SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 10-Q
-------------------------
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarter ended July 31, 1995. OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition from ________ to _____________.
Commission file number: 1-9494
TIFFANY & CO.
(Exact name of registrant as specified in its charter)
Delaware 13-3228013
(State of incorporation) (I.R.S. Employer Ident. No.)
727 Fifth Ave. New York, NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 755-8000
Former name, former address and former fiscal year, if changed since last
report _________.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ___X___. No_____.
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock as of the latest
practicable date: Common Stock, $.01 par value, 15,746,297 shares outstanding
at the close of business on July 31, 1995.<PAGE>
TIFFANY & CO. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JULY 31, 1995
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 1995
(Unaudited) and January 31, 1995 3
Consolidated Statements of Income - for the
three and six months ended July 31, 1995
and 1994 (Unaudited) 4
Consolidated Statements of Stockholders' Equity -
for the three and six months ended
July 31, 1995 (Unaudited) 5
Consolidated Statements of Cash Flows - for
the six months ended July 31, 1995 6
and 1994 (Unaudited)
Notes to Consolidated Financial Statements 7-8
(Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
(a) Exhibits
(b) Reports on Form 8-K
- 2 -<PAGE>
<TABLE>
CAPTION
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
July 31, January 31,
1995 1995*
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and short-term investments $ 30,655 $ 44,318
Accounts receivable, less allowances of
$5,246 and $5,721 53,416 61,622
Income tax receivable 0 7,925
Inventories 299,698 270,075
Prepaid expenses 23,492 17,868
-------- --------
Total current assets 407,261 401,808
Property and equipment, net 111,894 103,478
Deferred income taxes 14,763 14,094
Other assets, net 30,036 31,992
-------- --------
$563,954 $551,372
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 55,995 $ 60,696
Accounts payable and accrued liabilities 87,404 81,640
Income taxes payable 7,519 13,607
Merchandise and other customer credits 9,032 8,529
-------- --------
Total current liabilities 159,950 164,472
Long-term trade payable 31,103 27,591
Reserve for product return 13,053 13,103
Long-term debt 101,500 101,500
Deferred income taxes 2,482 3,298
Postretirement/employment benefit obligation 17,457 16,581
Other long-term liabilities 3,369 3,130
Commitments and contingencies
Stockholders' equity:
Common Stock, $.01 par value; authorized
30,000 shares, issued 15,746 and 15,703 157 157
Additional paid-in capital 72,955 71,821
Retained earnings 156,297 151,032
Foreign currency translation adjustments 5,631 (1,313)
-------- --------
Total stockholders' equity 235,040 221,697
-------- --------
$563,954 $551,372
======== ========
* Reclassified for comparative purposes
</TABLE>
See notes to consolidated financial statements
- 3 -<PAGE>
<TABLE>
CAPTION
<PAGE>
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
For The For The
Three Months Ended Six Months Ended
July 31, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $184,682 $152,257 $334,826 $283,464
Cost of goods sold 88,264 73,336 161,045 137,344
-------- -------- -------- --------
Gross profit 96,418 78,921 173,781 146,120
Selling, general and administrative
expenses 83,489 69,520 153,761 130,303
Provision for uncollectible accounts 362 383 696 686
-------- -------- -------- --------
Income from operations 12,567 9,018 19,324 15,131
Other expenses, net 3,222 2,955 6,183 5,771
-------- -------- -------- --------
Income before income taxes 9,345 6,063 13,141 9,360
Provision for income taxes 4,037 2,613 5,673 4,034
-------- -------- -------- --------
Net income $ 5,308 $ 3,450 $ 7,468 $ 5,326
======== ======== ======== =========
Net income per share:
Primary $ 0.33 $ 0.22 $ 0.47 $ 0.34
======== ======== ======== =========
Fully diluted $ 0.33 $ 0.22 $ 0.47 $ 0.34
======== ======== ======== =========
Weighted average number of common shares:
Primary 15,962 15,895 15,912 15,845
Fully diluted 16,939 16,817 16,927 16,811
See notes to consolidated financial statements.
</TABLE>
- 4 -<PAGE>
<TABLE>
<CAPTION>
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Foreign
Total Additional Currency
Stockholders' Common Stock Paid-In Retained Translation
Equity Shares Amount Capital Earnings Adjustments
------------- ------ ------ ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, January 31, 1995 $221,697 15,703 $157 $71,821 $151,032 $(1,313)
Issuance of Common Stock 598 19 - 598 - -
Exercise of stock options 231 15 - 231 - -
Tax benefit from exercise of
stock options 107 - - 107 - -
Cash dividends on Common Stock (1,101) - - - (1,101) -
Foreign currency translation
adjustments 7,893 - - - - 7,893
Net income 2,160 - - - 2,160 -
------- ------ ---- ------ -------- -------
BALANCES, April 30, 1995 231,585 15,737 157 72,757 152,091 6,580
======= ====== ==== ====== ======= =======
Exercise of stock options 113 9 - 113 - -
Tax benefit from exercise of
stock options 85 - - 85 - -
Cash dividends on Common Stock (1,102) - - - (1,102) -
Foreign currency translation
adjustments ( 949) - - - - ( 949)
Net income 5,308 - - - 5,308 -
------- ------ ---- ------ -------- -------
BALANCES, July 31, 1995 $235,040 15,746 $157 $72,955 $156,297 $ 5,631
======= ====== ==== ====== ======= =======
See notes to consolidated financial statements
</TABLE>
- 5 -<PAGE>
<TABLE>
CAPTION
<PAGE>
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands) For the
Six Months Ended
July 31,
1995 1994*
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 7,468 $ 5,326
Adjustments to reconcile net income to net
cash provided by/(used in) operating activities:
Depreciation and amortization 9,037 7,467
Provision for uncollectible accounts 696 686
Reduction in reserve for product return (50) (343)
Provision for inventories 1,310 1,412
Deferred income taxes (1,613) (489)
Income tax receivable 7,925 (1,340)
Loss on sale of fixed assets 609 -
Provision for postretirement/employment benefits 876 1,502
(Increase)/decrease in assets and increase/
(decrease) in liabilities
Accounts receivable 10,198 10,065
Inventories (16,610) (19,492)
Prepaid expenses (4,999) (2,442)
Other assets, net 1,354 (3,595)
Accounts payable 5,213 (8,998)
Accrued liabilities (563) 1,177
Income taxes payable (6,620) (2,918)
Merchandise and other customer credits 503 154
Other long-term liabilities 229 23
-------- --------
Net cash provided by/(used in) operating activities 14,963 (11,805)
-------- --------
Cash Flows From Investing Activities:
Capital expenditures (15,903) (6,626)
Proceeds from sale of fixed assets 82 -
Other - (133)
-------- --------
Net cash used in investing activities (15,821) (6,759)
-------- --------
Cash Flows From Financing Activities:
(Decrease)/increase in short-term borrowings (11,736) 22,877
Issuance of Common Stock 598 -
Proceeds from exercise of stock options 344 390
Tax benefit from exercise of stock options 192 116
Cash dividends on Common Stock (2,203) (2,194)
-------- --------
Net cash (used in)/provided by financing activities (12,805) 21,189
Net (decrease)/increase in cash and
short-term investments (13,663) 2,625
Cash and short-term investments at beginning
of year 44,318 4,994
-------- --------
Cash and short-term investments at end of six
months $ 30,655 $ 7,619
======== ========
Supplemental Disclosure Of Cash Flow Information:
Cash paid during the six months for:<PAGE>
Interest expense $ 6,365 $ 7,006
======== ========
Income taxes (Net of $7,925 Federal income
tax refund) $ 5,678 $ 8,551
======== ========
*Reclassified for comparative purposes
</TABLE>
See notes to consolidated financial statements
- 6 -<PAGE>
TIFFANY & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the accounts
of Tiffany & Co. and all majority-owned domestic and foreign
subsidiaries (the "Company"). All material intercompany balances and
transactions have been eliminated. The statements are without audit
and, in the opinion of management, include all adjustments (which
include only normal recurring adjustments except for the adjustment
necessary as a result of the LIFO method of inventory valuation, which
is based on assumptions as to inflation rates and projected fiscal year-
end inventory levels) necessary to present fairly the Company's
financial position as of July 31, 1995 and the results of operations and
cash flows for the interim periods presented. The audited financial
statements for January 31, 1995 are presented without accompanying
footnotes which are included in the Company's Form 10-K filing.
