtedness owing to such Lender by the Company and the other Borrowers
hereunder, the Company and such other Borrowers will promptly execute and
deliver such note or notes to such Lender, and the interests evidenced by such
note or notes shall at all times (including after assignment of all or part of
such interests) be evidenced by one or more notes payable to the payee named
therein or its registered assigns.
2.7. Prepayments. (a) No Borrower shall have the right to prepay
the principal amount of any Loan other than as provided in this Section 2.7.
(b) Each Borrower may (i) upon at least three Business Days' prior
notice to the Administrative Agent, in the case of Eurodollar Rate Loans and
(ii) on or after the date of written notice to the Administrative Agent, in the
case of Base Rate Loans, stating in such notice the proposed date and aggregate
principal amount of the prepayment, prepay the outstanding principal amount of
the Swing Loans or Revolving Credit Loans, as the case may be, in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that each partial prepayment
of Revolving Credit Loans shall be in an aggregate principal amount not less
than $1,000,000 or integral multiples of $1,000,000 in excess thereof. Upon the
giving of such notice of prepayment, the principal amount of the Swing Loans or
Revolving Credit Loans, as the case may be, specified to be prepaid shall become
due and payable on the date specified for such prepayment.
(c) The Company shall, within five Business Days of the end of each
calendar month (or more frequently as the Company may desire) while any
Multicurrency Loans are outstanding, notify the Administrative Agent in writing
of the principal amount, Multicurrency Lender, Borrower, currency and maturities
of all Multicurrency Loans then outstanding and shall immediately prepay an
aggregate principal amount of the Multicurrency Loans then outstanding equal to
the amount, if any, by which the Dollar Equivalent of all Multicurrency Loans
then outstanding exceeds $250,000,000. Any such prepayment shall be applied
towards the Multicurrency Loans in such manner as the Company shall direct. The
aggregate principal amount of Multicurrency Loans shall be determined based on
the Dollar Equivalent of the outstanding Multicurrency Loans in the relevant
Alternative Currency at 11:00 a.m. (New York time) on the date of any such
prepayment.
2.8. Conversion/Continuation Option. The Company (on behalf of
itself and the other Borrowers) may elect (a) at any time to convert Base Rate
Loans or any portion thereof to Eurodollar Rate Loans, or (b) at the end of any
Interest Period with respect thereto, to convert Eurodollar Rate Loans or any
portion thereof into Base Rate Loans or to continue such Eurodollar Rate Loans
or any portion thereof for an additional Interest Period; provided, however,
that the aggregate of the Eurodollar Loans for each Interest Period must be in
the amount of $1,000,000 or an integral multiple of $1,000,000 in excess
thereof. Each conversion or continuation shall be allocated among the Lenders
in accordance with their respective Ratable Portions. Each such election shall
be in substantially the form of Exhibit B hereto (a "Notice of Conversion or
Continuation") and shall be made by giving the Administrative Agent at least
(x) three Business Days' prior written notice thereof, in the case of the
conversion of Base Rate Loans into Eurodollar Rate Loans or the continuation of
Eurodollar Rate Loans, and (y) one Business Day's prior written notice thereof,
in the case of the conversion of Eurodollar Rate Loans into Base Rate Loans, in
each case specifying (i) the amount and type of Loan being converted or
continued, (ii) in the case of a conversion to or a continuation of Eurodollar
Rate Loans, the Interest Period therefor, and (iii) in the case of a conversion,
the date of conversion (which date shall be a Business Day and, if a conversion
from Eurodollar Rate Loans, shall also be the last day of the Interest Period
therefor). The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the contents thereof.
Notwithstanding the foregoing, (x) no conversion in whole or in part of Base
Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any Interest Period therefor, shall
be permitted at any time at which an Event of Default shall have occurred and be
continuing, and (y) any such conversion during the continuance of a Default
shall not be permitted in respect of Eurodollar Rate Loans having an Interest
Period longer than one month. If, within the time period required under the
terms of this Section 2.8, the Administrative Agent does not receive a Notice of
Conversion or Continuation from the Company containing a permitted election to
continue any Eurodollar Rate Loans for an additional Interest Period, then, upon
the expiration of the Interest Period therefor, such Loans will be automatically
converted to Base Rate Loans. Each Notice of Conversion or Continuation shall
be irrevocable. No conversion of any Swing Loan to a Eurodollar Rate Loan may
be made.
2.9. Interest. Each Borrower shall pay interest on the unpaid
principal amount of each Loan made to it from the date thereof until the
principal amount thereof shall be paid in full, at the following rates per
annum:
(a) For Base Rate Loans, at a rate per annum equal at all times to
the Base Rate in effect from time to time plus the Applicable Base Rate Margin,
payable in arrears quarterly on the first day of each January, April, July and
October, on the Termination Date and on the date any Base Rate Loan is converted
or paid in full (but only on the Base Rate Loan so converted or paid in full);
provided, however, that during the continuance of an Event of Default, all Base
Rate Loans shall bear interest, payable on demand, at a rate per annum equal at
all times to 2.00% per annum above the Base Rate in effect from time to time
plus the Applicable Base Rate Margin.
(b) For Eurodollar Rate Loans other than Competitive Loans, at a rate
per annum equal at all times during the applicable Interest Period for each such
Eurodollar Rate Loan to the sum of the Eurodollar Rate for such Interest Period
plus the Applicable LIBOR Margin in effect, payable in arrears on the last day
of such Interest Period, on the Termination Date and, if such Interest Period
has a duration of more than three months, on each day during such Interest
Period which occurs every three months from the first day of such Interest
Period; provided, however, that during the continuance of an Event of Default,
all Eurodollar Rate Loans shall bear interest, payable on demand, at a rate per
annum equal at all times to 2.00% above the Eurodollar Rate in effect from time
to time plus the Applicable LIBOR Margin.
(c) (i) For Eurodollar Rate Loans that are Competitive Loans, at a
rate per annum equal at all times during the applicable Interest Period for each
such Eurodollar Rate Loan to the sum of the Eurodollar Rate for such Interest
Period plus or minus the Eurodollar Competitive Borrowing Margin for such
Competitive Loan and (ii) for Fixed Rate Loans, at a rate per annum (computed
based on a year of 365 or 366 days, as the case may be) equal at all times to
the fixed rate of interest offered by the Lender making such Loan and accepted
by the Company pursuant to Section 2.20; provided, however that interest on each
Competitive Loan shall be payable on the last day of the applicable Interest
Period, on the Termination Date and if such Interest Period has a duration of
more than three months, on each day during such Interest Period which occurs
every three months from the first day of such Interest Period.
(d) For Multicurrency Loans, at a rate per annum to be agreed upon
between the Multicurrency Lender and the Company (on behalf of the relevant
Borrower) at the time of the making of each Multicurrency Loan
(e) For the purposes of the Interest Act (Canada), the annual rate of
interest to which each interest rate referred to in this Agreement is equal, and
the annual rate to which each fee referred to herein is equal, is each such
interest rate or fee multiplied by a fraction the numerator of which is the
total number of days in the year and the denominator of which is 365 (in the
case of interest or any such fee computed on the basis of a year of 365 days) or
360 (in the case of interest or any such fee computed on the basis of a year of
360 days).
2.10. Interest Rate Determination.
(a) The Eurodollar Rate for each Interest Period for Eurodollar Rate
Loans shall be determined by the Administrative Agent two Business Days before
the first day of such Interest Period.
(b) If, with respect to Eurodollar Rate Loans, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
therefor will not adequately reflect the cost to such Majority Lenders of making
such Loans or funding or maintaining their respective Eurodollar Rate Loans for
such Interest Period, the Administrative Agent shall forthwith so notify the
Company and the Lenders, whereupon:
(i) each Eurodollar Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Loan;
and
(ii) the obligations of the Lenders to make Eurodollar Rate
Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Administrative Agent shall notify the Company that such
Lenders have determined that the circumstances causing such suspension no
longer exist.
(c) Any increase or reduction in the Applicable Margin set forth on
Schedule III, as the case may be, shall take effect on the third Business Day
following receipt by the Administrative Agent of any quarterly certificate
delivered to the Administrative Agent pursuant to Section 6.10(a)(iv).
2.11. Increased Costs. If, due to either (a) the introduction of or
any change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (b) 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 with respect to taxes excluded from the definition of "Taxes")
to any Lender of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Company shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Company and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error. If the Company so notifies the Administrative
Agent within five Business Days after any Lender notifies the Company of any
increased cost pursuant to the foregoing provisions of this Section 2.11, the
Borrowers may, at the Company's election, either (A) prepay in full all
Eurodollar Rate Loans of such Lender then outstanding in accordance with
Subsection 2.7(b) and, additionally, reimburse such Lender for such increased
cost in accordance with this Section 2.11 or (B) convert all Eurodollar Rate
Loans of all Lenders then outstanding into Base Rate Loans in accordance with
Section 2.8 and, additionally, reimburse such Lender for such increased cost in
accordance with this Section 2.11.
2.12. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Company through the Administrative Agent, (a) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (b) the
Borrowers shall, at the Company's election, either prepay in full all Eurodollar
Rate Loans of such Lender then outstanding, together with interest accrued
thereon or convert such Eurodollar Rate Loans to Base Rate Loans; provided,
however, that if the Company does not make such election within five Business
Days of such notice, all such Eurodollar Rate Loans shall automatically convert
into Base Rate Loans as of such fifth Business Day unless an earlier date for
such conversion is required by law.
2.13. Capital Adequacy. If (a) the introduction of or any change in
or in the interpretation of any law or regulation, (b) compliance with any law
or regulation, or (c) compliance with 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 any Lender or any corporation controlling any Lender and such
Lender reasonably determines that such amount is based upon the existence of
such Lender's Commitments and Loans and its other commitments and loans of this
type, then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrowers shall, at the Company's election, pay to
the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's Commitments and Loans. A certificate as to such amounts
submitted to the Company and the Administrative Agent by such Lender shall be
conclusive and binding for all purposes absent manifest error.
2.14. Payments and Computations. (a) Each Borrower shall make each
payment required to be made by it hereunder, (i) in the case of a Loan or part
thereof, in the currency in which such Loan is denominated at the time such Loan
was made, (ii) in the case of interest, in the currency in which the Loan on
which such interest is payable is denominated and (iii) in the case of fees,
costs and expenses, in the currency in which the same were incurred.
(b) Each Borrower shall make each payment hereunder (i) in the case
of a payment amount denominated in Dollars, not later than 11:00 A.M. (New York
City time) on the day when due, and (ii) in the case of a payment amount
denominated in an Alternative Currency, not later than 11:00 A.M. local time at
the place where payment is to be made, in each case in immediately available
funds without set-off or counterclaim. All payments in Dollars shall be made to
the Administrative Agent at its address referred to in Section 11.2. The
Administrative Agent will promptly after receipt by it of any such payment
cause to be distributed immediately available funds relating to the payment of
principal or interest or fees in Dollars to the Lenders, in accordance with
their respective Ratable Portions in the Loan being repaid 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; provided, however, that following the Termination
Date all such amounts shall be applied to the Obligations pro rata in accordance
with the amounts owed to the Lenders and the Administrative Agent and that
amounts payable pursuant to Sections 2.11, 2.13 and 2.15 shall be paid only to
the affected Lender or Lenders. Payment received by the Administrative Agent
after 11:00 A.M. (New York City time) shall be deemed to be received on the next
Business Day. All payments in an Alternative Currency shall be made to the
Multicurrency Lender which made such Multicurrency Loan at the address specified
to the Multicurrency Borrower by such Multicurrency Lender.
(c) All computations of interest in connection with Fixed Rate
Borrowings shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Base Rate, the Eurodollar Rate and the Federal Funds Rate and of fees
hereunder shall be made by the Administrative 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 and
fees are payable. Each determination by the Administrative Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fee, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Rate Loan to be made in the next calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Company (on behalf of itself and the other Borrowers, as applicable) prior
to the date on which any payment is due hereunder to the Lenders that the
Company or such other Borrower or Borrowers will not make such payment in full,
the Administrative Agent may assume that the Company or any such Borrower has
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Company or such Borrower shall not
have so made such payment in full to the Administrative Agent, each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) With respect to the Competitive Loans, each payment of principal
of any Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Competitive Borrowing in accordance with the respective
principal amounts of their outstanding Loans comprising such Competitive
Borrowing. Each payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Competitive Borrowing
in accordance with the respective amounts of accrued and unpaid interest on
their outstanding Competitive Loans comprising such Competitive Borrowing.
2.15. Taxes. (a) Any and all payments by a Loan Party under each
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in the
case of each Lender, each Issuer and the Administrative Agent, taxes measured by
its net income, and franchise taxes imposed on it, by any jurisdiction (or any
political subdivision thereof) under the laws of which such Person is organized
or qualified to do business, (ii) in the case of any Lender, taxes measured by
its net income, and franchise taxes imposed on it, by the jurisdiction (or any
political subdivision thereof) in which is located such Lender's Applicable
Lending Office, (iii) in the case of each Lender, each Issuer and the
Administrative Agent either organized under the laws of a jurisdiction in the
United States or engaged in a trade or business within the United States or, if
a tax treaty is applicable to such Person on the Effective Date (or the date of
an Assignment and Acceptance), engaged in a trade or business within the United
States through a permanent establishment, United States federal income taxes on
its net income, and (iv) in the case of each Lender organized under the laws of
a jurisdiction outside the United States, United States federal withholding tax
payable with respect to payments by the Company which would not have been
imposed had such Lender, to the extent required under Section 2.15(f), delivered
to the Borrower and the Administrative Agent the forms prescribed thereunder
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If a Loan Party
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Administrative Agent (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including, without limitation, deductions applicable to additional
sums payable under this Section 2.15) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Loan Party shall make such
deductions, (iii) such Loan Party shall pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law,
and (iv) such Loan Party shall deliver to the Administrative Agent evidence of
such payment to the relevant taxing or other authority.
(b) In addition, each Loan Party agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from any payment made under any Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, any Loan Document (collectively, "Other Taxes").
(c) Each Loan Party will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including, without limitation, for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Loan Party which made such payment will furnish to the Administrative
Agent, at its address referred to in Section 11.2, the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder, the agreements and obligations of each Loan Party
contained in this Section 2.15 shall survive the payment in full of the
Obligations.
(f) Prior to the Effective Date in the case of each initial Lender,
and prior to 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 either required by law or reasonably requested by the Company or
the Administrative Agent (unless such Lender is unable to do so by reason of a
change in law (including, without limitation, any statute, treaty, ruling,
determination or regulation) occurring subsequent to the Effective Date or date
of Assignment and Acceptance, as the case may be), each Lender organized under
the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Company with two valid, accurate and complete
original signed copies of IRS Form 4224 or Form 1001 or other applicable form,
certificate or document prescribed by the IRS certifying as to such Lender's
entitlement to full exemption from United States withholding tax with respect to
all payments to be made to such Lender under this Agreement. Unless the Company
and the Administrative Agent have received forms or other documents indicating
that payments hereunder or under any Note are not subject to United States
withholding tax, the Company or the Administrative Agent shall, in the case of
payments to or for any Lender organized under the laws of a jurisdiction outside
the United States, withhold taxes from such payments at the applicable statutory
rate, or at a rate reduced by an applicable tax treaty (provided that the
Company or the Administrative Agent, as the case may be, has received forms or
other documents indicating that such reduced rate applies).
(g) Without limiting the generality of subsection 2.15(f), if any
portion of a Loan made to a Borrower is made available by a Lender organized
under the laws of a jurisdiction outside the jurisdiction in which such Borrower
is organized, at such Borrower's request such Lender shall provide the
Administrative Agent and such Borrower with accurate and complete original
signed copies of such tax and similar forms as may be required for such Lender
to claim exemption from withholding taxes with respect to all payments to be
made to such Lender under this Agreement that are imposed by the jurisdiction
under the laws of which such Borrower is organized. In addition, each such
Lender shall, at such Borrower's request, deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Lender.
Each such Lender shall promptly notify such Borrower and the Administrative
Agent at any time such Lender determines that it is no longer in a position to
provide any previously delivered certificate (or any other form of certification
adopted by the relevant taxing authorities for such purpose) to such Borrower
and the Administrative Agent.
2.16. Sharing of Payments, Etc. (a) If, following the Termination
Date, any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise but other than
pursuant to Section 2.11, 2.13, 2.15, 2.19 or 2.20) on account of Loans made by
it and there is any Reimbursement Obligation outstanding in respect of which the
relevant Issuer has not received payment in full from the Lenders pursuant to
Subsection 2.17(h), or if there are any Swing Loans outstanding and the Swing
Bank has not received payment in full from the Lenders pursuant to a demand or
notice made pursuant to Section 2.19(e), such Lender (a "Purchasing Lender")
shall purchase a participation in all such Reimbursement Obligations in an
amount equal to the lesser of such payment and the amount of such Reimbursement
Obligations for which such Issuer has not so received payment in full and shall
next purchase a participation in such Swing Loans in an amount equal to the
lesser of the remaining amount of such payment obtained by such Lender and the
amount of such Swing Loans for which the Swing Bank has not so received payment
in full from such Lender. If, after giving effect to the foregoing, any Lender
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off or otherwise but other than pursuant to Section 2.11,
2.13 or 2.15) on account of the Loans made by it resulting in such Lender
receiving payment of a greater share of the aggregate amount of its Loans and
accrued interest thereon than the share of any other Lender's Loans and accrued
interest thereon received by such other Lender, then such other Lender shall
forthwith purchase from the other Lenders such participations in their Loans as
shall be necessary to cause such Purchasing Lender to share the excess payment
ratably with each of them in accordance with the aggregate amount of principal
of and accrued interest on their respective Loans.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each selling Lender described in paragraph (a) above (a "Selling Lender") shall
be rescinded and such Selling Lender shall repay to the Purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Selling Lender's ratable share (according to the proportion of (i) the
amount of such Selling 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.
Each Borrower agrees that any Purchasing Lender purchasing a participation from
another Selling Lender pursuant to this Section 2.16 may, to the fullest extent
permitted by law, exercise all its rights of payment (including, without
limitation, the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
2.17. Letter of Credit Facility. (a) On the terms and subject to
the conditions contained in this Agreement, each Issuer agrees to issue one or
more Letters of Credit at the request of the Company for the account of the
Company or one or more Borrowers from time to time during the period commencing
on the date hereof and ending seven calendar days prior to the Termination Date;
provided, however, that no Issuer shall be under any obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain such Issuer
from issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is not
otherwise compensated) not in effect on the date hereof or result in any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Issuer as of the date hereof and which such Issuer in good
faith deems material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Company, on or prior to the
requested date of issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Article III is not then satisfied;
(iii) after giving effect to the issuance of such Letter of
Credit, the aggregate Letter of Credit Obligations, outstanding Swing
Loans, outstanding Competitive Loans, outstanding Multicurrency Loans and
the outstanding Revolving Credit Loans would exceed the Commitments;
(iv) after giving effect to the issuance of such Letter of
Credit, the sum of (A) the Letter of Credit Undrawn Amounts at such time
and (B) the Reimbursement Obligations at such time exceeds $150,000,000;
(v) after giving effect to the issuance of such Letter of
Credit, the sum of the Letter of Credit Undrawn Amounts and the
Reimbursement Obligations in respect of Letters of Credit denominated in a
currency other than Dollars exceeds $50,000,000; or
(vi) fees due in connection with a requested issuance have not
been paid.