Since the Company's business is seasonal, with a higher proportion of
sales and income generated in the last quarter of the fiscal year, the
results of operations for the three and six months ended July 31, 1995
and 1994 are not necessarily indicative of the results of the entire
fiscal year.
2. INVENTORIES
Inventories at July 31, 1995 and January 31, 1995 are summarized
as follows:
July 31, January 31,
1995 1995
(in thousands)
-------- ----------
Finished goods $247,910 $227,412
Raw materials 48,509 38,262
Work in process 6,482 6,869
-------- --------
302,901 272,543
Reserves (3,203) (2,468)
-------- --------
$299,698 $270,075
======== ========
At July 31, and January 31, 1995, $205,829,000 and $189,943,000,
respectively, of inventories were valued using the LIFO method. The
excess of such inventories valued at replacement cost over the value
based upon the LIFO method was approximately $11,070,000 and $9,770,000
at July 31, 1995 and January 31, 1995, respectively. The LIFO
valuation method had the effect of decreasing net income by $0.01 per
share, for the three month periods ended July 31, 1995 and 1994,
respectively. The LIFO valuation method had the effect of decreasing
net income by $0.05 per share for the six month periods ended July 31,
1995 and 1994, respectively.
- 7 -<PAGE>
3. REVOLVING CREDIT FACILITY
In June 1995, the Company entered into an agreement for a new five-year
$130,000,000 multicurrency revolving credit facility which replaced a
$100,000,000 revolving credit facility and yen 2,500,000,000
($28,275,000) non-collateralized line of credit, both of which expired
in July 1995. The new syndicated facility entitles the Company to
borrow up to $25,000,000 on a pro-rata, non-collateralized basis from
each of four banks and up to $30,000,000 from the agent bank at interest
rates based upon a prime rate or reserve adjusted LIBOR.
4. EARNINGS PER SHARE
Primary earnings per common share data has been computed by dividing net
income by the weighted average number of shares outstanding during the
period, including dilutive stock options. Fully diluted earnings per
common share has been computed by dividing net income, after giving
effect to the elimination of interest expense and bond amortization
fees, net of income tax effect, applicable to the convertible
subordinated debentures, by the weighted average number of shares
outstanding including dilutive stock options and the assumed conversion
of the subordinated debentures using the "if converted" method.
5. SUBSEQUENT EVENT
On August 21, 1995, Tiffany's Board of Directors declared a quarterly
dividend of $0.07 per common share. This dividend will be paid on
October 10, 1995 to stockholders of record on September 20, 1995.
- 8 -<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company operates three channels of distribution: U.S. Retail includes
retail sales in Company-operated stores in the U.S. and wholesale sales to
independent retailers in North America; Direct Marketing includes corporate
(business-to-business) and catalog sales; and International Retail includes
retail sales through Company-operated stores and boutiques, corporate sales,
and wholesale sales to independent retailers and distributors in Asia-Pacific,
Europe, Canada and the Middle East.
Net sales increased 21% in the three months (second quarter) ended July 31,
1995 and rose 18% in the six months (first half) ended July 31, 1995. Sales by
channel of distribution were as follows:
Three months ended Six months ended
July 31, July 31,
(in thousands) 1995 1994 1995 1994
-------------------- ------- -------- -------- --------
U.S. Retail $ 82,140 $ 67,794 $143,909 $125,018
Direct Marketing 20,357 20,681 39,120 39,488
International Retail 82,185 63,782 151,797 118,958
------- ------- -------- --------
$184,682 $152,257 $334,826 $283,464
======= ======== ======== ========
U.S. Retail sales increased 21% in the second quarter and 15% in the first
half. Comparable store sales rose 15% in the second quarter and 12% in the
first half. New York retail sales increased 13% and 10% in the second quarter
and first half, while comparable branch store sales rose 17% and 14% in the
second quarter and first half. The sales increases resulted largely from a
greater number of retail transactions, primarily by local-resident customers
and, to a lesser extent, purchases by foreign tourists. Strong performances by
the Company's newer U.S. stores in Oak Brook, Maui and White Plains
contributed to the overall U.S. Retail sales increase.
Direct Marketing sales declined 2% in the second quarter and 1% in the first
half. Increased catalog circulation and a higher number of orders contributed
to catalog sales increases of 16% in the second quarter and 14% in the first
half. However, corporate division sales declined 11% in the second quarter and
8% in the first half, reflecting continued cautious spending by the corporate
division's customers.
International Retail sales increased 29% and 28% in the second quarter and
first half. The increases resulted from comparable store sales increases in
Japan (the Company's largest international market) of 11% in yen in both the
second quarter and first half, sales growth in other Asia-Pacific markets and
Europe, and the translation effect of a weak U.S. dollar on sales made in
foreign currencies, especially in Japanese yen. Management believes the
Company's results in Japan have benefitted from merchandising and marketing
initiatives, as well as from favorable consumer response to price reductions
made in Japan in October 1993 and June 1994.
- 9 -<PAGE>
The Company's reported sales and earnings results benefit from a strengthening
Japanese yen and are adversely affected by a strengthening U.S. dollar. The
Company maintains a foreign currency hedging program for merchandise purchase
transactions initiated from Japan in order to reduce the potential negative
impact on the Company's financial results of a significant strengthening of
the U.S. dollar against the yen. The Company's pretax expense related to its
hedging program was $238,000 in 1995's second quarter and $490,000 in the
first half, compared with $182,000 and $366,000 in the respective 1994
periods.
Gross margin (gross profit as a percentage of net sales) of 52.2% in the
second quarter and 51.9% in the first half compared with 51.8% and 51.5% in
the comparable 1994 periods. The increases were primarily attributable to
favorable shifts in sales mix toward the Company's retail businesses,
particularly Japan, that achieve gross margins above the Company's average.
Operating expenses (selling, general and administrative expenses and the
provision for uncollectible accounts) increased 20% in the second quarter and
18% in the first half over the corresponding 1994 periods. The increases were
largely due to: incremental occupancy, staffing and marketing expenses related
to the Company's worldwide expansion program; the weakened U.S. dollar and its
effect on the translation of overseas operating expenses into U.S. dollars;
and sales-related variable expenses (including selling fees paid to department
stores in Japan). As a percentage of net sales, the operating expense ratio
in the second quarter improved to 45.4% in 1995 versus 45.9% in 1994, and
improved in 1995's first half to 46.1% compared with 46.2% in the
corresponding 1994 period.
The above factors led to net income increasing 54% to $5,308,000, or $0.33 per
share, in the second quarter and increasing 40% to $7,468,000, or $0.47 per
share, in the first half.