None of the Lenders (other than the Issuers) shall have any obligation to issue
any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit be
(other than as a result of an extension thereof approved by the Issuer) more
than one year after the date of issuance thereof, nor shall the expiration date
of any Letter of Credit fall after seven calendar days preceding the Termination
Date unless on the date of issuance thereof, the Company or such other relevant
Borrower shall have cash collateralized such Letter of Credit to the reasonable
satisfaction of the Administrative Agent and the relevant Issuer. The Company
shall, within five Business Days of the end of each calendar month, notify the
Administrative Agent in writing of the Letter of Credit Undrawn Amounts with
respect to each Letter of Credit denominated in a currency other than Dollars in
order to determine whether the sublimit set forth in Section 2.17 (a)(v) has
been exceeded, and the Company shall pay to the Administrative Agent in
immediately available funds (for deposit in the L/C Cash Collateral Account
referred to in Section 8.3) an amount in Dollars equal to any such excess. The
Administrative Agent shall, if requested by any Borrower which has deposited
cash collateral pursuant to this Section 2.17(b), release from the L/C Cash
Collateral Account to such Borrower any cash collateral which is no longer
required by this Section 2.17(b).
(c) Prior to the issuance of each Letter of Credit, and as a
condition of such issuance and of the participation of each Lender (other than
the Issuer of such Letters of Credit) in the Letter of Credit Obligations
arising with respect thereto, the Company and any other Borrower for whose
account a Letter of Credit is to be issued shall have delivered to such Issuer a
letter of credit reimbursement agreement, in substantially the form of Exhibit C
(a "Letter of Credit Reimbursement Agreement"), signed by the Company or such
other Borrower, and such other documents or items as may be required pursuant to
the terms thereof. In the event of any conflict between the terms of any Letter
of Credit Reimbursement Agreement and this Agreement, the terms of this
Agreement shall govern.
(d) In connection with the issuance of each Letter of Credit, the
Company (on behalf of itself or one or more Borrowers) shall give the relevant
Issuer and the Administrative Agent at least two Business Days' prior written
notice (a "Letter of Credit Request"), in substantially the form of Exhibit D
(or in such other written or electronic form as is acceptable to the Issuer), of
the requested issuance of such Letter of Credit. Such notice shall be
irrevocable and shall specify the Issuer of such Letter of Credit, the stated
amount of the Letter of Credit requested, which stated amount shall not be less
than $5,000, the date of issuance of such requested Letter of Credit (which day
shall be a Business Day), the date on which such Letter of Credit is to expire
(which date shall be a Business Day), and the Person for whose benefit the
requested Letter of Credit is to be issued. Such notice, to be effective, must
be received by the relevant Issuer and the Administrative Agent not later than
11:00 A.M. (New York City time) on the last Business Day on which notice can be
given under the immediately preceding sentence.
(e) Subject to the terms and conditions of this Section 2.17 and
provided that the applicable conditions set forth in Article III are satisfied,
the relevant Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Company or such other Borrower in accordance with such Issuer's
usual and customary business practices. On the date of the proposed issuance of
the Letter of Credit, the Administrative Agent shall confirm to the relevant
Issuer that the applicable conditions in Article III are satisfied.
(f) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion of the Revolving Credit
Commitments, in such Letter of Credit and the obligations of the Company or such
other Borrower with respect thereto (including, without limitation, all Letter
of Credit Obligations with respect thereto) and any security therefor and
guaranty pertaining thereto.
(g) In determining whether to pay under any Letter of Credit, the
relevant Issuer shall not have any obligation relative to the Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the relevant Issuer under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuer under any resulting liability to
any Lender.
(h) In the event that any Issuer makes any payment under any Letter
of Credit and the Company or such other Borrower shall not have repaid such
amount to such Issuer pursuant to Subsection 2.17(l), such Issuer shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such payment in Dollars and in immediately available funds.
If the Administrative Agent so notifies such Lender prior to 11:00 A.M. (New
York City time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. If
and to the extent such Lender shall not have so made such Lender's Ratable
Portion of the amount of such payment available to the Administrative Agent for
the account of such Issuer, such Lender agrees to pay to the Administrative
Agent for the account of such Issuer forthwith on demand such amount together
with interest thereon, for each day from such date until the date such amount is
repaid to the Administrative Agent for the account of such Issuer, at the
Federal Funds Rate. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
(i) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Administrative Agent has received for the account of
such Issuer any payment from a Lender pursuant to Section 2.16 or Subsection
2.17(h), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's pro rata share of such payment based on
the respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
(j) Upon the request of any Lender, the Issuer of any Letter of
Credit shall furnish to such Lender copies of any Letter of Credit Reimbursement
Agreement to which such Issuer is a party and such other documentation as may
reasonably be requested by such Lender.
(k) The obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances (except as expressly provided in Subsection
2.17(g)), including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Collateral Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Company or such other Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Issuer, any Lender or any other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transaction (including, without
limitation, any underlying transaction between the Company or such other
Borrower and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document presented
under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Collateral
Documents; or
(v) the occurrence of any Default or Event of Default.
(l) The Company or such other Borrower, as the case may be, agrees to
pay to the Issuer of any Letter of Credit the amount of all Reimbursement
Obligations owing to such Issuer under any Letter of Credit issued for its
account no later than the time specified in the applicable Letter of Credit
Reimbursement Agreement, irrespective of any claim, set-off, defense or other
right which the Company or such other Borrower may have at any time against such
Issuer or any other Person. If the Company or such other Borrower, as the case
may be, does not pay (either from the proceeds of a Borrowing or otherwise) any
such Reimbursement Obligation when due, such Reimbursement Obligation shall be
payable on demand with interest thereon computed from the date on which such
Reimbursement Obligation arose to the date of repayment in full of such loan, at
the rate of interest applicable to past due Revolving Credit Loans bearing
interest at a rate based on the Base Rate during such period. If any payment
made by or on behalf of the Company or such other Borrower, as the case may be,
and received by such Issuer with respect to any Letter of Credit is rescinded or
must otherwise be returned by such Issuer for any reason and if such Issuer has
made payment to the Administrative Agent on account thereof pursuant to
Subsection 2.17(i), each Lender shall, upon notice by such Issuer, forthwith pay
over to such Issuer an amount equal to such Lender's pro rata share of the
amount which must be so returned by such Issuer based on the respective amounts
paid in respect thereof to the Lenders pursuant to Subsection 2.17(i).
(m) The Company and each other Borrower agrees to pay the following
amounts with respect to Letters of Credit issued for its respective account:
(i) to the Administrative Agent for the account of the Issuer of
any Standby Letter of Credit, with respect to each Standby Letter of Credit
issued by such Issuer, an issuance fee equal to 0.125% per annum (or such
lesser percentage per annum as may be agreed to between the Company and
such Issuer) of the maximum amount available from time to time to be drawn
under such Standby Letter of Credit, payable quarterly in arrears on the
first day of each Fiscal Quarter and on the termination of such Standby
Letter of Credit, and calculated on the basis of a 360-day year and the
actual number of days elapsed;
(ii) to the Administrative Agent for the account of the Issuer
of any Documentary Letter of Credit, with respect to each Documentary
Letter of Credit issued by such Issuer, an issuance fee equal to 0.10% per
annum (or such lesser percentage per annum as may be agreed to between the
Company and such Issuer) of the maximum amount available from time to time
to be drawn under such Documentary Letter of Credit, payable quarterly in
arrears on the first day of each Fiscal Quarter and on the termination of
such Documentary Letter of Credit, and calculated on the basis of a 360-day
year and the actual number of days elapsed;
(iii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Standby Letter of Credit, a fee equal to a
percentage, calculated as set forth on Schedule III, of the maximum amount
available from time to time to be drawn under such Standby Letter of
Credit, payable quarterly in arrears on the first day of each Fiscal
Quarter and on the termination of such Standby Letter of Credit, and
calculated on the basis of a 360-day year and the actual number of days
elapsed; provided that during the continuance of an Event of Default, such
fee shall be increased by 2.00% per annum and shall be payable on demand;
(iv) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Documentary Letter of Credit, a fee equal to
a percentage, calculated as set forth on Schedule III, of the maximum
amount available from time to time to be drawn under such Documentary
Letter of Credit (in the case of any Letter of Credit denominated in a
currency other than Dollars, based on the average undrawn amount thereof,
using the Dollar Equivalent, as determined by the Administrative Agent),
payable quarterly in arrears on the first day of each Fiscal Quarter and on
the termination of such Documentary Letter of Credit, and calculated on the
basis of a 360-day year and the actual number of days elapsed provided that
during the continuance of an Event of Default, such fee shall be increased
by 2.00% per annum and shall be payable on demand; and
(v) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing
made thereunder, documentary and processing charges in accordance with such
Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
(n) For purposes of this Agreement, the amount of the Letter of
Credit Undrawn Amount and the Reimbursement Obligation in respect of any Letter
of Credit denominated in a currency other than Dollars shall be equal to the
Dollar Equivalent thereof on any date of determination, as determined by the
Administrative Agent.
2.18. Substitution of Lenders. In the event that (a) (i) any Lender
makes a claim under Section 2.11 or 2.13, (ii) it becomes illegal for any Lender
to continue to fund or make any Eurodollar Rate Loan pursuant to Section 2.12,
(iii) the Company is required to make any payment pursuant to Section 2.15 that
is attributable to any Lender, or (iv) any Lender is in default of any of its
obligations hereunder or shall take or be the subject of any action or
proceeding of a type described in Subsection 8.1(f), (b) in the case of clause
(a)(i) above, as a consequence of increased costs in respect of which such claim
is made, the effective rate of interest payable to such Lender under this
Agreement with respect to its Loans materially exceeds the effective average
annual rate of interest payable to the Majority Lenders under this Agreement and
(c) Lenders holding at least 75% of the Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Company may substitute another financial institution for
such Affected Lender hereunder, upon reasonable prior written notice (which
written notice must be given within 90 days following the occurrence of any of
the events described in clauses (a)(i), (ii), (iii) or (iv)) by the Company to
the Administrative Agent and the Affected Lender that the Company intends to
make such substitution, which substitute financial institution must be an
Eligible Assignee and, if not a Lender, reasonably acceptable to the
Administrative Agent, provided that if more than one Lender claims increased
costs, illegality or right to payment arising from the same act or condition and
such claims are received by the Company within 30 days of each other then the
Company may substitute all, but not (except to the extent the Company has
already substituted one of such Affected Lenders before the Company's receipt of
the other Affected Lenders' claim) less than all, Lenders making such claims.
In the event that the proposed substitute financial institution is reasonably
acceptable to the Administrative Agent and the written notice was properly
issued under this Section 2.18, the Affected Lender shall sell and the
substitute financial institution shall purchase, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan
Documents and the substitute financial institution shall assume and the Affected
Lender shall be relieved of its Commitments and all other theretofore
unperformed obligations of the Affected Lender under the Loan Documents (other
than in respect of any damages (other than exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed
obligations). Upon the effectiveness of such sale, purchase and assumption
(which, in any event shall be conditioned upon the payment in full by the
relevant Borrowers to the Affected Lender in cash of all fees, unreimbursed
costs and expenses and indemnities accrued and unpaid through such effective
date), the substitute financial institution shall become a "Lender" hereunder
for all purposes of this Agreement having a Revolving Credit Commitment in the
amount of such Affected Lender's Revolving Credit Commitment assumed by it and
such Revolving Credit Commitment of the Affected Lender shall be terminated,
provided that all indemnities under the Loan Documents shall continue in favor
of such Affected Lender.
2.19. The Swing Loans. (a) Each Swing Bank on the terms and subject
to the conditions contained in this Agreement (including Section 3.3), agrees to
make loans (each a "Swing Loan") to the Company from time to time on any
Business Day during the period from the date hereof until the Termination Date
as provided herein in an aggregate amount at any time outstanding not to exceed
the lesser of (i) the difference between $20,000,000 and the sum of the
aggregate outstanding principal amount of the Swing Loans previously made or
(ii) the Available Credit; provided, however, that at no time may the aggregate
outstanding balance of Swing Loans exceed $20,000,000; and provided, further,
that each Swing Loan must be repaid in full within 10 days of its making or upon
any Revolving Credit Borrowing hereunder and shall in any event mature no later
than the Termination Date. In no event shall any Swing Bank be obligated to
make any Swing Loan or Revolving Credit Loan if the sum of outstanding Swing
Loans and Revolving Credit Loans made or to be made by such Swing Bank and its
aggregate participation in the Letter of Credit Undrawn Amounts and
Reimbursement Obligations would exceed its Revolving Credit Commitment or if the
Swing Loans made or to be made by such Swing Bank would exceed its Swing
Commitment. Within the limits set forth in the first sentence of this Section
2.19, amounts prepaid pursuant to Section 2.7 may be reborrowed under this
Section 2.19. The Company shall notify promptly the Administrative Agent by
telecopier, in accordance with Section 11.2, upon any reduction in the aggregate
outstanding principal amount of the Swing Loans. The Available Credit shall be
reduced by the amount of any Swing Loan made and each Lender's Ratable Portion
of the Available Credit shall be reduced by its Ratable Portion of such
reduction. Conversely, the Available Credit shall be increased by the amount of
any repayment of any Swing Loan and each Lender's Ratable Portion of the
Available Credit shall be increased by its Ratable Portion of such repayment.
(b) In order to request a Swing Loan, the Company shall telecopy to
the Administrative Agent a duly completed request (a "Swing Loan Request"), to
be received by the Administrative Agent not later than 1:00 P.M., New York City
time, on the day of the proposed borrowing. The amount of each Swing Bank's
Swing Loan will be the proportion of the amount requested which its Swing
Commitment bears to the aggregate of the Swing Commitments of all Swing Banks on
the date of receipt of the Swing Loan Request. The Administrative Agent shall
promptly notify each Swing Bank of the details of the requested Swing Loan.
Subject to the terms of this Agreement, each Swing Bank shall make its Swing
Loan available to the Administrative Agent which will make such amounts
available to the Company on the date of the relevant Swing Loan Request.
(c) Each Swing Bank shall notify the Administrative Agent in writing
(which may be by telecopy) weekly, by no later than 10:00 a.m. (New York City
time) on the first Business Day of each week, of the aggregate principal amount
of the Swing Loans then outstanding, and each Lender shall, at such times and in
the manner provided in subsection (e) below, pay to the Administrative Agent,
for the account of each Swing Bank, such Lender's Ratable Portion of such
outstanding Swing Loans.
(d) During the continuance of an Event of Default, a Swing Bank may
demand that each Lender pay to the Administrative Agent, for the account of the
Swing Bank, in the manner provided in subsection (e) below, such Lender's
Ratable Portion of all or a portion of the outstanding Swing Loans, which demand
shall be made through the Administrative Agent, shall be in writing and shall
specify the outstanding principal amount of Swing Loans demanded to be paid.
(e) The Administrative Agent shall forward each notice referred to in
subsection (c) above and each demand referred to in subsection (d) above to each
Lender on the day such notice or such demand is received by the Administrative
Agent (except that any such notice or demand received by the Administrative
Agent after 2:00 p.m. (New York City time) on any Business Day or received on a
day that is not a Business Day shall not be required to be forwarded to the
Lenders by the Administrative Agent until the next succeeding Business Day),
together with a statement prepared by the Administrative Agent specifying the
amount of each Lender's Ratable Portion of the aggregate principal amount of the
Swing Loans stated to be outstanding in such notice or demanded to be paid
pursuant to such demand, and, notwithstanding whether or not the conditions
precedent set forth in Section 3.3 shall have been satisfied, each Lender shall,
before 11:00 a.m. (New York City time) on the Business Day next succeeding the
date of such Lender's receipt of such written statement, make available to the
Administrative Agent, in immediately available funds, for the account of such
Lender, the amount specified in such statement. Upon such payment by a Lender,
such Lender shall be deemed to have made a Revolving Credit Loan to the
Borrower. The Administrative Agent shall use such funds to repay the Swing
Loans to the Swing Bank. To the extent that any Lender fails to make such
payment available to the Administrative Agent for the account of the Swing Bank,
the Company shall repay such Swing Loan on demand.
(f) During the continuance of a Default under Section 8.1(f), each
Lender shall acquire, without recourse or warranty, an undivided participation
in each Swing Loan otherwise required to be repaid by such Lender pursuant to
subsection (e) above, which participation shall be in a principal amount equal
to such Lender's Ratable Portion of such Swing Loan, by paying to the Swing Bank
on the date on which such Lender would otherwise have been required to make a
payment in respect of such Swing Loan pursuant to subsection (e) above, in
immediately available funds, an amount equal to such Lender's Ratable Portion of
such Swing Loan. If such amount is not in fact made available by such Lender to
the Swing Bank on such date, the Swing Bank shall be entitled to recover such
amount on demand from such Lender together with interest accrued from such date
at the Federal Funds Rate for three Business Days and thereafter at the rate of
interest then applicable to Base Rate Loans.
(g) From and after the date on which any Lender is deemed to have
made a Revolving Credit Loan pursuant to subsection (e) above with respect to
any Swing Loan or purchases an undivided participation interest in a Swing Loan
pursuant to subsection (f) above, a Swing Bank shall promptly distribute to such
Lender such Lender's pro rata share of all payments of principal of and interest
received by the Swing Bank on account of such Swing Loan other than those
received from a Lender pursuant to Section 2.19(d).
2.20. The Competitive Loans. (a) On the terms and subject to the
Competitive Bid Procedure set forth in this Section 2.20, the Company may
request Competitive Bids of the Lenders and each Lender may make available to
the Company one or more Competitive Loans. The amount of any Competitive
Borrowing made at any time shall not exceed the Available Credit at such time.
Each such Competitive Borrowing shall be comprised of one or more Eurodollar
Competitive Loans or Fixed Rate Loans.
(b) In order to request Competitive Bids, the Company shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive Bid
Request, to be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:30 A.M., New York City time,
four Business Days before a proposed Competitive Borrowing and (ii) in the case
of a Fixed Rate Borrowing, not later than 10:30 A.M., New York City time, one
Business Day before a proposed Competitive Borrowing. Such Competitive Bid
Request shall be accompanied by a fee of $2,500 payable to the Administrative
Agent for its account. A Competitive Bid Request that does not conform
substantially to the format of Exhibit I may be rejected in the Administrative
Agent's discretion (exercised in good faith), and the Administrative Agent shall
promptly notify the Company of such rejection by telecopier. Each Competitive
Bid Request shall refer to this Agreement and specify (x) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing,
(y) the date of such Borrowing (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$1,000,000 or an integral multiple thereof and (z) the Interest Period with
respect thereto. After its receipt of a Competitive Bid Request that is not
rejected as aforesaid and receipt of payment of the $2,500 fee referred to
above, the Administrative Agent shall promptly (and in any event by 5:00 P.M.,
New York City time, on the date of such receipt if such receipt occurs by the
time specified in the first sentence of this paragraph), by sending a Notice of
Competitive Bid Request by telecopier, invite the Lenders to bid, on the terms
and subject to the conditions of this Agreement, to make Competitive Loans
pursuant to the Competitive Bid Request.