FINANCIAL CONDITION
Management believes that the Company's financial condition at July 31, 1995
provides sufficient liquidity and resources to support current business
activity and planned expansion.
Working capital and the current ratio were $247,311,000 and 2.5:1 at July 31,
1995 compared with $237,336,000 and 2.4:1 at January 31, 1995. Inventories
(which represent the largest component of working capital) at July 31, 1995
were 11% higher than at January 31, 1995. A significant portion of the
increase was due to the weakened U.S. dollar and its effect on the translation
of overseas inventories into U.S. dollars and, to a lesser extent, to
merchandise purchases to support sales growth, new stores and expanded product
offerings. Inventory turnover was 1.0 times at July 31, 1995 and 0.9 times at
January 31, 1995. The Company's objective is to continue to improve inventory
performance through: refinement of replenishment systems; merchandising
management's focus on the specialized disciplines of product development,
assortment planning and inventory management; improving the presentation and
management of display inventories in each store; and assortment editing by
product category.
- 10 -<PAGE>
Capital expenditures were $15,903,000 in 1995's first half, compared with
$6,626,000 in 1994's first half. The increase was related to the opening
and/or renovation of retail stores, as well as relocations and/or renovations
of certain administrative and manufacturing facilities. Based on current
expansion plans, the Company expects capital expenditures in fiscal 1995 will
be approximately $30,000,000, compared with $18,977,000 in fiscal 1994.
The Company incurred a net cash inflow from operating activities of
$14,963,000 in the first half of 1995, compared with an outflow of $11,805,000
in 1994's first half. Net-debt (short-term borrowings and long-term debt,
less cash and short-term investments) and the ratio of net-debt to total
capital (net-debt and stockholders' equity) was $126,840,000 and 35% at July
31, 1995 compared with $117,878,000 and 35% at January 31, 1995. In addition,
the Company had a long-term trade payable of yen 2,750,000,000 ($31,103,000)
at July 31, 1995 and yen 2,750,000,000 ($27,591,000) at January 31, 1995 which
relates to certain merchandise repurchased in 1993 as part of the Company's
realignment of its Japan business and is payable to Mitsukoshi Ltd. on
February 28, 1998. It is management's goal, on an annual basis, to improve
inventory turnover and generate excess cash flow to reduce the ratio of net-
debt to total capital.
The Company's sources of working capital are internally generated cash flow
and funds available under a five-year, $130,000,000 multicurrency revolving
credit facility established in June 1995 to replace a $100,000,000 revolving
credit facility and a yen 2,500,000,000 ($28,275,000) non-collateralized line
of credit. Management anticipates that internally generated funds and funds
available under the new facility will be sufficient to support the Company's
planned worldwide business expansion, as well as seasonal working capital
increases typically required during the third and fourth quarters of each
year.
In August 1995, the Company entered into a lease agreement for a 270,000
square foot distribution, office and manufacturing facility which will
consolidate its existing New Jersey facilities. Under the terms of the
agreement, the Company's operating lease commitment will approximate
$3,700,000 annually over a 12-year period expected to begin in late 1996.
The Company's business is seasonal in nature, with the fourth quarter
typically representing a proportionally greater percentage of annual sales,
income from operations, net income and cash flow. Management expects such
seasonality to continue in the future.
- 11 -<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
At Registrant's Annual Meeting of Stockholders held on May 18, 1995 each of
the nominees listed below was elected a director of Registrant to hold office
until the next annual meeting of the stockholders and until his or her
respective successor has been elected and qualified. Tabulated with the name
of each of the nominees elected is the number of Common shares cast for each
nominee and the number of Common shares withholding authority to vote for each
nominee. There were no broker non-votes or abstentions with respect to the
election of directors.
Nominee Voted For Withholding Authority
William R. Chaney 14,684,332 37,659
Jane Dudley 14,674,076 47,915
Samuel L. Hayes III 14,675,028 46,963
Michael J. Kowalski 14,685,669 36,322
Charles K. Marquis 14,685,361 36,630
James E. Quinn 14,685,649 36,642
Yoshiaki Sakakura 14,508,887 213,104
William A. Shutzer 14,685,126 36,856
Geraldine Stutz 14,674,849 47,142
At such meeting, the stockholders approved the appointment of Coopers &
Lybrand L.L.P. as independent auditors of the Company's fiscal 1995 financial
statements. With respect to such appointment, 14,700,862 shares were voted to
approve, 16,066 shares were voted against, and 5,063 shares abstained from
voting. There were no broker non-votes with respect to the approval of the
appointment of Coopers & Lybrand L.L.P.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.116 Credit Agreement dated as of June 26, 1995 by and among
Tiffany & Co., Tiffany and Company, Tiffany & Co.
International, The Bank of New York, as Issuing Bank and
as Swing Line Lender, The Bank of New York, as Arranging
Agent and The Bank of New York as Administrative Agent.
10.117 Lease Agreement dated as of August 1, 1995 by and among
Fidelity Bank, National Association, not in its individual
capacity, but solely as the trustee under that certain
Trust Agreement 1995-1 dated as of July 1, 1995, as Owner-
Lessor and Tiffany and Company, a New York corporation, as
Lessee.
- 12 -<PAGE>
10.118 Construction Agency Agreement dated as of August 1, 1995
by and between Tiffany and Company, a New York corporation
and First Fidelity Bank, National Association, a national
banking association, not in its individual capacity but
solely as trustee pursuant to a Trust Agreement 1995-1
dated as of July 1, 1995, for design and construction of
improvements on certain land in Parsippany, New Jersey.
11 Statement re Computation of Per Share Earnings.
(b) Reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TIFFANY & CO.
(Registrant)
Date: September 13, 1995 By: /s/ James N. Fernandez
James N. Fernandez
Senior Vice President - Finance
and Chief Financial Officer
(principal financial officer)
- 13 -<PAGE>
EXHIBIT INDEX
Exhibit
Number
10.116 Credit Agreement dated as of June 26, 1995 by and among Tiffany &
Co., Tiffany and Company, Tiffany & Co. International, The Bank of
New York, as Issuing Bank and as Swing Line Lender, The Bank of New
York, as Arranging Agent and The Bank of New York as Administrative
Agent.
10.117 Lease Agreement dated as of August 1, 1995 by and among Fidelity
Bank, National Association, not in its individual capacity, but
solely as the trustee under that certain Trust Agreement 1995-1
dated as of July 1, 1995, as Owner-Lessor and Tiffany and Company, a
New York corporation, as Lessee.
10.118 Construction Agency Agreement dated as of August 1, 1995 by and
between Tiffany and Company, a New York corporation and First
Fidelity Bank, National Association, a national banking association,
not in its individual capacity but solely as trustee pursuant to a
Trust Agreement 1995-1 dated as of July 1, 1995, for design and
construction of improvements on certain land in Parsippany, New
Jersey.
11 Statement re Computation of Per Share Earnings.<PAGE>
<TABLE>
CAPTION
<PAGE>
Item 6. TIFFANY & CO. AND SUBSIDIARIES
EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(in thousands, except per share data)
For The For The
Three Months Ended Six Months Ended
July 31, July 31,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE:
Net income on which primary
earnings per share are based $ 5,308 $ 3,450 $ 7,468 $ 5,326
======= ======= ======= =======
Weighted average number of
common shares 15,752 15,674 15,740 15,669
Add:
Weighted average effect of the
exercise of stock options 210 221 172 176
------- ------- ------- -------
Weighted average number of shares on
which primary earnings are based 15,962 15,895 15,912 15,845
======= ======= ======= =======
Primary net income per common share $ 0.33 $ 0.22 $ 0.47 $ 0.34
======= ======= ======= =======
FULLY DILUTED EARNINGS PER SHARE:
Net income on which primary earnings
per share are based $ 5,308 $ 3,450 $ 7,468 $ 5,326
Add:
Interest and fees on convertible
subordinated debt, net of
applicable income taxes 428 494 870 988
------- ------- ------- -------
Net income on which fully diluted
earnings per share are based $ 5,736 $ 3,944 $ 8,338 $ 6,314
======= ======= ======= =======
Weighted average number of common
shares used in calculating
fully diluted earnings per share 16,046 15,924 16,034 15,918
Add:
Shares assumed upon conversion
of convertible debt, using the
"if converted" method 893 893 893 893
------- ------- ------- -------
Weighted average number of shares
used in calculating fully diluted
earnings per share 16,939 16,817 16,927 16,811
======= ======= ======= =======
Fully diluted net income per common share $ 0.33 $ 0.22 $ 0.47 $ 0.34
======= ======= ======= =======<PAGE>
NOTE: In anticipation of the 6 3/8% Convertible Subordinated Debenture's dilutive effect
in the fourth quarter, fully diluted earnings per share reflects the weighted
average number of common shares outstanding under the "if converted" method which
assumes conversion as of the bond issuance date of the Debentures. The "if
converted" method resulted in fully diluted earnings per share equal to primary
earnings per share for the three and six months ended July 31, 1995 and 1994. <PAGE>
</TABLE>
CREDIT AGREEMENT
by and among
TIFFANY & CO.,
TIFFANY AND COMPANY,
TIFFANY & CO. INTERNATIONAL,
THE SUBSIDIARY BORROWERS PARTY HERETO,
THE LENDERS PARTY HERETO,
THE BANK OF NEW YORK,
as Issuing Bank and as Swing Line Lender,
THE BANK OF NEW YORK,
as Arranging Agent,
and
THE BANK OF NEW YORK,
as Administrative Agent
$130,000,000
Dated as of June 26, 1995
1<PAGE>
Credit Agreement, dated as of June 26, 1995, by and among
Tiffany & Co., a Delaware corporation (the "Parent"), Tiffany and
Company, a New York corporation ("Tiffany"), Tiffany & Co.
International, a Delaware corporation ("Tiffany International"),
each Subsidiary Borrower which is a signatory hereto or becomes a
party hereto pursuant to the provisions of Section 2.23, the
Lenders party hereto, The Bank of New York ("BNY"), as Issuing
Bank and as Swing Line Lender, BNY, as Arranging Agent (in such
capacity, the "Arranging Agent") and BNY, as Administrative Agent
(in such capacity, the "Administrative Agent").
I. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
A. Definitions
When used herein, each of the following terms shall
have the meaning ascribed thereto unless the context hereof
otherwise specifically requires:
"ABR Advances": the Loans (or any portions thereof) at
such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Alternate Base
Rate; each an "ABR Advance".
"Accountants": Coopers & Lybrand, or such other firm of
independent certified public accountants of recognized national
standing as shall be selected by the Parent and reasonably sat-
isfactory to the Administrative Agent.
"Accumulated Funding Deficiency": as defined in Section
302 of ERISA.
"Acquisition": with respect to any Person, the purchase
or other acquisition by such Person, by any means whatsoever
(including by devise, bequest, gift, through a dividend or
otherwise), of (a) Stock of, or other equity securities of, any
other Person if, immediately thereafter, such other Person would
be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern
or division or segment thereof, or (c) the Property of any other
Person other than in the ordinary course of business, provided,
however, that no acquisition of substantially all of the assets,
or any division or segment, of such other Person shall be deemed
to be in the ordinary course of business.
"Advance": an ABR Advance, a Eurodollar Advance, a Core
Currency Euro Advance or a Swing Line Negotiated Rate Advance, as
the case may be.
"Adverse Tax Position": as defined in Section 2.13(g).
2<PAGE>
"Affiliate": with respect to any Person at any time and
from time to time, any other Person (other than a consolidated
subsidiary of such Person) which, at such time (a) controls such
Person, or (b) is under common control with such Person. The
term "control", as used in this definition with respect to any
Person, means the power, whether direct, or indirect through one
or more intermediaries, to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities or other interests, by contract or
otherwise.
"Aggregate Commitments": on any date, the sum of all
Commitments on such date.
"Aggregate Credit Exposure": as of any date of de-
termination, the sum of (i) the outstanding principal amount
(determined on the basis of the Dollar Equivalent for each
outstanding Alternate Currency Loan) of the Loans of all Lenders
plus (ii) an amount equal to the Letter of Credit Exposure.
"Agreement": this Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest
per annum equal to the higher of (i) the Federal Funds Rate in
effect on such date plus 1/2 of 1% or (ii) the BNY Rate in effect
on such date.
"Alternate Currency": any Core Currency (other than
Dollars) or Non-Core Currency.
"Alternate Currency Bid Loan": each Bid Loan denomi-
nated in an Alternate Currency.
"Alternate Currency Equivalent": with respect to any
Alternate Currency, on any date of determination thereof, the
amount of such Alternate Currency which could be purchased with
the amount of Dollars involved in such computation at the spot
rate at which such Alternate Currency may be exchanged into
Dollars as set forth on such date on (i) Reuters pages MGTY,
MGTX, SCNY or BNMX or (ii) Dow Jones Telerate pages 262, 264,
265, 266 or 9993 (or any successor pages) or, if such rate does
not appear on such pages, at the spot exchange rate therefor as
determined by the Administrative Agent as of 11:00 A.M. (London
time) on such date of determination thereof for delivery (x) in
the case of an exchange of Canadian Dollars into Dollars, one
Business Day later and (y) in all other cases, two Business Days
later. In the event that, on any date of determination, a spot
rate for an individual Alternate Currency appears on both a page
of Reuters set forth above and a page of Dow Jones Telerate set
forth above, the Alternate Currency Equivalent of such Alternate
Currency shall be the arithmetic mean of such spot rates.
3<PAGE>
"Alternate Currency Loan": any Alternate Currency
Revolving Loan, Alternate Currency Bid Loan, Alternate Currency
Negotiated Rate Loan, Alternate Currency Swing Line Loan or
Individual Currency Loan.
"Alternate Currency Negotiated Rate Loan": each
Negotiated Rate Loan denominated in an Alternate Currency.
"Alternate Currency Revolving Loan": each Revolving
Loan denominated in a Core Currency (other than Dollars).
"Alternate Currency Swing Line Loan": each Swing Line
Loan denominated in a Core Currency (other than Dollars).
"Applicable": with respect to Regulation D being
applicable to any determination of a Core Currency Euro Rate or
an Individual Currency Rate, that Regulation D reserves would be
applicable to the Core Currency Euro Advance or the Individual
Currency Loan, as the case may be, as to which such interest rate
would apply (including by giving effect to the assumption that
the applicable Lender had funded such Core Currency Euro Advance
or such Individual Currency Loan, as the case may be, through the
purchase of a Core Currency or a Non-Core Currency, as the case
may be, deposit by a subsidiary or affiliate of such Lender in
the London interbank market and the transfer thereof to such
Lender from such subsidiary or affiliate).
"Applicable Currency":
(a) With respect to any Revolving Loan or Swing Line
Loan for any applicable Borrower, Dollars and each Available
Alternate Currency which is a Core Currency as follows:
(i) in the case of Dollars: a Domestic Borrower,
(ii) in the case of French Francs: the French
Borrower,
(iii) in the case of German Marks: the German
Borrower,
(iv) in the case of Japanese Yen: the Japanese
Borrower, and
(v) in the case of Sterling Pounds: the Sterling
Borrower.