(c) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Company responsive to a Competitive Bid Request. Each
Competitive Bid must be in the form of Exhibit K hereto and be received by the
Administrative Agent via telecopier (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 A.M., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 A.M., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be acceptable. Competitive
Bids that do not conform substantially to the format of Exhibit K may be
rejected by the Administrative Agent after conferring with, and upon the
instruction of, the Borrower, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the principal
amount of the Competitive Loan or Loans that the Lender is willing to make to
the Company (which amount may exceed such Lender's Revolving Credit Commitment,
shall be in a minimum principal amount of $1,000,000 or an integral multiple
thereof and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower), (y) the Competitive Bid Rate or Rates at
which the Lender is prepared to make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. A Competitive Bid submitted pursuant
to this paragraph (c) shall be irrevocable (subject to the satisfaction of the
conditions to borrowing set forth in Article III).
(d) The Administrative Agent shall promptly (and in any event by
10:30 A.M., New York City time, on the date on which such Competitive Bids shall
have been made) notify the Company by telecopier of all the Competitive Bids
made, the Competitive Bid Rate and the principal amount of each Competitive Loan
in respect of which a Competitive Bid was made and the identity of the Lender
that made each bid. The Administrative Agent shall send a copy of all
Competitive Bids to the Company for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.20.
(e) The Company may in its sole and absolute discretion, subject only
to the provisions of this paragraph (e), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Company shall notify the Administrative
Agent by telephone, confirmed by telecopier in the form of a Competitive Bid
Accept/Reject Letter, whether and to what extent it has decided to accept or
reject any of or all the bids referred to in paragraph (c) above, (x) in the
case of a Eurodollar Competitive Borrowing, not later than 11:00 A.M., New York
City time, four Business Days before a proposed Competitive Borrowing, and (y)
in the case of a Fixed Rate Borrowing, not later than 11:00 A.M., New York City
time, one Business Day before a proposed Competitive Borrowing; provided,
however, that (i) the failure by the Company to give such notice shall be deemed
to be a rejection of all the bids referred to in paragraph (c) above, (ii) the
Company shall not accept a bid made at a particular Competitive Bid Rate if it
has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Company shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Company shall accept a bid or bids made at a particular Competitive Bid Rate
but the amount of such bid or bids shall cause the total amount of bids to be
accepted by it to exceed the amount specified in the Competitive Bid Request,
then the Company shall accept a portion of such bid or bids in an amount equal
to the amount specified in the Competitive Bid Request less the amount of all
other Competitive Bids accepted with respect to such Competitive Bid Request,
which acceptance, in the case of multiple bids at such Competitive Bid Rate,
shall be made pro rata in accordance with the amount of each such bid at such
Competitive Bid Rate, and (v) except pursuant to clause (iv) above, no bid shall
be accepted for a Competitive Loan unless such Competitive Loan is in a minimum
principal amount of $1,000,000. A notice given by the Company pursuant to this
paragraph (e) shall be irrevocable.
(f) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Loan in respect of
which its bid has been accepted; provided, however, that at no time may the
aggregate outstanding principal amount of such Competitive Loans exceed the
Available Credit. The Available Credit shall be reduced by the amount of any
Competitive Loan made and each Lender's Ratable Portion of the Available Credit
shall be reduced by its Ratable Portion of such reduction. Conversely, the
Available Credit shall be increased by the amount of any repayment of any
Competitive Loan and each Lender's Ratable Portion of the Available Credit shall
be increased by its Ratable Portion of such repayment.
(g) A Competitive Bid request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless the Company
and the Administrative Agent shall mutually agree otherwise.
(h) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such bid directly to the
Company at least fifteen minutes earlier than the latest time at which the other
Lenders are required to submit their bids to the Administrative Agent pursuant
to paragraph (c) above.
(i) All notices required by this Section 2.20 shall be given in
accordance with Section 11.2.
2.21. The Multicurrency Loans. (a) Each Multicurrency Lender, in
its sole discretion and on the terms and subject to the conditions set forth in
this Agreement, may make available to each Borrower one or more Multicurrency
Loans during the period from the date hereof until the Termination Date in an
aggregate amount for all such Multicurrency Loans at any time outstanding not to
exceed the lesser of (i) the difference between $250,000,000 and the Dollar
Equivalent of the sum of the aggregate outstanding principal amount of all
Multicurrency Loans previously made and (ii) the Available Credit; provided,
however, that at no time may the Dollar Equivalent of the aggregate outstanding
balance of Multicurrency Loans exceed $250,000,000; and provided, further, that
each Multicurrency Loan shall mature no later than the Termination Date. All
Multicurrency Loans shall be in an Alternative Currency or Dollars, but
otherwise will contain such terms and conditions as may be agreed between the
Company (on behalf of the relevant Borrower) and the Multicurrency Lender. The
Available Credit shall be reduced by the Dollar Equivalent of any Multicurrency
Loan made and each Lender's Ratable Portion of the Available Credit shall be
reduced by its Ratable Portion of such reduction. Conversely, the Available
Credit shall be increased by the amount of any repayment of any Multicurrency
Loan and each Lender's Ratable Portion of the Available Credit shall be
increased by its Ratable Portion of such repayment. The aggregate amount of the
sum of a Multicurrency Lender's Multicurrency Loans, its Revolving Credit Loans
and its participation in Letter of Credit Undrawn Amounts, Reimbursement
Obligations and Swing Loans may exceed such Multicurrency Lender's Revolving
Credit Commitment.
(b) Multicurrency Loans shall be made on such notice as the relevant
Borrower and the Multicurrency Lender may agree. The Company shall, within 5
Business Days of the end of each calendar month (or more frequently as the
Company may desire), notify the Administrative Agent with details of outstanding
Multicurrency Loans as required by Section 2.7(c).
(c) Each Multicurrency Lender shall notify the Administrative Agent
in writing (i) by no later than 10:30 a.m. New York City time on the first
Business Day of each week, of the aggregate principal amount of Multicurrency
Loans made by it then outstanding, and (ii) by no later than 10:30 a.m. New York
City time on each day on which a Multicurrency Loan is made or to be made by
such Multicurrency Lender or any such Multicurrency Loan is repaid, the amount,
the Borrower and the currency of such Multicurrency Loan or repayment, as the
case may be.
(d) All notices required by this Section 2.21 shall be given in
accordance with Section 11.2.
2.22. Currency Equivalents. (i) The Dollar Equivalent (the "Dollar
Equivalent") of any Alternative Currency shall be determined by using the quoted
spot rate from Bloomberg Financial Markets at close of business (New York time)
one Business Day prior to the date on which such equivalent is to be determined
or, if such rate is not available, the quoted spot rate at which the
Administrative Agent's principal office in London offers to exchange Dollars for
such Alternative Currency in London at 11:00 A.M. (London time) one Business Day
prior to the date on which such equivalent is to be determined. The Dollar
Equivalent of each Multicurrency Loan shall be recalculated hereunder on each
date that it shall be necessary to determine the unused portion of each Lender's
Commitment, or any or all Loans outstanding on such date, it being understood
that all payments of principal or interest on Loans shall be made in the
currency in which such Loans were made.
ARTICLE III
CONDITIONS
3.1. Conditions Precedent to Effectiveness. This Agreement shall
become effective on the date (the "Effective Date") on which the Administrative
Agent shall have received the following, each dated the Effective Date unless
otherwise indicated, in form and substance satisfactory to the Administrative
Agent and in sufficient copies for each Lender and, unless waived by the
Administrative Agent, in the case of each below-referenced document submitted in
a language other than English, together with a certified English translation
thereof:
(a) Certified copies of (i) the resolutions of the Board of Directors
of each Loan Party approving each Loan Document to which it is a party, and
(ii) all documents evidencing other necessary corporate action and required
governmental and third party approvals, licenses and consents required to be
obtained by any Loan Party with respect to each Loan Document and the
transactions contemplated thereby.
(b) A copy of the articles or certificate of incorporation or other
organizational documents of each Loan Party, certified (except in the case of a
Foreign Loan Party) as of a recent date by the Secretary of State of the state
of incorporation of such Loan Party, together with, except in the case of any
Foreign Loan Party, certificates of such official attesting to the good standing
of each such Loan Party, and a copy of the certificate of incorporation,
By-Laws, memorandum and articles of association or other equivalent
organizational documents, if any, of each Loan Party, certified as of the
Effective Date by the Secretary or an Assistant Secretary of each such Loan
Party (or, in the case of any Foreign Loan Party, any other Responsible Officer
thereof).
(c) A certificate of the Secretary or an Assistant Secretary of each
Loan Party or, in the case of any Foreign Loan Party, any other Responsible
Officer thereof, certifying the names and true signatures of each officer of
such Loan Party who has been authorized to execute and deliver any Loan Document
or other document required hereunder to be executed and delivered by or on
behalf of such Loan Party.
(d) Amendment No. 3 to the Pledge Agreement, duly executed by the
Company and the Administrative Agent.
(e) A favorable opinion of (i) Simpson Thacher & Bartlett, special
counsel to the Loan Parties, substantially in the form of Exhibit G-1,
(ii) Joel K. Bedol, Esq., general counsel to the Loan Parties, substantially in
the form of Exhibit G-2, (iii) Herbert Smith, English counsel to the Loan
Parties, substantially in the form of Exhibit G-3, (iv) Appleby, Spurling &
Kempe, Bermuda counsel to the Loan Parties, substantially in the form of Exhibit
G-4, (v) Fasken Campbell Godfrey, Canadian counsel to the Loan Parties,
substantially in the form of Exhibit G-5, and (vi) Mallesons Stephen Jaques,
Australian counsel to the Loan Parties, substantially in the form of Exhibit
G-6, and as to such other matters as any Lender through the Administrative Agent
may reasonably request.
(f) A certificate, signed by a Responsible Officer of each Loan
Party, stating that each of the conditions specified in Subsections 3.2(a) and
(c), and 3.3(a) and (b) has been satisfied or will be satisfied on the Effective
Date.
(g) Letter of Credit Reimbursement Agreements executed by each
Borrower for whose account a Letter of Credit may be issued.
(h) Such additional documents, information and materials as the
Administrative Agent may reasonably request.
3.2. Additional Conditions Precedent to Effectiveness. The
effectiveness of this Agreement is subject to the further conditions precedent
that:
(a) All costs and accrued and invoiced unpaid fees and expenses
(including, without limitation, legal fees and expenses of the Administrative
Agent) required to be paid to the Lenders and the Administrative Agent and its
Affiliates in connection with the financing contemplated hereby on or before the
Effective Date, including, without limitation, those referred to in Sections
2.4, 2.17 and 11.4, to the extent then due and payable, shall have been paid.
(b) The NationsBank Loan shall be repaid in full on the Closing Date
with the proceeds of the initial Loans.
(c) Nothing shall have occurred since February 1, 1997 which any
Lender, in its reasonable judgment, shall have determined has had or can
reasonably be expected to have a material adverse effect on the rights and
remedies of the Lenders taken as a whole or on the ability of the Borrowers and
the Guarantors to perform their obligations under the Loan Documents.
(d) No Lender, in its reasonable judgment, shall have determined that
there is any claim, action, suit, investigation, litigation or proceeding
(including, without limitation, shareholder or derivative litigation) pending or
threatened in any court or before any arbitrator or Governmental Authority which
would have a material adverse effect on (i) the condition (financial or
otherwise), operations, business, properties or prospects of the Company and its
Subsidiaries taken as a whole, or (ii) the transactions contemplated by the Loan
Documents.
(e) No Lender, in its reasonable judgment, shall have determined that
there exists any judgment, order, injunction or other restraint prohibiting or
imposing materially adverse conditions upon or the transactions contemplated by
the Loan Documents.
(f) Each Lender shall be satisfied, in its reasonable judgment, that
there has been since the date hereof, no material adverse change in respect of
(i) the corporate, capital, legal and management structure of the Company and
its Subsidiaries, and (ii) the nature and status of all Contractual Obligations,
and all securities, labor, tax, ERISA, employee benefit, environmental, health
and safety matters, in each case, involving or affecting the Company or any of
its Subsidiaries.
(g) The conditions precedent in Section 3.3 shall have been
satisfied.
3.3. Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan and of each Issuer to issue any
Letter of Credit shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the Effective Date and
on the date of such Loan or issuance, before and after giving effect thereto and
to the application of the proceeds therefrom and to such issuance (and the
acceptance by the relevant Borrower of the proceeds of such Loan or such Letter
of Credit shall constitute a representation and warranty by the Company that on
the date of such Loan or issuance such statements are true):
(i) The representations and warranties of each Loan Party
contained in Article IV and in the other Loan Documents are correct on and
as of such date as though made on and as of such date, except to the extent
such representations and warranties relate solely to an earlier date, in
which case such representations and warranties were correct on and as of
such earlier date; and
(ii) No Default or Event of Default will result from any Loan
being made or Letter of Credit being issued on such date.
(b) The making of such Loan or the issuance of such Letter of Credit
on such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
(c) The Administrative Agent shall have received such additional
documents, information and materials as any Lender or any Issuer, through the
Administrative Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, each Loan Party represents and warrants that:
4.1. Corporate Existence; Compliance with Law. Each Loan Party and
each of its Subsidiaries (a) is a corporation or other type of Person duly
incorporated or otherwise duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (b) is
duly qualified as a foreign corporation or other Person and in good standing
under the laws of each jurisdiction where such qualification is necessary,
except for failures that in the aggregate have no Material Adverse Effect,
(c) has, in the case of each Loan Party, all requisite corporate or other
comparable power and authority and the legal right to own, pledge, mortgage and
operate its properties, to lease the property it operates under lease and to
conduct its business as now or currently proposed to be conducted, (d) is in
compliance with its certificate of incorporation and by-laws or other comparable
governing documents, (e) is in compliance with all other applicable Requirements
of Law except for such non-compliances that in the aggregate have no Material
Adverse Effect, and (f) has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for licenses,
permits, consents, approvals or filings which can be obtained or made by the
taking of ministerial action to secure the grant or transfer thereof and such
failures that, in the aggregate, have no Material Adverse Effect.
4.2. Corporate Power; Authorization; Enforceable Obligations.
(a) The execution, delivery and performance by each Loan Party of the Loan
Documents to which it is a party and the consummation of the transactions
related to the financing contemplated hereby:
(i) are within such Loan Party's corporate or other comparable
powers;
(ii) have been duly authorized by all necessary corporate or
other comparable action, including, without limitation, the consent of
stockholders where required;
(iii) do not and will not (A) contravene any Loan Party's
certificate of incorporation or by-laws or other comparable governing
documents, (B) violate any other applicable Requirement of Law applicable
to any Loan Party (including, without limitation, Regulations G, T, U and X
of the Board of Governors of the Federal Reserve System), or any order or
decree of any Governmental Authority or arbitrator applicable to any Loan
Party, (C) conflict with or result in the breach of, or constitute a
default under, or result in or permit the termination or acceleration of,
any Contractual Obligation of any Loan Party, other than (x) any provision
in any of the Collateral purporting to prohibit the assignment thereof or
the grant of a security interest therein and (y) the Subordination
Agreement, dated as of January 24, 1997, between Nine West Boot Corporation
and Texas Boot, Inc., but none of which provisions give rise to any
liability of any Secured Party and all of which provisions, in the
aggregate, have no Material Adverse Effect to the extent effective, or
(D) result in the creation or imposition of any Lien upon any of the
property of any Loan Party, other than those in favor of the Secured
Parties pursuant to the Collateral Documents and other Liens permitted
hereby; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those which have been obtained or made and
copies of which have been or will be delivered to the Administrative Agent
pursuant to Section 3.1, and each of which on the Effective Date will be in
full force and effect.
(b) Each Loan Document has been duly executed and delivered by each
Loan Party party thereto. Each Loan Document is the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against it in
accordance with its terms, except as such enforceability 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).
4.3. Taxes. (a) All federal, state, local and foreign tax returns,
reports and statements (collectively, the "Tax Returns") required to be filed by
any Loan Party or any of its Tax Affiliates have been filed with the appropriate
governmental agencies in all jurisdictions in which such Tax Returns are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all taxes, charges and other impositions reflected therein or
otherwise due and payable have been paid, except (i) where contested in good
faith and by appropriate proceedings (unless the failure to contest has no
Material Adverse Effect), (ii) if adequate reserves therefor have been
established on the books of such Loan Party or Subsidiary in conformity with
GAAP, and (iii) where all such non-payments and non-filings in the aggregate
have no Material Adverse Effect.
(b) Proper and accurate amounts have been withheld by each Loan Party
and each of its Tax Affiliates from their respective employees for all periods
in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities, except where the failures to so withhold or pay in the aggregate
have no Material Adverse Effect.
(c) Set forth on Schedule 4.3(c) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and each of
its Tax Affiliates for which federal income Tax Returns have been filed and for
which the expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an "Open
Year").
(d) The aggregate unpaid amount, as of the date hereof, of
adjustments to the federal income tax liability of any Loan Party and each of
its Tax Affiliates proposed to such Loan Party or its Tax Affiliates by the IRS
with respect to Open Years does not exceed $500,000. No issues have been raised
by the Internal Revenue Service in respect of Open Years that, in the aggregate,
have a Material Adverse Effect.
(e) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of any Loan Party and
its Tax Affiliates proposed to such Loan Party or its Tax Affiliates by all
state, local and foreign taxing authorities (other than amounts arising from
adjustments to federal income Tax Returns) does not exceed $500,000. No issues
have been raised by such taxing authorities that, in the aggregate, have a
Material Adverse Effect.
4.4. Full Disclosure. (a) The written statements prepared or
furnished by or on behalf of any Loan Party or any of its Affiliates in
connection with any of the Loan Documents in respect of such Loan Party or any
of its Subsidiaries do not, taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not misleading as of the respective dates when furnished and
in light of the circumstances existing when made.
(b) The consolidated statements of financial condition and
consolidated statements of operations of the Company and its Subsidiaries
previously delivered to each of the Lenders are the audited (as to those
delivered pursuant to Section 6.10(b)) or unaudited (as to all others)
consolidated financial statements of the Company and its Subsidiaries, as of the
dates and for the periods specified therein.
(c) As of the date hereof, all facts known to the Company which are
material to an understanding of the financial condition, business, properties
and prospects of the Company and its Subsidiaries taken as one enterprise, have
been disclosed to the Lenders.
4.5. Financial Matters. (a) The consolidated balance sheet of the
Company and its Subsidiaries as at February 1, 1997, and the related
consolidated statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, certified by
Deloitte & Touche LLP, copies of which have been furnished to each Lender,
fairly present the consolidated financial condition of the Company and its
Subsidiaries as at such date and the consolidated results of the operations of
the Company and its Subsidiaries for the period ended on such date, all in
conformity with GAAP.
(b) Since February 1, 1997, there has been no Material Adverse Change
and there have been no events or developments that, in the aggregate, have had a
Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries had at
February 1, 1997 any material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.