(b) With respect to any Bid Loan, the Currency
specified by the applicable Borrower in its Bid Request for such
Bid Loan.
(c) With respect to any Negotiated Rate Loan, the
4<PAGE>
Currency specified in the Negotiated Rate Confirmation for such
Negotiated Rate Loan.
(d) With respect to any Individual Currency Loan for
any applicable Borrower, each Available Alternate Currency which
is a Non-Core Currency as follows:
(i) in the case of Australian Dollars: the
Australian Borrower,
(ii) in the case of Canadian Dollars: the Canadian
Borrower,
(iii) in the case of Hong Kong Dollars, the
Hong Kong Borrower,
(iv) in the case of Italian Lira: the Italian
Borrower,
(v) in the case of Korean Won: the Korean
Borrower,
(vi) in the case of Malaysian Ringgit: the
Malaysian Borrower,
(vii) in the case of Mexican Pesos: the
Mexican Borrower,
(viii) in the case of Philippine Pesos: the
Philippine Borrower,
(ix) in the case of Singaporean Dollars: the
Singaporean Borrower,
(x) in the case of Swiss Francs: the Swiss
Borrower,
(xi) in the case of New Taiwan Dollars: the
Taiwanese Borrower, and
(xii) in the case of Thai Baht: the Thai
Borrower.
"Applicable Lending Office": (i) as to any Lender, with
respect to Revolving Loans in any Core Currency, initially, the
office, branch or affiliate of such Lender designated as such
Lender's lending office for Revolving Loans in such Core Currency
on Exhibit R, and thereafter, such other office, branch or
affiliate of such Lender through which it shall be making or
maintaining Revolving Loans in such Core Currency, as reported by
such Lender to the Administrative Agent and the Parent, (ii) as
to the Swing Line Lender, with respect to Swing Line Loans in any
5<PAGE>
Core Currency, initially, the office, branch or affiliate of such
Lender designated as the Swing Line Lender's lending office for
such Swing Line Loans in such Core Currency on Exhibit R, and
thereafter, such other office, branch or affiliate of the Swing
Line Lender through which it shall be making or maintaining Swing
Line Loans in such Core Currency, as reported by the Swing Line
Lender to the Administrative Agent and the Parent, (iii) as to
any Lender, with respect to any Bid Loan, the lending office,
branch or affiliate of such Lender designated as such Lender's
lending office for such Bid Loan in its Bid for such Bid Loan,
(iv) as to any Lender, with respect to Individual Currency Loans
in any Non-Core Currency, initially, the office, branch or
affiliate of such Lender designated as such Lender's lending of-
fice for such Individual Currency Loans in such Non-Core Currency
on Exhibit R, and thereafter, such other office, branch or
affiliate of such Lender through which it shall be making or
maintaining Individual Currency Loans in such Non-Core Currency,
as reported by such Lender to the Administrative Agent and the
Parent, and (v) as to any Lender, with respect to any Negotiated
Rate Loan, the lending office, branch or affiliate of such Lender
designated as such Lender's lending office for such Negotiated
Loan in the Negotiated Rate Confirmation for such Negotiated Rate
Loan.
"Applicable Margin": (i) with respect to the unpaid
principal amount of ABR Advances, the applicable percentage set
forth below in the column entitled "Applicable Margin for ABR Ad-
vances" and (ii) with respect to the unpaid principal amount of
Eurodollar Advances, Core Currency Euro Advances and Individual
Currency Loans, the applicable percentage set forth below in the
column entitled "Applicable Margin for Eurodollar/Core Currency
Euro Advances/Individual Currency Loans":
<TABLE>
<CAPTION>
Applicable
Margin for
Eurodollar
Advances/Core
Applicable Currency Euro
Margin for Advances/
ABR Individual Currency
Pricing Level Advances Loans
----------------- -------------- --------------------
<S> <C> <C>
Pricing Level I 0% 0.2000%
Pricing Level II 0% 0.2700%
Pricing Level III 0% 0.2750%
Pricing Level IV 0% 0.4000%
Pricing Level V 0% 0.4000%
</TABLE>
6<PAGE>
"Applicable Payment Office": in the case of:
(i) the Administrative Agent, (x) in respect of all
Loans (other than Alternate Currency Loans),
Letters of Credit designated in Dollars, fees and
other amounts owing under this Agreement, the
office of the Administrative Agent listed in
Exhibit Q as its "Domestic Payment Office", and
(y) in respect of Alternate Currency Loans and
Letters of Credit designated in Alternate
Currencies, the office of the Administrative Agent
listed in Exhibit Q as its payment office for the
applicable Alternate Currency, or such other
office or offices as the Administrative Agent may
from time to time hereafter designate in writing
as such to the Parent, each Lender and each Bor-
rower;
(ii) the Swing Line Lender, in respect of each Swing
Line Loan, the office of the Swing Line Lender
listed in Exhibit R as the payment office for the
applicable Core Currency in which such Swing Line
Loan is made or such other office or offices as
the Swing Line Lender may from time to time
hereafter designate in writing as such to the
Administrative Agent, the Parent and each Swing
Line Borrower;
(iii) any other Lender, (w) in respect of each Revolving
Loan, the office of such Lender listed in
Exhibit R as its payment office for the applicable
Core Currency or such other office or offices as
such Lender may from time to time hereafter desig-
nate in writing as such to the Administrative
Agent, the Parent and each Borrower, (x) in
respect of each Individual Currency Loan, the of-
fice of such Lender listed in Exhibit R as its
payment office for the applicable Non-Core
Currency or such other office or offices as such
Lender may from time to time hereafter designate
in writing as such to the Administrative Agent,
the Parent and each Borrower, (y) in respect of
each Bid Loan, the office of such Lender listed in
such Lender's Bid for such Bid Loan, and (z) in
respect of each Negotiated Rate Loan, the office
of such Lender listed in the Negotiated Rate
Confirmation for such Negotiated Rate Loan; and
(iv) the Issuing Bank, in respect of each Letter of
Credit, the office of the Issuing Bank listed in
Exhibit R as the payment office for the applicable
Currency in which such Letter of Credit is issued
7<PAGE>
or such other office or offices as the Issuing
Bank may from time to time hereafter designate in
writing as such to the Administrative Agent and
the Parent.
"Assignment and Acceptance Agreement": an assignment
and acceptance agreement executed by an assignor and an assignee
pursuant to which the assignor assigns to the assignee all or any
portion of such assignor's Loans, Commitment, Individual Currency
Commitments and other rights and obligations under the Loan
Documents, substantially in the form of Exhibit D.
"Assignment Fee": as defined in Section 11.7(b).
"Australian Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Australia and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Australian Dollars": freely transferable lawful money
of Australia.
"Availability Percentage": with respect to any Lender
at any time, a percentage equal to a fraction (x) the numerator
of which is
(A) the Commitment of such Lender, minus
(B) the sum of (I) the aggregate principal amount of
all Revolving Loans then outstanding from such Lender (de-
termined on the basis of the Dollar Equivalent for each
outstanding Alternate Currency Revolving Loan), plus (II)
the aggregate principal amount of all Individual Currency
Loans then outstanding from such Lender (determined on the
basis of the Dollar Equivalent of each such Individual
Currency Loan), plus (III) the SL/LC Credit Exposure of such
Lender, and
(y) the denominator of which is
(A) the Aggregate Commitments, minus
(B) the sum of (I) the outstanding principal balance of
all Revolving Loans (determined on the basis of the Dollar
Equivalent for each outstanding Alternate Currency Revolving
Loan), plus (II) the outstanding principal balance of all
Individual Currency Loans (determined on the basis of the
Dollar Equivalent of each such Individual Currency Loan),
plus (III) the outstanding principal balance of all Swing
Line Loans, plus (IV) the Letter of Credit Exposure.
8<PAGE>
"Available Alternate Currency": each Alternate Currency
except to the extent that the Administrative Agent has given
notice to the Parent pursuant to Section 2.14(a) (which notice
has not been rescinded by the Administrative Agent) that one or
more Alternate Currencies are no longer available as determined
by it in its sole discretion.
"Benefited Lender": as defined in Section 11.9.
"Bid": an offer by a Lender to a Borrower, in the form
of Exhibit H, to make a Bid Loan.
"Bid Accept/Reject Letter": a notification made by the
applicable Borrower pursuant to Section 2.11 in the form of
Exhibit I.
"Bid Interest Period": as to any Bid Loan, the period
commencing on the date of such Bid Loan, and ending on the date
requested in the Bid Request with respect to such Bid Loan, which
shall not be earlier than 7 days after the date of such Bid Loan
or later than 180 days after the date of such Bid Loan; provided,
however, that (i) if any Bid Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day, unless such next succeeding
Business Day would be a date on or after the Maturity Date in
which case such Interest Period shall end on the next preceding
Business Day and (ii) no Borrower shall select a Bid Interest
Period which shall end after the Maturity Date.
"Bid Loan": each loan from a Lender to a Borrower
pursuant to Section 2.11.
"Bid Loan Confirmation": a confirmation by the Ad-
ministrative Agent to a Lender of the acceptance by the ap-
plicable Borrower of any Bid (or Portion thereof) made by such
Lender, substantially in the form of Exhibit J.
"Bid Rate": as defined in Section 2.11(b).
"Bid Request": a request by a Borrower, in the form of
Exhibit F, for Bids.
"Bid Submission Deadline": as defined in Section
2.11(b).
"BNY Rate": a rate of interest per annum equal to the
rate of interest publicly announced in New York City by BNY from
time to time as its prime commercial lending rate, such rate to
be adjusted automatically (without notice) on the effective date
of any change in such publicly announced rate.
"Borrower Addendum": an Addendum to this Agreement in
9<PAGE>
the form of Exhibit B pursuant to which a Subsidiary of the
Parent may become a Subsidiary Borrower pursuant to the provi-
sions of Section 2.23.
"Borrowers": collectively, Tiffany, Tiffany Inter-
national and the Subsidiary Borrowers; each a "Borrower".
"Borrowing Date": (i) in respect of Revolving Loans,
any Business Day on which the Lenders shall make Revolving Loans
to a Borrower pursuant to a Notice of Borrowing or pursuant to a
Mandatory Borrowing, (ii) in respect of Bid Loans, any Business
Day on which a Lender shall make a Bid Loan to a Borrower
pursuant to a Bid Request, (iii) in respect of Swing Line Loans,
any Business Day on which the Swing Line Lender shall make a
Swing Line Loan to a Swing Line Borrower pursuant to a Notice of
Borrowing, (iv) in respect of Negotiated Rate Loans, any Business
Day on which a Lender shall make a Negotiated Rate Loan to a
Borrower pursuant to a Negotiated Rate Confirmation, (v) in
respect of Individual Currency Loans, any Business Day on which a
Lender shall make an Individual Currency Loan to a Borrower
pursuant to a Notice of Borrowing, and (vi) in respect of Letters
of Credit, any Business Day on which the Issuing Bank issues a
Letter of Credit to a Letter of Credit Applicant pursuant to a
Letter of Credit Request.
"Borrowing/Issuance Period": as defined in Section
2.7(b)(ii).
"Business Day":
(i) for all purposes (other than as covered by clauses
(ii) and (iii) below), any day except Saturday, Sunday or a day
which in New York City is a legal holiday or a day on which
banking institutions are authorized or required by law or other
government action to close,
(ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, a
Eurodollar Advance, a Core Currency Euro Advance or an Alternate
Currency Swing Line Loan, any day which is a Business Day
described in clause (i) above, is a day for trading by and
between banks in the London interbank market and which is not a
legal holiday or a day on which banking institutions are au-
thorized or required by law or other government action to close
in the country in which the principal office of the applicable
Borrower is located, and
(iii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, an
Alternate Currency Bid Loan, an Alternate Currency Negotiated
Rate Loan, an Individual Currency Loan or a Letter of Credit
designated in an Alternate Currency, any day which is a Business
10<PAGE>
Day described in clause (i) above, is a day for trading by and
between banks in the London interbank market and which is not a
legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close
in the country in which (x) the principal office of the
applicable Borrower is located and (y) the Applicable Lending
Office and Applicable Payment Office of the applicable Lender is
located.
"Canadian Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Canada and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Canadian Dollars": freely transferable lawful money of
Canada.
"Change of Control": (i) any "Person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended from time to time, or any
successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect) is or shall become
the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
thereunder), directly or indirectly, of more than 50%, on a fully
diluted basis, of the voting and economic interests of the
Parent, or (ii) the Board of Directors of the Parent shall cease
to consist of a majority of Continuing Directors.
"Code": the Internal Revenue Code of 1986, as the same
may be amended from time to time, or any successor thereto, and
the rules and regulations issued thereunder, as from time to time
in effect.
"Commitment": with respect to each Lender, the amount
set forth opposite such Lender's name in Exhibit A-1 directly
below the column entitled "Commitment", as the same may be (x)
reduced from time to time pursuant to Section 2.9 or (y) adjusted
from time to time as a result of assignments to or from such
Lender pursuant to Section 11.7 or increases pursuant to Section
11.1.
"Commitment Percentage": as to any Lender, the per-
centage set forth opposite the name of such Lender in Exhibit A-1
under the heading "Commitment Percentage", as such percentage may
be (x) reduced from time to time pursuant to Section 2.9 or (y)
adjusted from time to time as a result of assignments to or from
such Lender of its Commitment pursuant to Section 11.7 or
increases in the Aggregate Commitments pursuant to Section 11.1.
"Commitment Period": the period from the Effective Date
until the Expiration Date.
11<PAGE>
"Compliance Certificate": a certificate in the form of
Exhibit M.
"Consolidated": the Parent and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Capitalization": as of any date, total
stockholder's equity of the Parent and its Subsidiaries on a
Consolidated basis on such date (without giving effect to foreign
currency translation adjustments, except to the extent such
adjustments are in excess of $10,000,000 (whether positive or
negative)) plus Total Debt on such date.
"Contingent Obligation": as to any Person (the "sec-
ondary obligor"), any obligation of such secondary obligor (a)
guaranteeing or in effect guaranteeing any return on any Invest-
ment made by another Person, or (b) guaranteeing or in effect
guaranteeing any Indebtedness, lease, dividend or other obli-
gation ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, includ-
ing any obligation of such secondary obligor, whether contingent,
(i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the
purpose of assuring the beneficiary of any such primary
obligation of the ability of the primary obligor to make payment
of such primary obligation, (iv) otherwise to assure or hold
harmless the beneficiary of such primary obligation against loss
in respect thereof, and (v) in respect of the Indebtedness of any
partnership in which such secondary obligor is a general partner,
except to the extent that such Indebtedness of such partnership
is nonrecourse to such secondary obligor and its separate
Property; provided, however, that the term "Contingent Obliga-
tion" shall not include (i) the indorsement of instruments for
deposit or collection in the ordinary course of business and (ii)
guaranties by the Parent or any Subsidiary of the Parent of the
primary obligations of any other Subsidiary of the Parent
incurred in the ordinary course of business of such other
Subsidiary; and provided, further, that the amount of any such
Contingent Obligation shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of such primary
obligation and (b) the maximum amount for which such secondary
obligor may be liable pursuant to the terms of the agreement
embodying such Contingent Obligation unless such primary
obligation and the maximum amount for which such secondary
obligor may be liable are not stated or determinable, in which
case the amount of such Contingent Obligation shall be such
secondary obligor's maximum reasonably anticipated liability in
12<PAGE>
respect thereof as determined by such secondary obligor in good
faith.