(d) The Company is, and on a consolidated basis the Company and its
Subsidiaries are, Solvent.
4.6. Litigation. There are no pending or, to the knowledge of any
Loan Party, threatened actions, investigations or proceedings affecting any Loan
Party or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, other than those that in the aggregate, if adversely determined,
have no Material Adverse Effect. The performance of any action by any Loan
Party required or contemplated by any of the Loan Documents is not restrained or
enjoined (either temporarily, preliminarily or permanently), and no material
adverse condition has been imposed by any Governmental Authority or arbitrator
upon either of the foregoing transactions.
4.7. Margin Regulations. No Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Borrowing 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.
4.8. Subsidiaries. (a) Set forth on Schedule 4.8 hereto is a
complete and accurate list showing all Subsidiaries of the Company as of the
date hereof and, as to each such Subsidiary, the jurisdiction of its
incorporation, the number of shares of each class of Stock authorized, the
number outstanding on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by the Company. Except
as set forth on Schedule 4.8 hereto, as of the Effective Date, no Stock of any
Subsidiary of the Company is subject to any outstanding option, warrant, right
of conversion or purchase or any similar right in favor of a Person other than
the Company or any of its Subsidiaries. All of the outstanding capital Stock of
each Subsidiary of the Company has been validly issued, is fully paid and
non-assessable and, except as set forth on Schedule 4.8 hereto, is owned as of
the
Effective Date by the Company or a Subsidiary of the Company, free and clear of
all Liens (other than the Liens in favor of the Secured Parties created pursuant
to the Collateral Documents and other Liens permitted by Section 7.1).
(b) Pappagallo is not engaged in any business other than the direct
ownership of, and all or substantially all of its assets consist of, 100% of the
issued and outstanding Stock of Compania de Calzados de Exportacion, S.L., a
Spain corporation.
4.9. ERISA. (a) Each Qualified Plan is qualified under Section 401
of the Code, and the trusts created thereunder are exempt from tax under the
provisions of Section 501 of the Code, except where all such failures to be
qualified or exempt, as the case may be, in the aggregate, have no Material
Adverse Effect.
(b) None of the Company, any of its Subsidiaries or any ERISA
Affiliate, with respect to any Qualified Plan, has failed to make any
contribution or pay any amount due as required by Section 412 of the Code or
Section 302 of ERISA.
(c) There has been no, nor is there reasonably expected to occur any,
ERISA Event or event described in Section 4068 of ERISA with respect to any
Title IV Plan, which in either event has had or will have a Material Adverse
Effect.
(d) There are no pending or, to the knowledge of the Company,
threatened claims, actions or lawsuits (other than claims for benefits in the
normal course), asserted or instituted against (i) any Qualified Plan or
Multiemployer Plan, or its assets, (ii) any fiduciary with respect to any
Qualified Plan or Multiemployer Plan, or (iii) the Company, any of its
Subsidiaries or any ERISA Affiliate with respect to any Qualified Plan or
Multiemployer Plan, other than those that in the aggregate, if adversely
determined, have no Material Adverse Effect.
(e) None of the Company, any of its Subsidiaries or any ERISA
Affiliate has incurred or has any reasonable likelihood of incurring any
Withdrawal Liability under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in any such
liability) in excess of $5,000,000 or that have a Material Adverse Effect.
(f) Neither the Company nor any of its Subsidiaries has engaged in a
prohibited transaction, as defined in Section 4975 of the Code or Section 406 of
ERISA, in connection with any Qualified Plan or Multiemployer Plan, which would
subject or has any reasonable likelihood of subjecting the Company or any of its
Subsidiaries (after giving effect to any exemption) to a tax on prohibited
transactions imposed by Section 4975 of the Code or any other liability, in
either case, in excess of $5,000,000 or which in the aggregate have a Material
Adverse Effect.
4.10. Liens. There are no Liens of any nature whatsoever on any
properties of the Company or any of its Subsidiaries other than those permitted
by Section 7.1. The Liens granted by the Loan Parties to the Administrative
Agent pursuant to the Collateral Documents are fully perfected first priority
Liens in and to the Collateral, other than (a) any Collateral covered by any
Collateral Document (other than the Mortgages) that is not subject to Article 8
or 9 of the Uniform Commercial Code as in effect in any applicable jurisdiction,
and (b) any items of Collateral, if any, not required to be delivered to the
Administrative Agent on or prior to the Effective Date pursuant to the
Collateral Documents to the extent the possession thereof by a secured party is
required under the Uniform Commercial Code of any applicable jurisdiction in
order to perfect a Lien thereon.
4.11. No Burdensome Restrictions; No Defaults. (a) None of the Loan
Parties or any of their respective Subsidiaries is a party to any Contractual
Obligation the compliance with which has a Material Adverse Effect or the
performance of which by any thereof, either unconditionally or upon the
happening of an event, will result in the creation of a Lien (other than a Lien
granted pursuant to a Loan Document or otherwise permitted hereby) on the
property or assets of any thereof.
(b) None of the Loan Parties nor any of their respective Subsidiaries
is in default under or with respect to any Contractual Obligation owed by it
and, to the knowledge of any Loan Party, no other party is in default under or
with respect to any Contractual Obligation owed to any Loan Party or any of its
Subsidiaries, other than, in either such case, those defaults which in the
aggregate have no Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) There is no Requirement of Law applicable to the Company or any
of its Subsidiaries, the compliance with which by the Company or any of its
Subsidiaries has a Material Adverse Effect.
(e) No Loan Party is subject to any Contractual Obligation
restricting or limiting its ability to declare or make any dividend payment or
other distribution on account of any shares of any class of its Stock or its
ability to purchase, redeem, or otherwise acquire for value or make any payment
in respect of any such shares or any shareholder rights.
(f) No Loan Party has entered into or become subject to, directly or
indirectly, including, without limitation, as a non-party Subsidiary of a party
to any agreement, any agreement (other than a Loan Document or the indentures
relating to the Convertible Subordinated Notes, the Senior Notes and the Senior
Subordinated Notes) prohibiting or restricting in any manner (including, without
limitation, by way of covenant, representation or event of default) (i) the
incurrence, creation or assumption of any Indebtedness or of any Lien upon any
of its property or the property of any Loan Party which Indebtedness or Liens
are permitted by or arise pursuant to or in connection with any Loan Document,
except customary restrictions in a Capitalized Lease or other purchase money
financing agreement permitted hereunder and relating solely to the asset
financed thereunder and customary restrictions contained in any partnership or
shareholder agreement or similar agreement or instrument in respect of any Stock
or Stock Equivalents of any Foreign Venture or North American Venture owned by
any Loan Party, (ii) the sale, disposition or pledge of any of its property or
the property of any Loan Party, except customary restrictions in a Capitalized
Lease or other purchase money financing agreement permitted hereunder and
relating solely to the asset financed thereunder and customary restrictions
contained in any partnership or shareholder agreement or similar agreement or
instrument in respect of any Stock or Stock Equivalents of any Foreign Venture
or North American Venture owned by any Loan Party, (iii) the making of any
Capital Expenditure by any Loan Party permitted hereby, or (iv) any amendment,
supplement or modification to, or waiver under, this Agreement or any other Loan
Document.
4.12. No Other Ventures. No Loan Party or any Subsidiary thereof is
engaged in any partnership or other joint venture with any other Person other
than those permitted by Section 7.6.
4.13. Investment Company Act; Public Utility Holding Company Act.
(a) No Loan Party or any Subsidiary thereof is an "investment company," or
"promoter" or "principal underwriter" for an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended. The making of
the Loans by the Lenders, the application of the proceeds and repayment thereof
by the respective Borrowers and the consummation of the transactions
contemplated by the Loan Documents will not result in a violation by any Loan
Party or any of its Subsidiaries of any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
(b) No Loan Party or any Subsidiary thereof is a "holding company" or
an "affiliate" of a "holding company" or a "subsidiary company," of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.14. Insurance. All policies of insurance of any kind or nature
owned by or issued to any Loan Party or any of its Subsidiaries, including,
without limitation, policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient in the
reasonable judgment of such Loan Party and as is customarily carried by
companies of the size and character of such Person.
4.15. Labor Matters. (a) There are no strikes, work stoppages,
slowdowns or lockouts pending or threatened against or involving any Loan Party
or any of its Subsidiaries, other than those which in the aggregate have no
Material Adverse Effect.
(b) There are no arbitrations or grievances pending against or
involving any Loan Party or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving any Loan Party or any of its
Subsidiaries, other than those which in the aggregate, if resolved adversely to
such Loan Party or such Subsidiary, have no Material Adverse Effect.
4.16. Force Majeure. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are currently suffering from the effects
of any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance), other than those which in
the aggregate have no Material Adverse Effect.
4.17. Use of Proceeds. This Agreement amends and restates the terms
of indebtedness outstanding under the Existing Credit Agreement and the proceeds
of the Loans and the Letters of Credit are being used by the Borrowers solely as
follows: (i) to refinance such existing Indebtedness, (ii) for the payment of
related transaction costs, fees and expenses, and (iii) for general working
capital and general corporate purposes.
4.18. Environmental Protection. (a) The operations of any Loan
Party and each of its Subsidiaries or tenants comply with all Environmental Laws
other than such non-compliances as, in the aggregate, have no Material Adverse
Effect.
(b) Each Loan Party and each of its Subsidiaries has obtained all
environmental, health and safety Permits necessary for its operations, and all
such Permits are in good standing, and each Loan Party and each of its
Subsidiaries is in compliance with the terms and conditions of such Permits
other than such failures and non-compliances as, in the aggregate, have no
Material Adverse Effect.
(c) No Loan Party or any Subsidiary thereof or any of their
respective currently or previously owned or leased property or operations is
subject to any threatened or outstanding order from or agreement with any
Governmental Authority or other Person or is subject to any judicial or docketed
administrative proceeding respecting (i) Environmental Laws, (ii) Remedial
Action or (iii) any Environmental Liabilities and Costs arising from a Release
or threatened Release, other than, in any such case, those which in the
aggregate have no Material Adverse Effect.
(d) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of any Loan
Party or any of its Subsidiaries which may give rise to any Environmental
Liabilities and Costs other than those which in the aggregate have no Material
Adverse Effect.
(e) No Loan Party or any Subsidiary thereof is a treatment, storage
or disposal facility requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the regulations thereunder or any
state analog. Each Loan Party and each of its Subsidiaries is in compliance
with all applicable material financial responsibility requirements of all
Environmental Laws, including, without limitation, those contained in 40 C.F.R.,
parts 264 and 265, subpart H, and any state equivalents.
(f) Except as specifically disclosed in the Environmental Reports or
disclosed to the Administrative Agent prior to the date hereof, there is not on
or in the property owned, leased or operated by any Loan Party or any of its
Subsidiaries (i) any underground storage tanks or surface impoundments, (ii) any
exposed friable asbestos-containing materials or (iii) any polychlorinated
biphenyls ("PCBs") used in electrical or other equipment, other than, in any
such case, those which in the aggregate have no Material Adverse Effect.
(g) No Loan Party or any Subsidiary thereof has filed or failed to
file any material notice required under any applicable Environmental Law
reporting a Release (other than notices of Releases occurring in compliance with
a Permit issued pursuant to any Environmental Law).
4.19. Intellectual Property. Each Loan Party is the legal and
beneficial owner of all of the "Intellectual Property" and "Licenses" (as such
terms are defined in the Security Agreement and the Subsidiary Security
Agreement executed by Nine West Development Corporation) in which it purports to
grant collateral assignments and security interests, having good title thereto,
except where the failure of any of the foregoing to be true does not have in the
aggregate a Material Adverse Effect. All such Intellectual Property and
Licenses owned by such Loan Party are free and clear of any and all Liens,
except (a) Liens granted pursuant to the Collateral Documents and (b) Liens
permitted by Section 7.1. The Intellectual Property is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part, except for such
invalidities and unenforceabilities which in the aggregate have no Material
Adverse Effect. To the best of such Loan Party's knowledge, there is no
infringement by any third party of the Intellectual Property or the rights
arising thereunder except for such infringements and claims which in the
aggregate have no Material Adverse Effect. No claim has been made that the use
of any of the Intellectual Property infringes the rights of any third party and,
to the best of such Loan Party's knowledge, neither the operation of such Loan
Party's business and the businesses of its Subsidiaries nor the use of any of
the Intellectual Property infringes any intellectual property rights owned or
possessed by any third party except, in any such case, for such infringements
which in the aggregate have no Material Adverse Effect. No Loan Party has
assigned, transferred, conveyed or otherwise encumbered its right, title or
interest in the Intellectual Property, other than pursuant to the Licenses, the
Collateral Documents or as otherwise permitted hereby.
4.20. Title. (a) Each Loan Party and its Subsidiaries own good and
indefeasible title to, or valid leasehold interests in, all real and personal
properties and assets purported to be owned by such Loan Party or any of its
Subsidiaries including, without limitation, those reflected on the Company's
most recent consolidated financial statements delivered pursuant to this
Agreement and not disposed of as permitted hereunder, except for failures which
in the aggregate have no Material Adverse Effect, and none of such properties
and assets, is subject to any Lien, except Liens granted to the Secured Parties
pursuant to the Loan Documents or otherwise permitted hereunder. Each Loan
Party and its Subsidiaries have received all deeds, assignments, waivers,
consents, non-disturbance and recognition or similar agreements, bills of sale
and other documents, and have duly effected all recordings, filings and other
actions necessary to establish, protect and perfect such Loan Party's and its
Subsidiaries' right, title and interest in and to all such property, except for
failures which in the aggregate have no Material Adverse Effect.
(b) All Permits required to have been issued or appropriate to enable
all real property owned or leased by each Loan Party or any of its Subsidiaries
to be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, except as in the aggregate, have no Material Adverse Effect.
4.21. Certain Indebtedness. Schedule 4.21 separately identifies all
Indebtedness (other than trade payables and the Obligations) of each Loan Party
which is outstanding on the date hereof and is to remain outstanding after the
Effective Date, and (a) is for borrowed money, (b) was incurred outside of the
ordinary course of the business or not in a manner and extent consistent with
past practice, or (c) is material to the financial condition, business,
operations or prospects of such Loan Party (or will be so material to the
financial condition, business, operations or prospects of such Loan Party),
$2,000,000 being hereby deemed material for purposes of this Section 4.21.
4.22. Restricted Payments. Since February 1, 1997 (with respect to
the Company) or the date hereof (with respect to any other Loan Party), except
as permitted by Section 7.4 or 7.5, no Loan Party has (a) declared or made any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its Stock, or
(b) purchased, redeemed, or otherwise acquired for value or made any payment in
respect of any of its Stock or Stock Equivalents.
ARTICLE V
FINANCIAL COVENANTS
The Company agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing, or (b) (i) the
Commitments have been terminated, (ii) all Loans, accrued or matured interest
and fees, and other then accrued and payable monetary Obligations have been paid
in full, and (iii) all then outstanding Letters of Credit have been terminated,
paid in full or fully cash collateralized to the reasonable satisfaction of the
Administrative Agent:
5.1. Maximum Leverage Ratio. The Company shall maintain at the end
of each Fiscal Quarter a ratio of (a) Indebtedness for Borrowed Money
(determined on a consolidated basis for the Company and its Subsidiaries as of
the date of determination) to (b) EBITDA for the four Fiscal Quarters ending on
the date of determination, not in excess of 4.00:1.00.
5.2. Fixed Charge Coverage Ratio. The Company shall maintain at the
end of each Fiscal Quarter a ratio of (a) the sum of (i) EBITDA plus (ii) cash
rentals payable by the Company and its Subsidiaries for the applicable period
under leases of real, personal or mixed property to (b) Fixed Charges, in each
case determined on the basis of the four Fiscal Quarters ending on the date of
determination, not less than 1.00:1.00.
5.3. Maintenance of Net Worth. The Company shall at all times
maintain a Net Worth of not less than $260,000,000 plus 50% of the Net Income
for each Fiscal Quarter commencing after February 1, 1997 without deduction for
any Net Loss from any such Fiscal Quarter.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each Loan Party, on its behalf and on behalf of its Subsidiaries,
agrees with the Lenders and the Administrative Agent that unless (a) the
Majority Lenders otherwise consent in writing or (b) (i) the Commitments have
been terminated, (ii) all Loans, accrued or matured interest and fees, and other
then accrued and payable monetary Obligations have been paid in full, and (iii)
all then outstanding Letters of Credit have been terminated, paid in full or
fully cash collateralized to the reasonable satisfaction of the Administrative
Agent:
6.1. Compliance with Laws, Etc. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply in all material respects with all
applicable Requirements of Law and Permits; provided, however, that no Loan
Party shall be deemed in default of this Section 6.1 if all such non-compliances
in the aggregate have no Material Adverse Effect.
6.2. Payment of Taxes, Etc. Each Loan Party shall pay and discharge,
and shall cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, all lawful governmental claims, taxes, assessments,
charges and levies, except (a) where contested in good faith, by proper
proceedings (unless the failure to contest has no Material Adverse Effect), (b)
if adequate reserves therefor have been established on the books of such Loan
Party or the appropriate Subsidiary in conformity with GAAP, and (c) if all such
non-payments in the aggregate have no Material Adverse Effect.
6.3. Maintenance of Insurance. Each Loan Party shall maintain, and
shall cause to be maintained for each of its Subsidiaries, 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 such
Loan Party or such Subsidiary operates and such other insurance as may be
reasonably requested by the Majority Lenders, and, in any event, all insurance
required by any Collateral Document. All such general liability insurance shall
name the Secured Parties as additional insureds and all such property insurance
shall name the Administrative Agent as loss payee in respect of any incurrence
involving the payment of insurance proceeds equal to or greater than $2,000,000
in respect of the Collateral. Notwithstanding anything to the contrary
contained in any Collateral Document, as long as an Event of Default is not
continuing, the Administrative Agent shall promptly after its receipt thereof
turn over to the Company or the applicable Loan Party any proceeds of any such
property insurance paid to the Administrative Agent. The Company will furnish
to the Administrative Agent from time to time such information as may be
reasonably requested by any Lender through the Administrative Agent as to such
insurance.
6.4. Preservation of Corporate Existence, Etc. Each Loan Party shall
preserve and maintain, and shall cause each of its Subsidiaries to preserve and
maintain, its corporate (or other comparable) existence, rights (charter and
statutory) and franchises, except (a) with respect to any Guarantor, as
permitted by Section 7.5, and (b) to the extent such Loan Party or any such
Subsidiary determines in its reasonable judgment that it is not necessary or
desirable to preserve or maintain any such franchise or right (or in the case of
a North American Venture or a Foreign Venture, its existence).
6.5. Access. Each Loan Party shall, from time to time at any
reasonable time during normal business hours, permit the Administrative Agent or
any agents or representatives thereof within five Business Days after a written
request therefor (except that during a continuance of a Default or Event of
Default, no such prior request shall be necessary), to (a) examine and make
copies of and abstracts from the records and books of account of such Loan Party
and each of its Subsidiaries, (b) visit the properties of such Loan Party and
each of its Subsidiaries, (c) discuss the affairs, finances and accounts of such
Loan Party and each of its Subsidiaries with any of their respective officers or
directors, and (d) as long as a Responsible Officer of such Loan Party has been
notified at least one Business Day in advance in respect thereof and officers of
such Loan Party are permitted to participate, communicate directly with such
Loan Party's independent certified public accountants, in each of cases (a), (b)
and (c) in a manner that does not interfere in any material respect with the
conduct of such Loan Party or any such Subsidiary's business. Such Loan Party
shall authorize its independent certified public accountants to disclose to the
Administrative Agent or any Lender any and all financial statements and other
information of any kind as the Administrative Agent or any Lender (through the
Administrative Agent) reasonably requests from such Loan Party and which such
accountants have with respect to the business, financial condition, results of
operations or other affairs of such Loan Party or any of its Subsidiaries.
6.6. Keeping of Books. Each Loan Party shall keep, and shall 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 such Loan Party and each such Subsidiary.
6.7. Maintenance of Properties, Etc. Each Loan Party shall maintain
and preserve (a) all of its properties which are necessary in the conduct of its
business in good working order and condition, and (b) all rights, permits,
licenses, approvals and privileges (including, without limitation, all Permits)
which are necessary in the conduct of its business; provided, however, that such
Loan Party shall not be deemed in default of this Section 6.7 if all such
failures in the aggregate have no and would have no Material Adverse Effect.
6.8. Performance and Compliance with Other Covenants. Each Loan
Party shall perform and comply with, and shall cause each of its Subsidiaries to
perform and comply with each Contractual Obligation to which it or any of its
Subsidiaries is a party; provided, however, that such Loan Party shall not be
deemed in default of this Section 6.8 if all such failures in the aggregate have
no Material Adverse Effect.
6.9. Application of Proceeds. The Borrowers shall use the entire
amount of the proceeds of the Loans as provided in Section 4.17.
6.10. Financial Statements. The Company shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) as soon as available and in any event within 50 days after the
end of each Fiscal Quarter of each Fiscal Year, unaudited consolidated balance
sheets and statements of retained earnings and cash flow of the Company and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated and
consolidating (by wholesale and retail segments) statements of income of the
Company and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, all
prepared in conformity with GAAP and certified by the chief financial officer of
the Company as fairly presenting the financial condition and results of
operations of the Company and its Subsidiaries at such date and for such period,
subject to normal year-end adjustments, together with (i) a certificate of said
officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Company proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the Company
in determining compliance with all financial covenants contained herein, (iii) a
written discussion and analysis by the management of the Company of the
unaudited consolidated financial statements furnished in respect of such Fiscal
Quarter and (iv) a certificate of said officer certifying as to the current
Facility Rating and Leverage Ratio;
(b) as soon as available and in any event within 95 days after the
end of each Fiscal Year, consolidated balance sheets and statements of retained
earnings and cash flow of the Company and its Subsidiaries as of the end of such
year and consolidated and consolidating (by wholesale and retail segments)
statements of income of the Company and its Subsidiaries for such Fiscal Year,
all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit or as to the Company being a going concern by Deloitte & Touche LLP, any
other "Big Six" accounting firm or any other independent public accountants
reasonably acceptable to the Majority Lenders, together with (i) a report by
such accounting firm expressing negative assurance, based on its audit of the
consolidated financial statements of the Company, as to compliance with the
financial covenants contained in Article V and other covenants in this Agreement
relating to financial or accounting matters, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations prepared by the
Company and used in determining, as of the end of such Fiscal Year, the
Company's compliance with all financial covenants contained herein, and (iii) a
written discussion and analysis by the management of the Company of the
consolidated financial statements furnished in respect of such Fiscal Year; and
(c) promptly after the same are received by the Company, a copy of
each management letter provided to the Company by its independent certified
public accountants which refers in whole or in part to any material weakness in
the internal control structure of the Company and its Subsidiaries on a
consolidated basis.
6.11. Reporting Requirements. The Company shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) as soon as available and in any event within the first 30 days of
each Fiscal Year, an annual budget, business and financial plan of the Company
and its Subsidiaries for such Fiscal Year, displaying on a quarterly basis
anticipated balance sheets, forecasted revenues, EBITDA, net income, Capital
Expenditures, cash flow, and working capital requirements all on a consolidated
(in the case of anticipated balance sheets, statements of retained earnings and
cash flow) and consolidated and consolidating (by wholesale and retail segments)
basis (in all other cases).
(b) (i) promptly and in any event within 30 days after the Company,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, and (ii) promptly and in any event within 10 days
after the Company, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that a request for a minimum funding waiver under Section 412 of
the Code has been filed with respect to any Qualified Plan, a written statement
of the chief financial officer or other appropriate officer of the Company
describing such ERISA Event or waiver request and the action, if any, which the
Company, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto;
(c) promptly and in any event within 10 days after receipt thereof, a
copy of any correspondence the Company, any of its Subsidiaries or any ERISA
Affiliate receives from the plan sponsor (as defined by Section 4001 (a)(10) of
ERISA) of any Multiemployer Plan concerning potential withdrawal liability of
the Company, its Subsidiaries and ERISA Affiliates in excess of $5,000,000 in
the aggregate, or notice of any reorganization with respect to any Multiemployer
Plan, together with a written statement of the chief financial officer or other
appropriate officer of the Company of the action which the Company, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto;
(d) promptly and in any event within 30 days after the adoption
thereof, notice of (i) any amendment to a Title IV Plan which results in an
increase in benefits in excess of $5,000,000 or the adoption of any new Title IV
Plan that would provide benefits in excess of $5,000,000, and (ii) any amendment
to, or adoption of, a new welfare benefit plan, which results in new or
increased benefits for retirees, their spouses or their beneficiaries in excess
of $5,000,000 in the aggregate;
(e) promptly and in any event within 30 days after notice or
knowledge thereof, notice that the Company or any of its Subsidiaries has become
subject to the tax on prohibited transactions imposed by Section 4975 of the
Code, together with a copy of Form 5330;
(f) promptly and in any event within 10 days after receipt thereof by
the Company, any of its Subsidiaries or any ERISA Affiliate, the Company shall
furnish to the Administrative Agent a copy of each notice from the PBGC,
received by the Company, any of its Subsidiaries or any ERISA Affiliate of the
PBGC's intention to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan;
(g) promptly and in any event within 10 days after the date that the
Company, any of its Subsidiaries or any ERISA Affiliate files a notice of intent
to terminate any Plan under a distress termination within the meaning of Section
4041(c) of ERISA, the Company shall furnish to the Administrative Agent a copy
of each such notice;
(h) promptly and in any event within 10 days after the date that the
Company, any of its Subsidiaries or any ERISA Affiliate files a notice of intent
to terminate any Title IV Plan, if such termination would require additional
contributions in excess of $5,000,000 in order to be considered a standard
termination within the meaning of Section 4041(b) of ERISA, the Company shall
furnish to the Administrative Agent a copy of each notice;
(i) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting any Loan Party or any of its Subsidiaries, except those
which, if adversely determined, would have no Material Adverse Effect;
(j) promptly and in any event within two Business Days after the
Company becomes aware of the existence of (i) any Default or Event of Default,
or (ii) any Material Adverse Change or any event, development or other
circumstance which has a reasonable likelihood of causing or resulting in a
Material Adverse Change, notice (which may be telephonic) in reasonable detail
specifying the nature of the Default, Event of Default, development or
circumstance, including, without limitation, the anticipated effect thereof,
which notice if telephonic shall be promptly confirmed in writing within five
days;
(k) promptly after the sending or filing thereof, copies of all
reports which the Company sends to its security holders generally, and copies of
all reports and registration statements which the Company or any of its
Subsidiaries files with the Securities and Exchange Commission or any national
securities exchange;
(l) upon the request of any Lender, through the Administrative Agent,
copies of all federal, state and local tax returns and reports filed by the
Company or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes);
(m) promptly and in any event within 30 days of the Company learning
of any of the following, written notice to the Administrative Agent of any of
the following:
(i) any Loan Party is or may be liable to any Person as a result
of a Release or threatened Release which could reasonably be expected to
subject such Loan Party to Environmental Liabilities and Costs of
$5,000,000 or more;
(ii) the receipt by any Loan Party of notification that any real
or personal property of such Loan Party is subject to any Environmental
Lien;
(iii) the receipt by any Loan Party of any notice of violation
of, or knowledge by such Loan Party that there exists a condition which
could reasonably be expected to result in a violation by such Loan Party or
any of its Subsidiaries of, any Environmental Law, except for violations
the consequence of which in the aggregate would have no reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $5,000,000 or more;
(iv) the commencement of any judicial or administrative
proceeding or investigation alleging a violation of any Environmental Law,
other than those the consequences of which in the aggregate would have no
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs of $5,000,000 or more;
(v) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of property, or any other action by any Loan Party or
any of its Subsidiaries other than those the consequences of which in the
aggregate have or would have in the reasonable judgment of the Company no
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs of $5,000,000 or more; and
(vi) any proposed action taken by any Loan Party or any of its
Subsidiaries to commence, recommence or cease manufacturing, industrial or
other operations other than those the consequences of which in the
aggregate have or would have in the reasonable judgment of the Company no
likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits that collectively require the
expenditure of $5,000,000 or more or become subject to additional
Environmental Liabilities and Costs of $5,000,000 or more;
(n) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement, other than those which in the
aggregate have in the reasonable judgment of the Company no likelihood of
subjecting the Loan Parties to Environmental Liabilities and Costs of $5,000,000
or more;
(o) promptly and in any event within two Business Days thereof,
notice of any (i) refusal of insurance for which any Loan Party has applied or
(ii) the termination of any insurance policy maintained by any Loan Party, in
each case, for reasons of uninsurability;
(p) promptly and in any event within five Business Days of entering
into the same, a copy of each Local Currency Guaranty;
(q) as soon as available and in any event within five days of the end
of each Fiscal Quarter, a report showing the aggregate amount of Contingent
Obligations incurred during such Fiscal Quarter under all Local Currency
Guaranties, the name of each Local Currency Borrower, whether such Local
Currency Borrower is a Subsidiary or a Minority Interest Venture, the name of
the Local Currency Lender to such Local Currency Borrower, the amount (in the
Dollar Equivalent as of the last Business Day of such Fiscal Quarter) of such
Local Currency Lender's loan commitment, the total amount of any outstanding
Local Currency Letters of Credit and the total amount of all outstanding Local
Currency Loans (in the Dollar Equivalent as of the last Business Day of such
Fiscal Quarter) of such Local Currency Borrower to such Local Currency Lender;
and
(r) such other information respecting the business, properties,
condition, financial or otherwise, or operations of any Loan Party or any of its
Subsidiaries as any Lender through the Administrative Agent may from time to
time reasonably request.
6.12. Employee Plans. With respect to any Pension Plan which is
intended to be a Qualified Plan hereafter adopted or maintained by the Company,
any of its Subsidiaries or any ERISA Affiliate, the Company shall (i) seek, and
cause such of its Subsidiaries and ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the Code, and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and Section
401(a) of the Code.
6.13. Fiscal Year. The Company shall maintain as its Fiscal Year the
period of 52 or 53 weeks ending on the Saturday nearest to January 31 of each
year.
6.14. Environmental. The Company shall, at its cost, upon receipt of
any notification or otherwise obtaining knowledge of any Release or other event
that could reasonably be expected to result in the Loan Parties incurring
Environmental Liabilities and Costs in excess of $5,000,000, conduct or pay for
consultants to conduct tests or assessments of environmental conditions at such
operations or properties, including, without limitation, the investigation and
testing of subsurface conditions, and shall take such remedial, investigational
or other action as required by Environmental Laws, as any Governmental Authority
requires pursuant to Environmental Laws, or as is appropriate and consistent
with good business practice.
6.15. Cash Management System. Each Loan Party shall establish and
maintain a cash management system which provides for all funds (subject to such
exceptions as are reasonably satisfactory to the Administrative Agent) received
by, or payable to, the Borrowers and the Guarantors to be deposited in or
forwarded in such manner as may be reasonably requested by the Administrative
Agent to cash concentration accounts maintained at Citibank or any Lender.
ARTICLE VII
NEGATIVE COVENANTS
Each Loan Party, on behalf of itself and its Subsidiaries, agrees with
the Lenders and the Administrative Agent that unless (a) the Majority Lenders
otherwise consent in writing or (b) (i) the Commitments have been terminated,
(ii) all Loans, accrued or matured interest and fees, and other then accrued and
payable monetary Obligations have been paid in full, and (iii) all then
outstanding Letters of Credit have been terminated, paid in full or fully cash
collateralized to the reasonable satisfaction of the Administrative Agent:
7.1. Liens, Etc. No Loan Party shall create or suffer to exist any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign any right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Purchase money Liens or purchase money security interests upon or
in any property (other than Collateral) acquired or held by any Loan Party to
secure the purchase price of such property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of such property, and Liens
existing on such property at the time of its acquisition (other than any such
Lien created in contemplation of such acquisition); provided, however, that
(i) any such Lien is created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost (including,
without limitation, the cost of construction) of the property subject thereto,
(ii) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such cost, (iii) such Lien does not extend to or cover any other
property other than such item of property and any improvements on such item, and
(iv) the aggregate principal amount of the Indebtedness secured by the Liens
permitted by this clause (b) shall not exceed $10,000,000 in the aggregate at
any time outstanding;
(c) Any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness or other Obligation secured by any Lien permitted
by subsections (b), (i), (j) or (k) of this Section 7.1 without any increase in
excess of costs and expenses associated therewith in the outstanding aggregate
principal amount of Indebtedness secured thereby or in the assets subject to
such Lien;
(d) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
any Loan Party or any Subsidiary thereof in the ordinary course of business
which secure its obligations to such Person; provided, however, that (i) such
Loan Party is not in default in respect of such obligations in an aggregate
amount in excess of $5,000,000 or (ii) such Loan Party is in good faith and by
appropriate proceedings diligently contesting such obligation, adequate
provision is made for the payment thereof and all such Liens in the aggregate
have no Material Adverse Effect;
(e) Liens (excluding Environmental Liens) securing taxes, assessments
or governmental charges, claims or levies to the extent such items are not
required to be paid pursuant to Section 6.2;
(f) Liens incurred or pledges and deposits made in the ordinary
course of business (other than in respect of extensions of credit) in connection
with workers' compensation, unemployment insurance, old-age pensions, other
social security benefits and other obligations (other than Indebtedness)
incurred in the ordinary course of business;
(g) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business, and judgment
liens; provided, however, that all such Liens (i) in the aggregate do not have a
Material Adverse Effect and (ii) do not secure directly or indirectly judgments
(not covered by insurance or an indemnity from a creditworthy party who, in
either case, has acknowledged coverage or is required to honor the same pursuant
to a final judgment or order) in excess of $5,000,000;
(h) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate render title thereto unmarketable or
impair, in any material manner, the use of such property for the purposes for
which such property is held by any Loan Party;
(i) Liens in favor of lessors securing operating leases;
(j) Liens existing on the date hereof and disclosed on Schedule 7.1;
(k) Liens arising under Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Subsection 7.2(g);
(l) expired financing statements, financing statements filed for
precautionary purposes in respect of operating leases, and financing statements
filed in respect of Liens permitted hereby;
(m) Liens not otherwise permitted by the foregoing clauses of this
Section 7.1 securing obligations or other liabilities (other than Indebtedness)
of any Loan Party; provided, however, that the aggregate amount of such
obligations and liabilities secured by such Liens shall not exceed $5,000,000 at
any time outstanding; and
(n) Liens (i) if any, on Accounts arising by reason of the
recharacterization of the sale of such Accounts by the Company or a Guarantor to
Funding as part of the Receivables Securitization or pursuant to the Factoring
Program or (ii) by reason of the filing of a financing statement in connection
with the Receivables Securitization or the Factoring Program naming the Company
or such Guarantor as debtor.
7.2. Indebtedness. No Loan Party shall create or suffer to exist any
Indebtedness except:
(a) the Obligations;
(b) Contingent Obligations permitted by Section 7.11;
(c) current liabilities for goods or services purchased in the
ordinary course of business;
(d) Indebtedness (i) owing to any Loan Party by any other Loan Party,
(ii) Indebtedness in an aggregate principal amount at any time outstanding not
in excess of $25,000,000 owing to one or more North American Ventures, Foreign
Ventures or Minority Interest Ventures by any Loan Party which Indebtedness, in
the case of this clause (ii), is subordinated in right of payment to the
Obligations and (iii) arising pursuant to the Securitization Documents and
evidenced by a note or notes from the Company to Funding in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding;
(e) Indebtedness secured by Liens permitted by Subsection 7.1(b);
(f) Indebtedness of any Loan Party under Capitalized Lease
Obligations; provided, however, that the aggregate amount of Capitalized Lease
Obligations incurred under this clause (f) and the aggregate amount of
Indebtedness incurred pursuant to clause (e) above by the Loan Parties shall not
exceed $25,000,000 at any one time outstanding;
(g) Indebtedness outstanding on the date hereof and listed on
Schedule 4.21 and refinancings thereof without any increase in the amount of
such Indebtedness;
(h) unsecured Indebtedness in an aggregate principal amount at any
time outstanding not in excess of $25,000,000;
(i) Indebtedness, if any, arising by reason of the recharacterization
of the sale of Accounts pursuant to the Receivables Securitization;
(j) Indebtedness, if any, in an aggregate principal amount not to
exceed $10,000,000 at any time outstanding arising by reason of the
recharacterization of the sale of Accounts pursuant to the Factoring Program;
(k) Indebtedness represented by the Convertible Subordinated Notes;
and
(l) Indebtedness represented by the Senior Notes and Senior
Subordinated Notes.
7.3. Sale/Leasebacks. No Loan Party shall become or remain liable as
lessee or guarantor or other surety with respect to any lease, whether an
operating lease or a Capitalized Lease, of any property (whether real or
personal or mixed), whether now owned or hereafter acquired, which any Loan
Party (a) has sold or transferred or is to sell or transfer to any other Person,
or (b) intends to use for substantially the same purposes as any other property
which has been or is to be sold or transferred by that entity to any other
Person in connection with such lease; provided, however, that any Loan Party may
become and remain so liable if such sale/leaseback transaction is between Loan
Parties; provided, further, that, notwithstanding the provisions of this Section
7.3, the Company may consummate a sale/leaseback transaction with respect to its
Cincinnati Properties.