"Continuing Directors": the directors of the Parent on
the Effective Date and each other director, if such director's
nomination for election to the Board of Directors of the Parent
is recommended by a majority of the then Continuing Directors.
"Conversion Date": the date on which (i) a Eurodollar
Advance is converted to an ABR Advance, (ii) the date on which an
ABR Advance is converted to a Eurodollar Advance, (iii) the date
on which a Eurodollar Advance is converted to a new Eurodollar
Advance and (iv) the date on which a Core Currency Euro Advance
is converted to a new Core Currency Euro Advance.
"Core Currencies": Dollars, French Francs, German
Marks, Japanese Yen and Sterling Pounds (each, a "Core Cur-
rency"), and such other currencies as shall be requested by the
Parent to be a Core Currency hereunder subject to the approval of
all of the Lenders in their sole and absolute discretion.
"Core Currency Borrowers": with respect to Revolving
Loans, the Domestic Borrowers, the German Borrower, the French
Borrower, the Japanese Borrower and the Sterling Borrower; each a
"Core Currency Borrower".
"Core Currency Euro Advances": collectively, the Re-
volving Loans (or any portions thereof) at such time as they (or
such portions) are maintained and/or being maintained in a Core
Currency (other than Dollars) at a rate of interest based upon a
Core Currency Euro Rate; each a "Core Currency Euro Advance".
"Core Currency Euro Rate": with respect to each day
during each Interest Period applicable to any Core Currency Euro
Advance, a rate of interest per annum determined by dividing (and
then rounding to the nearest 1/16 of 1% or, if there is no
nearest 1/16 of 1%, then to the next higher 1/16 of 1%):
(a) (i) the rate per annum that appears on page
3740 or 3750 of the Dow Jones Telerate Screen (or any successor
page) for deposits of the applicable Core Currency with a matu-
rity comparable to such Interest Period, determined as of 11:00
A.M. (London time) (x) on the date which is two Business Days
prior to the commencement of such Interest Period, in the case of
a Core Currency (other than Sterling Pounds) and (y) on the date
of the commencement of such Interest Period, in the case of Ster-
ling Pounds or, if such rate does not appear on page 3740 or 3750
of the Dow Jones Telerate Screen (or any successor page) or (ii)
the rate per annum equal to the offered quotation notified to the
Administrative Agent by the Reference Lender as the offered
quotation by first class banks in the London interbank market to
the Reference Lender for such Core Currency deposits of amounts
13<PAGE>
in immediately available funds comparable to the principal amount
of such Core Currency Euro Advance of the Reference Lender with a
maturity comparable to such Interest Period determined as of
11:00 A.M. (London time) (x) on the date which is two Business
Days prior to the commencement of such Interest Period, in the
case of a Core Currency (other than Sterling Pounds) and (y) on
the date of the commencement of such Interest Period, in the case
of Sterling Pounds, by
(b) a number equal to 1.00 minus the aggregate of
the stated maximum rates in effect on such day (without
duplication) of all reserve requirements (including marginal,
emergency, supplemental and special reserves) and similar
charges, expressed as a decimal, established by any Governmental
Authority, including those established by the Board of Governors
of the Federal Reserve System and any other banking authority to
which BNY and other major United States money center banks are
subject in respect of eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System) maintained by a member
of the Federal Reserve System with deposits exceeding $1 billion
in respect of eurodollar currency funding liabilities, to the
extent Applicable;
provided, in the event that the Administrative Agent has made any
determination pursuant to Section 2.14(a)(i) in respect of such
Core Currency Euro Advance, the Core Currency Euro Rate
determined pursuant to clause (a) of this definition shall
instead be the rate reported to the Administrative Agent by the
Reference Lender as the rate based on the all-in cost of funds of
the Reference Lender to fund such Core Currency Euro Advance with
a maturity comparable to such Interest Period.
"Credit Exposure": with respect to any Lender at any
time, the sum of (i) the outstanding principal balance of all
Loans (other than Swing Line Loans) then outstanding from such
Lender (determined on the basis of the Dollar Equivalent for each
outstanding Alternate Currency Loan), plus (ii) the SL/LC Credit
Exposure of such Lender at such time.
"Credit Party": with respect to any Loan Document, any
Person (other than the Administrative Agent, the Issuing Bank,
the Swing Line Lender or any Lender) which, in accordance with
the terms of such Loan Document, is or is to be a party thereto.
"Currency": any Core Currency or Non-Core Currency.
"Default": any of the events specified in Section 9.1,
whether or not any requirement for the giving of notice, the
lapse of time, or any other condition, has been satisfied.
"Disposition": with respect to any Person, any sale,
14<PAGE>
assignment, transfer or other disposition by such Person, by any
means, of
(a) the Stock of, or other equity interests of, any other
Person,
(b) any business, operating entity, division or segment
thereof, or
(c) any other Property of such Person, other than sales of
inventory (other than in connection with bulk
transfers).
"Dollar Bid Loan": a Bid Loan denominated in Dollars.
"Dollar Equivalent": on any date of determination
thereof, the amount of Dollars which could be purchased with the
amount of the relevant Alternate Currency involved in such
computation at the spot rate at which Dollars may be exchanged
into such Alternate Currency as set forth on such date on (i)
Reuters pages MGTY, MGTX, SCNY or BNMX or (ii) Dow Jones Telerate
pages 262, 264, 265, 266 or 9993 (or any successor pages) or, if
such rate does not appear on such pages, at the spot exchange
rate therefor as determined by the Administrative Agent as of
11:00 A.M. (London time) on such date of determination thereof
for delivery (x) in the case of an exchange of Dollars into Cana-
dian Dollars, one Business Day later and (y) in all other cases,
two Business Days later. In the event that, on any date of
determination, a spot rate for an individual Alternate Currency
appears on both a page of Reuters set forth above and a page of
Dow Jones Telerate set forth above, the Dollar Equivalent of such
Alternate Currency shall be the arithmetic mean of such spot
rates.
"Dollar Loan": each Dollar Revolving Loan, Dollar Bid
Loan, Dollar Negotiated Rate Loan and Dollar Swing Line Loan.
"Dollar Negotiated Rate Loan": a Negotiated Rate Loan
denominated in Dollars.
"Dollar Reimbursement Amount": as defined in Section
2.19(d).
"Dollar Revolving Loan" and "Dollar Revolving Loans":
as defined in Section 2.1(b).
"Dollar Swing Line Loan" and "Dollar Swing Line Loans":
as defined in Section 2.1(c).
"Dollars": and "$": freely transferable lawful money of
the United States.
15<PAGE>
"Domestic Borrowers": Tiffany, Tiffany International
and each other Borrower which is a corporation organized under
the laws of the United States or any State thereof and which has
its principal place of business in the United States; each a
"Domestic Borrower".