7.4. Restricted Payments. No Loan Party shall (a) declare or make
any dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account or in respect of, or purchase, redeem or
otherwise acquire for value, any of its Stock or Stock Equivalents other than
(i) as long as no Event of Default is continuing, declarations and payments of
dividends by the Company in respect of its outstanding common stock and
purchases, redemptions and other acquisitions of Stock or Stock Equivalents of
the Company, in an aggregate amount in any Fiscal Year not in excess of 25% of
the Net Income of the Company for the previous Fiscal Year, (ii) (A) purchases,
redemptions and other acquisitions of Stock, and (B) settlements of Stock or
Stock Equivalents; provided, however, that the aggregate cash payments made by
the Company under clauses (ii)(A) and (B) of this Subsection 7.4(a) (as reduced,
in the case of all payments under clause (ii)(B) above, by the aggregate
payments received by the Company with respect to any such settlements) shall not
exceed $20,000,000 in the aggregate from the Effective Date, (iii) declarations
and payments of dividends by the Company in respect of its outstanding common
stock paid in, and purchases, redemptions and other acquisitions of Stock or
Stock Equivalents of the Company effected with, Stock or Stock Equivalents of
the Company in respect of which the Company has no purchase, redemption,
retirement, defeasance or other acquisition obligation, and (iv) declarations
and payments of dividends and other distributions to the Company or any other
Guarantor by any Guarantor or (b) purchase, redeem, prepay, defease or otherwise
acquire for value or make any payment (other than required purchases, mandatory
redemptions and other required payments) on account or in respect of any
principal amount of Indebtedness for Borrowed Money, now or hereafter
outstanding, except (i) the Loans, (ii) in the case of a Guarantor, payments to
the Borrowers or any other Guarantor on account of any Indebtedness owing to the
Borrowers or such other Guarantor by such Guarantor and (iii) in connection with
a refinancing of any Indebtedness permitted by Section 7.2.
7.5. Mergers, Borrower Stock Issuances, Sale of Assets, Etc. (a) No
Loan Party shall (i) merge with any Person; provided, however, that any
Guarantor may merge with and into the Company or any other Guarantor;
(ii) consolidate with any Person; (iii) except in respect of (A) a transaction
permitted by clause (i) of this Subsection 7.5(a), (B) an Investment permitted
by Section 7.6, or (C) the dissolution of a Guarantor, acquire all or
substantially all of the Stock or Stock Equivalents of any Person; (iv) except
in respect of (A) a transaction permitted by clause (i) of this Subsection
7.5(a), (B) an Investment permitted by Section 7.6, or (C) the dissolution of a
Guarantor, acquire all or substantially all of the assets of any Person or all
or substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person; (v) enter into any joint venture
or partnership with any Person except as permitted by Section 7.6; or (vi) sell,
lease, transfer or otherwise dispose of, whether in one transaction or in a
series of transactions any of its assets, including, without limitation,
substantially all assets constituting the business of a division, branch or
other unit operation except as permitted pursuant to Subsection (c) below.
(b) The Company shall not (i) issue or sell any of its Stock or Stock
Equivalents unless immediately after giving effect thereto such issuance or sale
does not result in a Change in Control, or (ii) sell, convey, transfer, lease or
otherwise dispose of, or permit any Guarantor to sell, convey, transfer, lease
or otherwise dispose of, any Stock or Stock Equivalents of any Subsidiary except
as permitted by Section 7.7.
(c) No Loan Party shall sell, convey, transfer, lease or otherwise
dispose of any of its assets or any interest therein to any Person, or permit or
suffer any other Person to acquire any interest in any of the assets of such
Loan Party except (i) the sale or disposition of (A) inventory in the ordinary
course of business, (B) equipment or motor vehicles which have become obsolete,
are replaced in the ordinary course of business, or which are no longer
necessary or useful in the reasonable judgment of such Loan Party for the
conduct of its business, or (C) the sale of the Cincinnati Properties, (ii) the
lease or sublease of real or personal property (including, without limitation,
office and retail space), that is not part of a sale and leaseback that is
otherwise prohibited by this Agreement, (iii) any such sale, conveyance,
transfer, lease or other disposition to another Loan Party, (iv) licenses of
intellectual property in the ordinary course of business to any Foreign Venture,
North American Venture or Minority Interest Venture, (v) Liens permitted by
Section 7.1, (vi) Investments permitted by Section 7.6 and sales, liquidations
and other dispositions of Cash Equivalents in the ordinary course of business,
(vii) the sale or purported sale of Accounts to Funding in connection with the
Receivables Securitization, and (viii) as long as no Default or Event of Default
is continuing or would result therefrom, any such sale of any assets for the
Fair Market Value thereof not exceeding an aggregate of $25,000,000 in any
Fiscal Year.
(d) The Company shall not sell or otherwise dispose of, or factor, or
permit any other Loan Party to sell or otherwise dispose of, or factor, any
Accounts except, as long as no Event of Default is continuing or would result
therefrom, (i) as permitted by clause (vii) of the immediately preceding
paragraph or (ii) pursuant to the Factoring Program; provided, however, that
with respect to clause (ii) above, the outstanding face amount of Accounts
included in the Factoring Program shall not at any time exceed $10,000,000.
7.6. Investments in Other Persons. No Loan Party shall, directly or
indirectly, make or maintain any loan or advance to any Person or own, purchase
or otherwise acquire, any Stock, Stock Equivalents, other equity interest,
obligations or other securities of, or any assets constituting the purchase of a
business or line of business, or make or maintain any capital contribution to,
or otherwise invest in, any other Person (any such transaction being an
"Investment"), except:
(a) Investments expressly permitted or required hereunder;
(b) Investments in accounts, contract rights and chattel paper (each
as defined in the Uniform Commercial Code), notes receivable and similar items
arising or acquired in the ordinary course of business consistent with the past
practice of the Company and its Subsidiaries;
(c) Investments in Guarantors;
(d) Investments in Minority Interest Ventures operating in lines of
business reasonably related or complementary to the businesses of the Loan
Parties and their Subsidiaries, made after the date hereof and not otherwise
permitted hereby, in an aggregate amount not in excess of $50,000,000
outstanding at any time (exclusive of appreciation and depreciation in value
thereof);
(e) personal loans or advances to employees of any Loan Party which
loans and advances do not in the aggregate exceed $5,000,000 outstanding at any
time;
(f) loans or advances to customers or suppliers of any Loan Party in
the ordinary course of business, which loans and advances do not in the
aggregate exceed $10,000,000 outstanding at any time;
(g) Investments in Cash Equivalents;
(h) Investments existing on the date hereof and set forth on Schedule
7.6;
(i) Investments in notes receivable and similar items received in
connection with sales and other dispositions of assets in accordance with the
terms hereof;
(j) Investments arising under hedging transactions to the extent
permitted under Section 7.15;
(k) Investments in Funding arising from the transfer by the Company
of Accounts to Funding or the issuance by the Company of one or more promissory
notes to Funding, in each case in connection with the Receivables
Securitization; provided, however, that at the time of and immediately after
giving effect to each such Investment, no Default or Event of Default exists or
would result and the aggregate amount of such Investments in Funding does not
exceed the amount necessary to consummate the transactions contemplated by the
Securitization Documents and that the aggregate outstanding principal amount of
the Indebtedness of the Company to Funding shall at no time exceed $5,000,000;
and
(l) any Investments not otherwise permitted by the foregoing clauses
of this Section 7.6 which, after giving effect to such Investment, would not
result in the Company's Maximum Leverage Ratio, on a pro forma consolidated
basis after giving effect to the Investment, exceeding 4.0:1.0.
7.7. Maintenance of Ownership of Subsidiaries. The Company shall not
sell or otherwise dispose of any shares of Stock or any Stock Equivalent of any
other Loan Party or Funding, or permit any other Loan Party or Funding to issue,
sell or otherwise dispose of any shares of its Stock or any Stock Equivalent or,
in the case of any Loan Party, the Stock or any Stock Equivalent of any other
Loan Party except (a) to a Loan Party and then only if pledged to the
Administrative Agent pursuant to the Pledge Agreement or a pledge agreement that
is substantially similar thereto, or (b) as permitted by Subsections 7.5(a) and
(c).
7.8. Change in Nature of Business. No Loan Party shall enter into
any type of business other than one carried on at the date hereof and other
businesses closely related thereto.
7.9. Modification of Material Agreements. No Loan Party shall alter,
amend, modify, rescind, terminate or waive any of their respective rights under,
or fail to comply in all material respects with, any of its material
Contractual Obligations; provided, however, that such Loan Party shall not be
deemed in default of this Section 7.9 if all such failures in the aggregate do
not have a Material Adverse Effect.
7.10. Accounting Changes. No Loan Party shall make any change in
accounting treatment and reporting practices or tax reporting treatment, except
as required by GAAP or law and disclosed in writing to the Administrative Agent.
7.11. Contingent Obligations. No Loan Party shall incur, assume,
endorse, be or become liable for, or guarantee, directly or indirectly, or
permit to or suffer to exist, any Contingent Obligation, except for:
(a) Contingent Obligations (other than Local Currency Guaranties)
evidenced by a Loan Document;
(b) Contingent Obligations (other than Local Currency Guaranties)
incurred by the Company or any Guarantor in respect of Indebtedness and other
obligations and liabilities of the Company or any Guarantor, to the extent such
underlying Indebtedness, obligations and liabilities are permitted hereby; and
(c) Contingent Obligations incurred by the Company or any Guarantor
after the date hereof under Local Currency Guaranties which do not at any time
exceed (i) $20,000,000 in the aggregate for all Local Currency Guaranties in
respect of Indebtedness and other obligations of Minority Interest Ventures,
(ii) $10,000,000 in the aggregate for all Local Currency Guaranties in respect
of Local Currency Letters of Credit and (iii) $50,000,000 in the aggregate for
all Local Currency Guaranties.
7.12. Transactions with Affiliates. No Loan Party shall, except as
otherwise expressly permitted herein, do any of the following: (a) make any
Investment in an Affiliate of the Company (other than Funding) which Affiliate
is not a Guarantor, (b) transfer, sell, lease, assign or otherwise dispose of
any asset to any Affiliate of the Company (other than Funding) which is not a
Guarantor, (c) merge into or consolidate with or purchase or acquire assets from
any Affiliate of the Company other than a Guarantor, (d) repay any Indebtedness
to any Affiliate of the Company (other than Indebtedness to Funding incurred in
connection with the Receivables Securitization in an aggregate principal amount
not exceeding $5,000,000) or (e) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate of the Company which is not
a Guarantor (including, without limitation, guaranties and assumptions of
obligations of any such Affiliate) except, in the case of each of clause (a)
through (e) above, for (i) transactions otherwise permitted herein, on a basis
no less favorable to the Company or such Guarantor as would be obtained in a
comparable arm's length transaction with a Person not an Affiliate,
(ii) arrangements with Affiliates of the Company or any of its Subsidiaries in
existence on the date hereof, (iii) salaries and other compensation of the
Company's and its Subsidiaries' respective directors, officers and employees,
(iv) transactions and other arrangements between (A) the Company and/or one or
more Guarantors, on the one hand, and (B) one or more North American Ventures,
Foreign Ventures and/or Minority Interest Ventures, on the other, to the extent
that (1) such transactions and other arrangements are not otherwise prohibited
hereby and (2) the business purpose achieved by such transaction or other
arrangement renders, in the good faith judgment of the Company and any
applicable Guarantor, the terms of such transaction reasonable and in
furtherance of the Company's or such Guarantors' businesses, and (v) any
transaction required or otherwise expressly permitted by this Agreement.
7.13. No New Subsidiaries. (a) The Company shall not, and shall not
permit any of the Guarantors to, incorporate or otherwise organize any Domestic
Subsidiary (other than a North American Venture) which was not in existence on
the Effective Date unless (i) such Domestic Subsidiary is a Wholly-Owned
Subsidiary, (ii) all of the Stock and Stock Equivalents of such Domestic
Subsidiary are pledged to the Administrative Agent pursuant to the Pledge
Agreement or a pledge agreement that is substantially similar thereto, (iii)
such Domestic Subsidiary (other than Funding) executes and delivers to the
Administrative Agent a Subsidiary Security Agreement, (iv) such Domestic
Subsidiary becomes a Guarantor under this Agreement pursuant to the terms of
Section 7.13(b) below, and (v) if such Domestic Subsidiary is Funding, the
Company pledges to the Administrative Agent, on behalf and for the ratable
benefit of the Secured Parties, pursuant to an amendment to the Pledge Agreement
in form and substance satisfactory to the Administrative Agent, any note of
Funding received by the Company in connection with the Receivables
Securitization.
(b) The Company shall promptly cause any Domestic Subsidiary to
become an additional Guarantor under this Agreement by executing an instrument,
in form and substance reasonably satisfactory to the Administrative Agent,
whereby such Domestic Subsidiary becomes a party to this Agreement as a
Guarantor.
7.14. Terms of Guarantors' Stock. No Guarantor shall make any change
in the terms of its outstanding Stock or Stock Equivalents.
7.15. No Speculative Transactions. No Loan Party shall engage in any
transaction involving derivatives or commodity options, futures or forward
contracts, except for the sole purpose of hedging in the normal course of
business and consistent with past practices.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default. Each of the following events shall be an
Event of Default:
(a) Any Borrower shall fail to pay any principal of any Loan when the
same becomes due and payable; or
(b) Any Borrower shall fail to pay any interest on any Loan, any fee
or any other amount due hereunder or under the other Loan Documents or any of
the other monetary Obligations within five days after the same becomes due and
payable; or
(c) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) Any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.4, 6.5, 6.9, 6.10 or
6.11 or Article VII, or (ii) any other term, covenant or agreement contained in
this Agreement or in any other Loan Document if such failure under this clause
(ii) shall remain unremedied for 15 days after the earlier of the date on which
(A) a Responsible Officer of the Company becomes aware of such failure or
(B) written notice thereof shall have been given to the Company by the
Administrative Agent or any Lender; or
(e) Any Loan Party shall fail to pay any payment in respect of any
Indebtedness for Borrowed Money of such Loan Party (or any Contingent Obligation
in respect of Indebtedness for Borrowed Money of any other Person) having a
principal amount of $5,000,000 or more (other than the Indebtedness incurred
hereunder), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) after giving
effect to any applicable grace period or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall become or be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), or any
Loan Party shall be required to repurchase or offer to repurchase such
Indebtedness, prior to the stated maturity thereof; or
(f) Any Loan Party 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 Loan Party 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 custodian, receiver, trustee or other similar official for it
or for any substantial part of its property and, in the case of any such
proceedings instituted against any Loan Party (but not instituted by it), either
such proceedings shall remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceedings shall occur; or any Loan Party
shall take any corporate action to authorize any of the actions set forth above
in this subsection (f); or
(g) Any judgment or order for the payment of money (to the extent not
covered by insurance or an indemnity from a creditworthy party who, in either
case, has acknowledged coverage or is required to honor the same pursuant to any
final judgment or order) in excess of $5,000,000 shall be rendered against any
Loan Party 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
20 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) (i) With respect to any Plan, a prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA shall occur which in
the reasonable determination of the Majority Lenders has a reasonable likelihood
of resulting in direct or indirect liability to any Loan Party, (ii) with
respect to any Title IV Plan, the filing of a notice to voluntarily terminate
any such plan in a distress termination, (iii) with respect to any Multiemployer
Plan, any Loan Party or any ERISA Affiliate shall incur any Withdrawal Liability
on account of a partial or complete withdrawal, (iv) with respect to any
Qualified Plan, any Loan Party or any ERISA Affiliate shall incur an accumulated
funding deficiency or request a funding waiver from the IRS, or (v) with respect
to any Title IV Plan or Multiemployer Plan which has an ERISA Event not
described in clauses (i) through (iv) hereof, in the reasonable determination of
the Majority Lenders there is a reasonable likelihood for termination of any
such plan by the PBGC; provided, however, that the events listed in clauses
(i) through (v) hereof shall constitute Events of Default only if the liability,
deficiency or waiver request of any Loan Party or any ERISA Affiliate, whether
or not assessed, exceeds $5,000,000 in any case set forth in (i) through (v)
above, or exceeds $5,000,000 for any three-year period in the aggregate for all
such cases;
(i) Any provision deemed material by the Majority Lenders in their
reasonable judgment of any Collateral Document or any Guaranty after delivery
thereof under Section 3.1 shall for any reason cease to be valid and binding on,
or enforceable against, any Loan Party party thereto, or any Loan Party shall so
state in writing; or
(j) Except as expressly set forth in any of the Collateral Documents
or Section 4.10, any Collateral Document after delivery thereof pursuant to
Section 3.1 shall, for any reason, cease to create valid Liens on any of the
Collateral purported to be covered thereby, or, except in respect of de minimis
portions of the Collateral, such Liens shall cease to be perfected and first
priority Liens, or any Loan Party shall so state in writing; or
(k) There shall occur any Change of Control; or
(l) There shall occur any change in the Company's arrangements in
respect of the Company's sourcing of its shoe inventory which has a Material
Adverse Effect; or
(m) Any Loan Party shall have entered into any consent or settlement
decree or agreement or similar arrangement with any Governmental Authority or
any judgment, order, decree or similar action shall have been entered against
any Loan Party, in either case based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrowers and the Guarantors are likely to incur
Environmental Liabilities and Costs (to the extent not covered by insurance or
an indemnity from a creditworthy party who, in either case, has acknowledged
coverage or is required to honor the same pursuant to any final judgment or
order) in excess of $10,000,000 in the aggregate.
8.2. Remedies. If there shall occur and be continuing any Event of
Default, the Administrative Agent (a) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Company, declare the
obligation of each Lender to make Loans and each Issuer to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, and
(b) shall at the request, or may with the consent, of the Majority Lenders by
notice to the Company, declare the Loans, all interest thereon and all other
amounts and Obligations payable under this Agreement to be forthwith due and
payable, whereupon all such interest and all such amounts and Obligations 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
Company and each other Borrower; provided, however, that upon the occurrence of
the Event of Default specified in Subsection 8.1(f), (A) the obligation of each
Lender to make Loans and of each Issuer to issue Letters of Credit shall
automatically be terminated and (B) the Loans, all such interest and all such
amounts and Obligations 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 Company and each other Borrower. In addition to
the remedies set forth in this Agreement, the Administrative Agent may exercise
any remedies provided for by the Collateral Documents in accordance with the
terms thereof or any other remedies provided by applicable law.
8.3. Actions in Respect of Letters of Credit.
(a) Upon the Termination Date or as required by Section 2.17(b), the
Company shall pay to the Administrative Agent in immediately available funds at
the Administrative Agent's office referred to in Section 11.2, for deposit in a
special interest-bearing cash collateral account (the "L/C Cash Collateral
Account") to be maintained with and in the name of the Administrative Agent on
behalf of the Secured Parties at such place as shall be designated by the
Administrative Agent, an amount equal to the sum of all outstanding Letter of
Credit Obligations less the then balance, if any, in the L/C Cash Collateral
Account.
(b) The Company hereby pledges, and grants to the Administrative
Agent a Lien on all of its right, title and interest in and to all funds held in
the L/C Cash Collateral Account from time to time, and all proceeds thereof, as
security for the payment of all amounts due and to become due from the Company
to the Lenders and the Issuers under the Loan Documents.
(c) The Administrative Agent may, from time to time after funds are
deposited in the L/C Cash Collateral Account, apply funds then held in the L/C
Cash Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become or shall become due and
payable by the Company to the Issuers or Lenders in respect of the Letter of
Credit Obligations. The Administrative Agent shall promptly give written notice
of any such application; provided, however, that the failure to give such
written notice shall not invalidate any such application.
(d) Neither the Company nor any Person claiming on behalf of or
through the Company shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations.
(e) The Company agrees that it will not (i) sell or otherwise dispose
of any interest in the L/C Cash Collateral Account or any funds held therein or
(ii) create or permit to exist any Lien upon or with respect to the L/C Cash
Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
(f) The Administrative Agent may exercise, in its sole discretion, in
respect of the L/C Cash Collateral Account, in addition to the other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform Commercial Code in
effect in the State of New York at that time, and the Administrative Agent may,
without notice except as specified below, sell the L/C Cash Collateral Account
or any part thereof in one or more sales, at public or private sale, at any of
the Administrative Agent's offices or elsewhere, for cash, or credit or for
future delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable. The Company agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Company of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of the L/C Cash Collateral Account, regardless
of notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the L/C Cash
Collateral Account or any of the assets contained therein, may, in the
discretion of the Administrative Agent, then or at any time thereafter be
applied (after all payments provided for in Subsection 8.3(c), the expiration of
all outstanding Letters of Credit and the payment of any amounts payable
pursuant to Section 11.4) in whole or in part by the Administrative Agent
against all or any part of the other Obligations in such order as the
Administrative Agent shall elect. Any surplus of such cash or cash proceeds
held by the Administrative Agent and remaining after the indefeasible cash
payment in full of all of the Obligations shall be paid over to the Company or
to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Authorization and Action. (a) Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents.
(b) As to any matters not expressly provided for by this Agreement
and the other Loan Documents, the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which the Administrative Agent in good faith believes exposes it to
personal liability or is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.
9.2. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent, nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any such
Affiliate shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement or the other Loan
Documents, except for its, his, her or their own gross negligence or wilful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent (a) may treat the payee of any Note as the holder thereof
until such note has been assigned in accordance with Section 11.7, (b) may rely
on the Register to the extent set forth in Subsection 11.7(c), (c) may consult
with legal counsel (including, without limitation, counsel to the Company or any
other 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, (d) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or any of the other Loan Documents,
(e) 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 or any
of the other Loan Documents on the part of the Company or any other Loan Party
or to inspect the property (including, without limitation, the books and
records) of the Company or any other Loan Party, (f) shall not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto, and (g) shall incur no liability under or in respect of this Agreement
or any of the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, cable,
telex or facsimile transmission) believed by it to be genuine and signed or sent
by the proper party or parties.
9.3. Citibank and Affiliates. With respect to its Revolving Credit
Commitment, the Loans made by it and each Note issued to it and Letters of
Credit issued by it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Company or any of its Subsidiaries and any Person who may do business with
or own securities of the Company or any of its Subsidiaries, all as if Citibank
were not the Administrative Agent and without any duty to account therefor to
the Lenders.
9.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements referred to in Article IV and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or 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 and other
Loan Documents.
9.5. Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Affiliates, and their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Company or the other Loan Parties), ratably according to the respective amounts
of the aggregate of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements (including, without limitation, fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Administrative Agent in any
way relating to or arising out of this Agreement or the other Loan Documents or
any action taken or omitted by the Administrative Agent under this Agreement or
the other Loan Documents; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or such Affiliate's gross negligence or wilful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any out-of-pocket expenses (including, without limitation, fees and
disbursements of legal counsel) incurred by the Administrative 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 its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Company or another Loan Party.
9.6. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent that is reasonably satisfactory to
the Borrower. If no successor Administrative Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of 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 Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
ARTICLE X
GUARANTY
10.1. Guaranty. The Company and each of the Guarantors hereby
jointly and severally unconditionally and irrevocably guarantee the full and
prompt payment when due, whether at stated maturity, by acceleration or
otherwise, of, and the performance of, the Obligations, including without
limitation in the case of the Company the Obligations incurred by any other
Borrower or Loan Party, whether now or hereafter existing and whether for
principal, interest, fees, expenses or otherwise, and any and all expenses
(including, without limitation, reasonable counsel fees and expenses) incurred
by any of the Lenders, the Issuers or the Administrative Agent (the "Guarantied
Parties") in enforcing any rights hereunder. This Guaranty is an absolute
guaranty of payment and performance and not a guaranty of collection.
10.2. Guaranty Absolute. The Company and each of the Guarantors
guarantee that the Obligations will be paid strictly in accordance with the
terms of this Agreement and the other Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Guarantied Parties with respect thereto. The
liability of the Company and each of the Guarantors under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of this
Agreement or any other Loan Document or any other agreement or instrument
relating to any Loan Document, or avoidance or subordination of any of the
Obligations;
(ii) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, this Agreement or any of the other Loan Documents;
(iii) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any other
guaranty of, or any consent to departure from any requirement of any other
guaranty of, all or any of the Obligations;
(iv) the absence of any attempt to collect any of the Obligations
from any Borrower or from any other Guarantor or any other action to enforce the
same or the election of any remedy by any of the Guarantied Parties;
(v) any waiver, consent, extension, forbearance or granting of any
indulgence by any of the Guarantied Parties with respect to any provision of
this Agreement or any other Loan Document;
(vi) the election by any of the Guarantied Parties in any proceeding
under chapter 11 of the Bankruptcy Code of the application of section 1111(b)(2)
of the Bankruptcy Code;
(vii) any borrowing or grant of a security interest by any borrower,
as debtor-in-possession, under section 364 of the Bankruptcy Code;
(viii) the disallowance, under section 502 of the Bankruptcy Code, of
all or any portion of the claims of any of the Guarantied Parties for payment of
any of the Obligations; or
(ix) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a borrower or a guarantor, other than
payment in full of the Obligations or the express written release by the
Guarantied Parties.
10.3. Waiver. (a) The Company and each Guarantor, to the fullest
extent permitted by law, hereby (i) waives (A) promptness, diligence, notice of
acceptance and any and all other notices with respect to any of the Obligations
or this Guaranty, except as otherwise specifically provided in this Guaranty,
(B) any requirement that any of the Guarantied Parties protect, secure, perfect
or insure any security interest in or other Lien on any property subject thereto
or exhaust any right or take any action against any Borrower or any other Person
or any Collateral, (C) protest or notice with respect to nonpayment of all or
any of the Obligations, (D) the benefit of any statute of limitation, and (E)
all demands whatsoever (and any requirement that same be made on the Borrower as
a condition precedent to the Guarantors' obligations hereunder), and (ii)
subject to the provisions of Section 10.7 hereof, covenants and agrees that this
Guaranty will not be discharged except by complete performance of the
Obligations and any other obligations of the Guarantors contained herein.
(b) If, in the exercise of any of its rights and remedies, any of the
Guarantied Parties shall forfeit any of its rights or remedies, including,
without limitation, its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable law pertaining
to "election of remedies" or the like, the Company and each Guarantor hereby
consent to such action by such Guarantied Party and waive any claim based upon
such action. Any election of remedies which results in the denial or impairment
of the right of such Guarantied Party to seek a deficiency judgment against any
Borrower shall not impair the obligation of the Company and each Guarantor to
pay the full amount of the Obligations or any other obligation of the Company
and each Guarantor contained herein.
(c) The Company and each Guarantor agree that notwithstanding the
foregoing and without limiting the generality of the foregoing if, after the
occurrence and during the continuance of an Event of Default, the Guarantied
Parties are prevented by applicable law from exercising their respective rights
to accelerate the maturity of the Obligations, to collect interest on the
Obligations, or to enforce or exercise any other right or remedy with respect to
the Obligations, or the Administrative Agent is prevented from taking any action
to realize on the Collateral, the Company and each Guarantor agree to pay to the
Administrative Agent for the account of the Guarantied Parties, upon demand
therefor, the amount that would otherwise have been due and payable had such
rights and remedies been permitted to be exercised by the Guarantied Parties.
(d) The Company and each Guarantor hereby assume responsibility for
keeping themselves informed of the financial condition of the Borrowers and of
each other Guarantor of all or any part of the Obligations, and of all other
circumstances bearing upon the risk of nonpayment of the Obligations or any part
thereof, that diligent inquiry would reveal. The Company and each Guarantor
hereby agree that the Guarantied Parties shall have no duty to advise the
Company or any Guarantor of information known to any of the Guarantied Parties
regarding such condition or any such circumstance. In the event that any of the
Guarantied Parties in its sole discretion undertakes at any time or from time to
time to provide any such information to the Company or any Guarantor, such
Guarantied Party shall be under no obligation (i) to undertake any investigation
not a part of its regular business routine, (ii) to disclose any information
which, pursuant to accepted or reasonable banking or commercial finance
practices, such Guarantied Party wishes to maintain confidential, or (iii) to
make any other or future disclosures of such information or any other
information to the Company or any Guarantor.
(e) The Company and each Guarantor consent and agree that the
Guarantied Parties shall be under no obligation to marshall any assets in favor
of the Company or any Guarantor or otherwise in connection with obtaining
payment of any or all of the Obligations from any Person or source.
10.4. No Subrogation, Etc. Except as provided in Section 10.8
hereof, the Company and each Guarantor waive and relinquish any and all rights
which they may acquire by way of subrogation, contribution or reimbursement by
reason of this Guaranty or by any payment made hereunder until the Obligations
have been paid in full.
10.5. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Company or any Guarantor
herefrom shall in any event be effective unless the same shall be in writing,
approved by the Majority Lenders and signed by the Administrative Agent, the
Company and the Guarantors, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Guarantied Parties, limit the liability of the
Company or any Guarantor or postpone any date fixed for payment hereunder.
10.6. No Waiver; Remedies. (a) No failure on the part of any
Guarantied Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder 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 or any of the other Loan
Documents.
(b) Failure by any of the Guarantied Parties at any time or times
hereafter to require strict performance by the Borrowers, any Guarantor or any
other Person of any of the provisions, warranties, terms or conditions contained
in this Agreement or any of the Loan Documents now or at any time or times
hereafter executed by any Borrower, any Guarantor or such other Person and
delivered to any of the Guarantied Parties shall not waive, affect or diminish
any right of any of the Guarantied Parties at any time or times hereafter to
demand strict performance thereof, and such right shall not be deemed to have
been modified or waived by any course of conduct or knowledge of any of the
Guarantied Parties or any agent, officer, employee of any of the Guarantied
Parties.
(c) No waiver by the Guarantied Parties of any default shall operate
as a waiver of any other default or the same default on a future occasion, and
no action by any of the Guarantied Parties permitted hereunder shall in way
affect or impair any of the rights of the Guarantied Parties or the obligations
of the Company or any of the Guarantors under this Guaranty or under this
Agreement or any of the other Loan Documents. Any determination by a court of
competent jurisdiction of the amount of any principal and/or interest or other
amount constituting any of the Obligations shall be conclusive and binding on
the Company and the Guarantors irrespective of whether the Company or any of the
Guarantors was a party to the suit or action in which such determination was
made.
10.7. Continuing Guaranty; Termination. (a) This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until payment
in full of the Obligations and all other amounts payable under this Guaranty,
(ii) be binding upon the Company and each Guarantor, its successors and assigns,
and (iii) inure to the benefit of and be enforceable by the Guarantied Parties
and their respective successors and permitted assigns. Without limiting the
generality of the foregoing clause (iii), any of the Guarantied Parties may
assign or otherwise transfer any Obligation owing to it to any other Person, and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to such Guarantied Party herein or otherwise with respect to
such of the Obligations so transferred or assigned, subject, however, to
compliance with the provisions of Section 11.7 of this Agreement in respect of
assignments.
(b) With respect to the Company and each Guarantor, this Guaranty and
all of the guaranties and agreements contained herein shall automatically
terminate and be of no further force and effect on the date at which (i) the
Commitments have been terminated, (ii) all Loans, accrued or matured interest
and fees, and other then accrued and payable monetary Obligations have been paid
in full (subject to Section 10.9 hereof), and (iii) all Letters of Credit have
been terminated, paid in full or fully cash collateralized in a manner
satisfactory to the Administrative Agent in its reasonable judgment.
Additionally, with respect to the Company and any Guarantor, this Guaranty and
all of the guaranties and agreements made by such Guarantor contained herein
shall automatically terminate and be of no further force and effect upon the
sale by the Company of its entire equity interest in such Guarantor to the
extent permitted hereunder. Upon any such termination, the Guarantied Parties
shall deliver to any such Guarantor (at such Guarantor's expense) such documents
as such Guarantor may reasonably request to evidence such termination.
10.8. Contribution. To the extent that any Guarantor shall be
required hereunder to pay a portion of the Obligations which shall exceed the
greater of (a) the amount of the economic benefit actually received by such
Guarantor from the Revolving Credit Loans, the Multicurrency Loans, the Swing
Loans, the Competitive Loans and the Letters of Credit and (b) the amount which
such Guarantor would otherwise have paid if such Guarantor had paid the
aggregate amount of Obligations (excluding the amount thereof repaid by any
Borrower and the other Guarantors) in the same proportion as such Guarantor's
net worth at the date enforcement hereunder is sought bears to the aggregate net
worth of all the Guarantors at the date enforcement hereunder is sought, then
such Guarantor shall be reimbursed by the other Guarantors for the amount of
such excess, pro rata based on the respective net worths of such other
Guarantors at the date enforcement hereunder is sought.
10.9. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Loan Party for liquidation or reorganization, should any Loan Party become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Loan
Party's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations or such part thereof, whether as a "voidable
preference", "fraudulent transfer", or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
10.10. Amendment to Subsidiary Security Agreements. Each Guarantor
hereby agrees that the Subsidiary Security Agreement executed by such Guarantor
is amended so that references therein to the "Guaranty" are references to the
Guaranty as set forth in this Article X and confirms that its obligations under
the Subsidiary Security Agreement executed by it remain in full force and
effect.
ARTICLE XI
MISCELLANEOUS
11.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Company therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Article III except as otherwise provided therein,
(b) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the Loans
or any fees or other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the Loans or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or the
aggregate unpaid principal amount of the Loans or Letter of Credit Obligations
which shall be required for the Lenders or any of them to take any action
hereunder, (f) release all or substantially all of the Collateral except as
shall otherwise be provided in Section 7.5 or in the Collateral Documents, (g)
release any Guarantor from a Guaranty, except as shall otherwise be provided in
such Guaranty, or (h) amend this Section 11.1 or the definition of the term
"Majority Lenders" contained in Section 1.1; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent or the Issuers in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent or the
Issuers, respectively, under this Agreement or the other Loan Documents.
11.2. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Company or any Borrower, at
the Company's address at 11933 Westline Industrial Drive, St. Louis, Missouri
63146 (telecopy number: (314) 434-0409) (telephone number: (314) 579-8812),
Attention: Chief Financial Officer, with a copy to the Company at its address at
9 West Broad Street, Stamford, Connecticut 06902 (telecopy number: (203)
978-6020) (telephone number: (203) 328-4386), Attention: General Counsel; if
to
any Lender, at its Domestic Lending Office specified opposite its name on
Schedule II; if to Citibank in its capacity as Issuer, at its address at 399
Park Avenue, New York, New York 10403 (telecopy number: (212) 793-7585)
(telephone number: (212) 559-3215), Attention: Robert Snell; and if to the
Administrative Agent, at its address at Citibank Delaware, Global Loan Product
Service Center, Suite 200, 2 Penns Way, New Castle, Delaware 19720, (telecopy
number (302) 894-6137) (telephone number: (302) 894-6005), Attention: David
Meckler; or, as to the Company, any Borrower, any Lender, any Issuer or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, cabled or delivered, be
effective when deposited in the mails, delivered to the telegraph company,
confirmed by telex answerback, telecopied with confirmation of receipt,
delivered to the cable company or delivered by hand to the addressee or its
agent, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or IX shall not be effective until
received by the Administrative Agent.
11.3. No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder 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.
11.4. Costs; Expenses; Indemnities. (a) The Company agrees to pay
promptly after a demand therefor (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, each of the other Loan Documents and each of the other documents to
be delivered hereunder and thereunder, including, without limitation, (A) the
reasonable fees and out-of-pocket expenses of Weil, Gotshal & Manges LLP,
counsel to the Administrative Agent but no other counsel to the Administrative
Agent, any Lender or any Issuer without the approval of the Borrower, (B) all
filing and recording fees, and all syndication (including printing, distribution
and bank meetings), transportation and audit costs and expenses, and (ii) all
costs and expenses of the Administrative Agent, each Issuer and each Lender
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel retained by the Administrative Agent, any Issuer or any Lender) in
connection with the restructuring or enforcement (whether through negotiation,
legal proceedings or otherwise) of this Agreement and the other Loan Documents.
(b) The Company agrees to indemnify and hold harmless the
Administrative Agent, each Issuer and each Lender and their respective
Affiliates, and the directors, officers, employees, agents, attorneys,
consultants and advisors of or to any of the foregoing (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including, without limitation,
reasonable fees and disbursements of counsel to any such Indemnitee, but subject
to the second proviso contained in this sentence) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any investigation, litigation or proceeding or the preparation of
any defense with respect thereto, whether or not any such Indemnitee is a party
thereto, whether direct, indirect, or consequential and whether based on any
federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, or any act, event
or transaction related or attendant to any thereof, including, without
limitation, (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Company or any of
its Subsidiaries involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning the Company or any of its
Subsidiaries; (iii) any costs or liabilities incurred in connection with any
Environmental Lien; (iv) any costs or liabilities incurred in connection with
any other matter under any Environmental Law, including, without limitation,
CERCLA and applicable state property transfer laws, whether, with respect to any
of the foregoing, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Company or
any of its Subsidiaries, or the owner, lessee or operator of any property of the
Company or any of its Subsidiaries by virtue of foreclosure, except, with
respect to any of the foregoing referred to in clauses (i), (ii), (iii) and
(iv), as set forth in the following proviso or to the extent (A) incurred
following foreclosure by the Administrative Agent, any Issuer or any Lender, or
the Administrative Agent, any Issuer or any Lender having become the successor
in interest to the Company or any of its Subsidiaries, and (B) attributable
solely to acts of the Administrative Agent, such Issuer or such Lender; or (v)
the use or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Company
shall not have any obligation under this Subsection 11.4(b) to an Indemnitee
with respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order (or by a
settlement tantamount to such a final decision), but in no event shall any
Indemnitee be liable for any exemplary or punitive damages to the extent
permitted by applicable law; and provided further, however, that in connection
with any investigation, litigation or proceeding of the type referred to above,
or the preparation of a defense with respect thereto, the Company shall not be
responsible for, or required to hold harmless any Indemnitee from and against,
the fees and disbursements of more than one counsel for all of the Indemnified
Parties taken together, except to the extent any such Indemnitee requires its
own counsel in order to be adequately represented in the reasonable judgment of
counsel for such Indemnitee.
(c) If any Lender receives any payment of principal of, or is subject
to a conversion of, any Eurodollar Rate Loan or Fixed Rate Loan other than on
the last day of an Interest Period relating to such Loan, as a result of any
payment or conversion made by the Company or acceleration of the maturity of the
Loans pursuant to Section 8.2 or for any other reason, the Company shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender all amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment or conversion,
including, without limitation, any loss (including, without limitation, 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 or
maintain such Loan, assuming for such purpose that, in the case of a Eurodollar
Rate Loan, such Lender has funded such Eurodollar Rate Loan in the London
interbank eurodollar market with a loan of the same amount and Interest Period
as such Eurodollar Rate Loan.
(d) The Company shall indemnify the Administrative Agent, the Issuers
and the Lenders for, and hold the Administrative Agent and the Lenders harmless
from and against, any and all claims for brokerage commissions, fees and other
compensation made against the Administrative Agent, the Issuers and the Lenders
for any broker, finder or consultant with respect to any agreement, arrangement
or understanding made by or on behalf of the Company or any of its Subsidiaries
in connection with the transactions contemplated by this Agreement.
(e) The Administrative Agent, each Issuer and each Lender agree that
in the event that any such investigation, litigation or proceeding set forth in
subparagraph (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Company in writing.
(f) The Company, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action, and the Company, in any event, may participate in the
defense thereof with legal counsel of the Company's choice. In the event that
such Indemnitee requests the Company to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Company shall
promptly do so and such Indemnitee at its own cost and expense shall have the
right to have legal counsel of its choice participate in such defense. No
action taken by legal counsel chosen by such Indemnitee in defending against any
such investigation, litigation or proceeding or requested Remedial Action, shall
vitiate or in any way impair the Company's obligation and duty hereunder to
indemnify and hold harmless such Indemnitee.
(g) The Company agrees that any indemnification or rights in respect
thereof provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 11.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
11.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default each Lender 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
to or for the credit or the account of any Borrower or any other Loan Party
against any and all of the Obligations now or hereafter existing irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any Note or any Reimbursement Agreement or any other Loan Document and although
such Obligations may be unmatured. Each Lender agrees promptly to notify the
relevant Borrower after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to the other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
11.6. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Company, the other Borrowers, the Guarantors and
the Administrative Agent and when the Administrative Agent shall have been
notified by each Lender and each Issuer that such Lender and such Issuer has
executed it and thereafter shall be binding upon and inure to the benefit of the
Company, the other Borrowers, the Guarantors, the Administrative Agent, each
Lender and each Issuer and their respective successors and permitted assigns,
except that no Loan Party shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of all the Lenders.
11.7. Assignments and Participations. (a) Each Lender may sell,
transfer, negotiate or assign to one or more Eligible Assignees all or a portion
of its Commitments, commitment to issue Letters of Credit, the Loans and Letter
of Credit Obligations owing to it and a commensurate portion of its rights and
obligations hereunder and under the other Loan Documents; provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and obligations as a Lender
making Revolving Credit Loans under this Agreement, (ii) the aggregate amount of
the Commitment, Loans and participation in Letter of Credit Obligations 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 (if
less than the Assignor's entire interest) be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, except, in either case, (A)
with the consent of the Company and the Administrative Agent or (B) if such
assignment is being made to an existing Lender, (iii) if such Eligible Assignee
is not, prior to the date of such assignment, a Lender or an Affiliate of a
Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and the Company (which consent shall not be unreasonably
withheld) and (iv) in the case of any Initial Lender unless such assignment is
an assignment of such Initial Lender's entire interest in the Loans such Initial
Lender is required to retain an interest in the Loans equal to at least
$15,000,000 (except as such Initial Lender's interest in the Loans may be
reduced below $15,000,000 by scheduled repayments or prepayments, whether
mandatory or optional). The parties to each assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with any Revolving Credit Note (or an
Affidavit or Loss and Indemnity with respect to such Revolving Credit Note
satisfactory to the Administrative Agent) subject to such assignment. Upon such
execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee in respect thereof of an assignment fee
in the amount of $2,500, from and after the effective date specified in such
Assignment and Acceptance, (A) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender, and if such Lender was an Issuer,
of such Issuer hereunder and thereunder, and (B) the assignor thereunder shall,
to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those which survive the payment in full of the Obligations) and be
released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under the Loan Documents, 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 of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document or of any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this Agreement
and each of the Loan Documents together with a copy of the most recent financial
statements delivered by the Company to the Lenders pursuant to each of the
clauses of Section 6.11 (or if no such statements have been delivered, the
financial statements referred to in Section 4.5 of this Agreement) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; (vii) Subsection 2.15(f) and Section 11.7 have been complied with; and
(viii) such assignee 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 and if such assignor Lender was the Issuer, as the
Issuer.
(c) The Administrative Agent shall maintain at its address referred
to in Section 11.2 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 Commitments of, commitments to issue Letters of Credit,
Letter of Credit Obligations owing to, and principal amount of the Loans owing
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Loan Parties, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender or the Issuer, as the case
may be, for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Administrative Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, together with any
Revolving Credit Note, issued pursuant to Section 2.6(h), subject to such
assignment, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company. Within 10 Business Days after
its receipt of such notice and a request therefor, the Company, at its own
expense, shall execute and deliver to the Administrative Agent, in exchange for
such surrendered Revolving Credit Note, new notes to the order of such Eligible
Assignee in an amount equal to the Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained Commitments
hereunder, new notes to the order of the assigning Lender in an amount equal to
the Commitments retained by it hereunder.
(e) In addition to the other assignment rights provided in this
Section 11.7, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement to any Federal Reserve Bank without notice to or
consent of the Company or the Administrative Agent; provided, however, that no
such assignment shall release the assigning Lender from any of its obligations
hereunder. The terms and conditions of any such assignment and the
documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
(f) Each Lender may sell participations to one or more banks or other
Persons in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitments,
commitment to issue Letters of Credit, the Letter of Credit Obligations owing to
it, and the Loans owing to it). Each Lender will notify the Administrative
Agent (which shall promptly notify the Borrower) of any such participations.
The terms of such participation shall not, in any event, require the
participant's consent to any amendments, waivers or other modifications of any
provision of any Loan Documents, the consent to any departure by any Loan Party
therefrom, or to the exercising or refraining from exercising any powers or
rights which such Lender may have under or in respect of the Loan Documents
(including, without limitation, the right to enforce the obligations of the Loan
Parties), except if any such amendment, waiver or other modification or consent
would (i) reduce the amount, or postpone any date fixed for, any amount (whether
of principal, interest or fees) payable to such participant under the Loan
Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with the Loan Documents. In the event of
the sale of any participation by any Lender, (A) such Lender's obligations under
the Loan Documents (including, without limitation, its Commitments and
commitment hereunder to issue Letters of Credit) shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (C) such Lender shall remain the holder of
such Notes and Obligations for all purposes of this Agreement, and (D) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(g) The Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Administrative Agent and the parties thereto.
(h) Subject to clause (D) of the last sentence of Subsection 11.7(f),
each participant shall be entitled to the benefits of Sections 2.11, 2.13 and
2.15 as if it were a Lender; provided, however, that anything herein to the
contrary notwithstanding, the Company shall not, at any time, be obligated to
pay, in the aggregate, to or for the benefit of the participants of the interest
of any Lender and such Lender, under Section 2.11, 2.13 or 2.15, any sum in
excess of the sum which the Company would have been obligated to pay to such
assigning Lender in respect of such interest had such participations not been
sold.
11.8. Additional Borrowers. The Company may from time to time cause
any Subsidiary to become an additional Borrower under this Agreement (a "New
Borrower") by causing such New Borrower to execute a Borrower Accession
Agreement substantially in the form of Exhibit N hereto, or such other writing
reasonably satisfactory to the Administrative Agent. No New Borrower will be
entitled to borrow under this Agreement until the Administrative Agent has
received, with respect to each New Borrower, the items referred to in Sections
3.1(a) - (d) and 3.1(g), together with a legal opinion from independent counsel
in the jurisdiction of incorporation of such New Borrower, in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders.
11.9. Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
11.10. Submission to Jurisdiction; Service of Process. (a) Any
legal action or proceeding with respect to this Agreement or any document
related thereto may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, each Loan Party hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Loan Party hereto, the
Administrative Agent and each Lender hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.
(b) Each Loan Party irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such Loan
Party at its address provided herein.
(c) Each Loan Party hereby irrevocably designates, appoints and
empowers Corporation Service Company, 80 State Street, Albany, New York 12207
(telephone no: 1-800-833-9848)(telecopy no: 518-433-4741) (the "Process Agent"),
in the case of any suit, action or proceeding brought in the United States of
America as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents that may be served in any action
or proceeding arising out of or in connection with this Agreement or any Loan
Document. Such service may be made by mailing (by registered or certified mail,
postage prepaid) or delivering a copy of such process to the relevant Loan Party
in care of the Process Agent at the Process Agent's above address, and each Loan
Party hereby irrevocably authorizes and directs the Process Agent to accept such
service on its behalf. As an alternative method of service, each Loan Party
also irrevocably consents to the service of any and all process in any such
action or proceeding by the mailing (by registered or certified mail, postage
prepaid) of copies of such process to such Loan Party at its address specified
in Section 11.02. Each Loan Party 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.
(d) Nothing contained in this Section 11.10 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Company in any other jurisdiction.
(e) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 A.M. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
(f) The obligation of each Loan Party in respect of any sum
due from
it to any Lender, any Multicurrency Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than Dollars, be
discharged only to the extent that on the Business Day following receipt by such
Lender, such Multicurrency Lender or the Administrative Agent, as the case may
be, of any sum adjudged to be so due in such other currency such Lender, such
Multicurrency Lender or the Administrative Agent, as the case may be, may in
accordance with normal banking procedures purchase Dollars with such other
currency. If the Dollars so purchased are less than the sum originally due to
such Lender, such Multicurrency Lender or the Administrative Agent, as the case
may be, in Dollars the relevant Loan Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender, such Multicurrency
Lender or the Administrative Agent, as the case may be, against such loss, and
if the Dollars so purchased exceed the sum originally due to the Lenders, the
Multicurrency Lenders or the Administrative Agent in Dollars, such Lender, such
Multicurrency Lender or the Administrative Agent, as the case may be, agrees to
remit to such Loan Party such excess.
11.11. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
11.12. 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.
11.13. Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder, and the fee agreements referred to in Section 2.4 embody the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.
11.14. Confidentiality. Each Lender and the Administrative Agent
agree to keep information (including, without limitation, the Environmental
Reports) obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Administrative Agent's, as
the case may be, customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's or the
Administrative Agent's, as the case may be, employees, representatives, agents
and affiliates who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender or the Administrative Agent, as the case may be, on a non-confidential
basis from a source other than the Company or any of its Subsidiaries, (c) to
the extent disclosure is required by law, regulation or judicial order or
requested or required by bank regulators or auditors, or (d) to assignees or
participants or potential assignees or participants who agree in writing for the
benefit of the Company to be bound by the provisions of this sentence.
11.15. Waiver of Jury Trial. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, oral or written statement
or action of any party hereto.
11.16. Surrender of Original Notes. Each Lender shall surrender the
original Notes held by it with respect to the Term Loan and Revolving Credit
Commitments of such Lender outstanding under the Existing Credit Agreement as at
the Effective Date.
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
Borrowers
---------
NINE WEST GROUP INC.
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
NINE WEST UK HOLDINGS LIMITED
By: /s/ Robert C. Galvin
Title: Vice President
NINE WEST ASIA LTD.
By: /s/ Robert C. Galvin
Title: Vice President
NINE WEST MELBOURNE PTY LTD
By: /s/ Robert C. Galvin
Title: Vice President
NINE WEST CANADA CORPORATION
By: /s/ Noel E. Hord
Title: President and Cheif Operating Officer
Guarantors
----------
NINE WEST GROUP INC.
By: /s/ Robert C. Galvin
Title:
NINE WEST MANUFACTURING
CORPORATION
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
NINE WEST FOOTWEAR CORPORATION
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
NINE WEST DISTRIBUTION CORPORATION
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
NINE WEST DEVELOPMENT CORPORATION
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
NINE WEST BOOT CORPORATION
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
COMMUNITY URBAN REDEVELOPMENT
OF DUCK CREEK, INC.
By: /s/ Robert C. Galvin
Title: Executive Vice President, Chief
Financial Officer and Treasurer
Administrative Agent
--------------------
CITIBANK, N.A.,
By: /s/ Allen Fisher
Title: Vice President
Lenders
-------
CITIBANK, N.A.
as Managing Agent, Lender and Issuer
By: /s/ Allen Fisher
Title: Vice President
BANK OF AMERICA ILLINOIS
as Managing Agent and Lender
By: /s/ Jody Pritchard
Title: Assistant Vice President
BANK OF MONTREAL
as Managing Agent and Lender
By: /s/ D.W. Rourke
Title: Director
THE BANK OF NEW YORK
as Managing Agent and Lender
By: /s/ Michael Flannery
Title: Vice President
THE BANK OF NOVA SCOTIA
as Managing Agent and Lender
By: /s/ F.C.M. Ashby
Title: Senior Manager Loan Operations
NATIONSBANK, N.A.
as Managing Agent and Lender
By: /s/ Jaun A. Cazorla
Title: Vice President
BANK OF BOSTON CONNECTICUT
as Managing Agent and Lender
By: /s/ W. Lincoln Schoff
Title: Director
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCH
as Managing Agent and Lender
By: /s/ Joel D. Makowsky
Title: Assistant Vice President
By: /s/ Elizabeth Hope Tallmadge
Title: Director
CREDIT LYONNAIS NEW YORK BRANCH
as Co-Agent and Lender
By: /s/ Rod Hurst
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
as Co-Agent and Lender
By: /s/ Takuya Honjo
Title: Senior Vice President
MERCANTILE BANK OF ST. LOUIS, NA
as Lender
By: /s/ Timothy W. Hassler
Title: Assistant Vice President
THE SANWA BANK, LTD.
as Lender
By: /s/ Dominic J. Sorresso
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
as Lender
By: /s/ John Runger
Title: Managing Director
THE SUMITOMO BANK, LIMITED
as Lender
By: /s/ Michael F. Murphy
Title: Vice President and Manager
By: /s/ H.W. Redding
Title: Vice President and Manager
ALLIED IRISH BANK
as Lender
By: /s/ Marcia Meeker
Title: Vice President
By: /s/ W.J. Strickland
Title: Senior Vice President
PERFORMANCE PRICING SCHEDULE
(in percentage points per annum)
Applicable Base Rate Margin, LIBOR Margin, Facility Fees and Letter of
Credit Fees
The Applicable Base Rate Margin, LIBOR Margin, Facility Fees and Letter of
Credit Fees shall remain the same, increase or decrease, as the
case may be, in accordance with the following schedule:
Facility Fee is payable quarterly in arrears on the first day of each
calendar quarter and computed on a 360-day basis.
<TABLE>
<S> <C> <C> <C> <C> <C>
Basis for Pricing * LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- ------------------- ------------ ---------- ----------- ---------- -------
If the ratio of
Indebtedness for
Borrowed Money to
EBITDA ("Leverage <2.00 =>2.00 and =>2.50 and =>3.25 and =>3.50
Ratio") is: <2.50 <3.25 <3.50
or
the Facility
Rating** is: BBB- or Baa3 BB+ or Ba1
Facility Fee
(Undrawn cost) 0.125 0.17 0.20 0.225 0.25
LIBOR Margin 0.275 0.355 0.425 0.525 0.625
Drawn cost
(Facility Fee+
LIBOR Margin) 0.40 0.525 0.625 0.75 0.875
Base Rate Margin 0.00 0.00 0.00 0.00 0.00
The fee in respect
of Standby Letters
of Credit 0.275 0.40 0.55 0.625 0.75
The fee in respect
of Documentary
Letters of Credit 0.10 0.15 0.25 0.35 0.40
</TABLE>
* If, as a result of a differential between the Leverage Ratio and the
Facility Rating, there is a discrepancy of more than one pricing level at
any time, applicable pricing will be determined by reference to the pricing
level which is one level lower than the highest of such pricing levels. If
the Facility Rating is ever below BB+/Ba1, then the Leverage Ratio alone
will determine pricing. However, if the Leverage Ratio is at Level V,
Level V pricing will apply in all circumstances.
** The Facility Rating, where applicable, is the current rating by either
Moody's or S&P of the Company's obligations under the Credit Agreement. If
there is a discrepancy of one "notch" in the ratings ascribed by Moody's
and S&P, the rating which corresponds to the lower pricing level will apply
in order to determine pricing; provided, however, that if at any time there
is a discrepancy of more than one notch, the pricing level will be one
level lower than the highest applicable pricing level.
<TABLE>
EXHIBIT 12
NINE WEST GROUP INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Thirteen Weeks Ended Year Ended
-------------------- ----------------------------------------------------
May 3 May 4 Feb. 1 Feb. 3 Dec. 31 Dec. 31 Dec. 31
1997 1996 1997 1996 1994 1993 1992
-------- ------- -------- ------- -------- ------- -------
Earnings:
- ---------
Income before provision
for income taxes per
statement of income........ $28,792 $25,082 $139,406(A) $33,634(B) $106,809 $79,453 $52,415
Add:
Portion of rents
representative of the
interest factor........... 6,961 6,184 26,887 19,965 9,099 6,633 5,066
Interest on indebtedness.. 11,882 9,727 40,629 29,761 2,343 3,323 7,014
Amortization of debt
expense and premium....... 532 405 2,348 1,054 - - -
------- ------- -------- ------- -------- ------- -------
Income as adjusted........ $48,167 $41,398 $209,270(A) $84,414(B) $118,251 $89,409 $64,495
======= ======= ======== ======= ======== ======= =======
Fixed Charges:
- --------------
Portion of rents
representative of the
interest factor........... $ 6,961 $ 6,184 $ 26,887 $19,965 $ 9,099 $ 6,633 $ 5,066
Interest on indebtedness.. 11,882 9,727 40,629 29,761 2,343 3,323 7,014
Amortization of debt
expense and premium....... 532 405 2,348 1,054 - - -
------- ------- -------- ------- -------- ------- -------
Fixed charges............. $19,375 $16,316 $ 69,864 $50,780 $ 11,442 $ 9,956 $12,080
======= ======= ======== ======= ======== ======= =======
Ratio of earnings to
fixed charges............. 2.49 2.54 3.00(A) 1.66(B) 10.33 8.98 5.34
======= ======= ======== ======= ======== ======= =======
(A) Income from continuing operations for 1996 was $83.6 million, or $2.26 per share on a fully diluted
basis, compared to income from continuing operations of $19.0 million, or $0.53 per share, for 1995.
Results for 1996 include a net pretax charge of $19.0 million, of which approximately $13.8 million
represents non-cash charges, primarily attributable to costs associated with the restructuring of North
American manufacturing facilities.
(B) Includes the impact of: (1) a $34.9 million Cost of Goods Sold Adjustment; and (2) $51.9 million in
business restructuring and integration expenses and charges associated with the integration of the
Footwear Group into the Company.
</TABLE>
EXHIBIT 23.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nine West Group Inc. on Form S-3 of our report dated March 17, 1997, appearing
in the Annual Report on Form 10-K/A No. 1 of Nine West Group, Inc. for the
fifty-two week period ended February 1, 1997 and to the reference to us under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Stamford, Connecticut
August 20, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated May
11, 1995 appearing in the Current Report of Form 8-K dated May 23, 1995 filed by
Nine West Group Inc. and to all references to our Firm included in this
Registration Statement.
/S/ARTHUR ANDERSEN LLP
Cincinnati, Ohio
August 19, 1997