"EBIT": for any period, the net income of the Parent
and its Subsidiaries on a Consolidated basis for such period plus
each of the following with respect to the Parent and its
Subsidiaries on a Consolidated basis to the extent utilized in
determining such net income: (a) Interest Expense and (b) provi-
sion for taxes.
"Effective Date": June 30, 1995.
"Employee Benefit Plan": an employee benefit plan
within the meaning of Section 3(3) of ERISA maintained, sponsored
or contributed to by the Parent, any of its Subsidiaries or any
ERISA Affiliate.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor thereto, and
the rules and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate": when used with respect to an Em-
ployee Benefit Plan, ERISA, the PBGC or a provision of the Code
pertaining to employee benefit plans, any Person that is a member
of any group of organizations within the meaning of Sections
414(b) or (c) of the Code or, solely with respect to applicable
provisions of the Code, Sections 414(m) or (o) of the Code, of
which the Parent or any of its Subsidiaries is a member.
"Euro Interest Period": with respect to any Eurodollar
Advance or Core Currency Euro Advance requested by any Borrower,
the period commencing on, as the case may be, the Borrowing Date
or Conversion Date with respect to such Advance and ending one,
two, three or six months thereafter, as selected by such Borrower
in its irrevocable Notice of Borrowing or its irrevocable Notice
of Conversion, provided, however, that (i) if any Euro Interest
Period would otherwise end on a day which is not a Business Day,
such Euro Interest Period shall be extended to the next suc-
ceeding Business Day unless the result of such extension would be
to carry such Euro Interest Period into another calendar month,
in which event such Euro Interest Period shall end on the im-
mediately preceding Business Day, (ii) any Euro 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 Euro Interest Period) shall end
on the last Business Day of a calendar month, and (iii) no Bor-
rower shall select a Euro Interest Period which shall end after
the Maturity Date.
16<PAGE>
"Eurodollar Advances": collectively, the Revolving
Loans (or any portions thereof) at such time as they (or such
portions) are made and/or being maintained at a rate of interest
based upon a Eurodollar Rate; each a "Eurodollar Advance".
"Eurodollar Rate": with respect to each day during
each Interest Period applicable to any Eurodollar Advance, a rate
of interest per annum determined by dividing (and then rounding
to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
then to the next higher 1/16 of 1%):
(a) the rate per annum equal to the rate notified
to the Administrative Agent by the Reference Lender as the rate
at which the Reference Lender is offered Dollar deposits in the
New York interbank market, for delivery on the first day of such
Interest Period, in an amount equal approximately to such Euro-
dollar Advance for a period equal to such Interest Period, as
quoted at approximately 11:00 A.M. two Business Days prior to the
first day of such Interest Period, by
(b) a number equal to 1.00 minus the aggregate of
the stated maximum rates in effect on such day (without
duplication) of all reserve requirements (including marginal,
emergency, supplemental and special reserves), expressed as a
decimal, established by the Board of Governors of the Federal
Reserve System and any other banking authority to which BNY and
other major United States money center banks are subject, in
respect of eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System) maintained by a member
of the Federal Reserve System with deposits exceeding $1 billion
in respect of eurodollar currency funding liabilities.
"Event of Default": any of the events specified in
Section 9.1, provided that any requirement for the giving of no-
tice, the lapse of time, or any other condition has been satis-
fied.
"Excess Tax": as defined in Section 2.13(g).
"Expiration Date": the Business Day immediately pre-
ceding the Maturity Date.
"Facility Fee": as defined in Section 3.1.
"Federal Funds Rate": for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the
next higher 1/100 of 1%), equal to the weighted average of the
rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if the
17<PAGE>
day for which such rate is to be determined is not a Business
Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such
rate is not so published for any day which is a Business Day, the
Federal Funds Rate for such day shall be the average of the three
rates quoted by federal funds brokers to BNY on such day on such
transactions received by BNY as determined by BNY and reported to
the Administrative Agent.
"Financial Officer": the chief financial officer, the
treasurer or the assistant treasurer of the Parent or such other
officer thereof as shall be reasonably satisfactory to the
Administrative Agent.
"Financial Statements": as defined in Section 4.15.
"Fixed Rate Loan": a Eurodollar Advance, a Core Cur-
rency Euro Advance, a Swing Line Negotiated Rate Advance, a Ne-
gotiated Rate Loan, an Individual Currency Loan or a Bid Loan.
"Foreign Pension Plan": any plan, fund (including any
superannuation fund) or other similar program established or
maintained outside of the United States by the Parent or any one
or more of its Subsidiaries primarily for the benefit of
employees of the Parent or such Subsidiaries residing outside of
the United States, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA
or the Code.
"French Borrower": one or more of the following:
Tiffany, Tiffany International or Societe Francaise Pour Le
Developpement De La Porcelaine D'Art (S.A.R.L.), a corporation
organized under the laws of France and whose principal office is
located in France.
"French Francs": freely transferable lawful money of
France.
"Funded Current Liability Percentage": as defined in
Section 401(a)(29) of the Code.
"GAAP": generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and in the statements and pronouncements of the Fi-
nancial Accounting Standards Board or in such other statement by
such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the
circumstances as of the date of determination. If at any time
18<PAGE>
after the Effective Date any change in GAAP would affect the
computation of any financial ratio or requirement set forth in
any Loan Document, and either the Required Lenders, the Parent or
the appropriate Borrowers shall so request, the Administrative
Agent, the Lenders, the Parent and such Borrowers shall negotiate
in good faith to amend such ratio or requirement to reflect such
change in GAAP (subject to the approval of the Required Lenders),
provided that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to
such change therein and (ii) the Parent and such Borrowers shall
provide to the Administrative Agent and the Lenders financial
statements and other documents required under the Loan Documents
or as reasonably requested thereunder setting forth a
reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.
"German Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Germany and which shall become a Borrower
pursuant to Section 2.23 hereof.
"German Marks": freely transferable lawful money of
Germany.
"Governmental Authority": any foreign, federal, state,
municipal or other government, or any department, commission,
board, bureau, agency, public authority, instrumentality or other
political subdivision thereof, any central bank, or any court or
arbitrator.
"Guaranty": as defined in Section 5.2.
"Hong Kong Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co. of New York
Limited, a corporation organized under the laws of Hong Kong and
whose principal office is located in Hong Kong.
"Hong Kong Dollars": freely transferable lawful money
of Hong Kong.
"Indebtedness": as to any Person, at a particular
time, all items of such Person which constitute, without duplica-
tion, (a) indebtedness for borrowed money or the deferred pur-
chase price of Property (other than trade payables and accrued
expenses incurred in the ordinary course of business), (b)
indebtedness evidenced by notes, bonds, debentures or similar
instruments, (c) obligations with respect to any conditional sale
or other title retention agreement, (d) indebtedness arising
under acceptance facilities and the amount available to be drawn
under all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder to the
19<PAGE>
extent such Person shall not have reimbursed the issuer in
respect of the issuer's payment of such drafts, (e) liabilities
secured by any Lien on any Property owned by such Person even
though such Person shall not have assumed or otherwise become
liable for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like
non-consensual Liens arising in the ordinary course of busi-
ness), (f) that portion of any obligation of such Person, as
lessee, which in accordance with GAAP is required to be
capitalized on the balance sheet of such Person, and (g) Con-
tingent Obligations.
"Indemnified Person": as defined in Section 11.10.
"Indemnified Tax": as to any Person, any Tax, except
(i) a Tax on the Income imposed on such Person and (ii) any
interest, fees or penalties for late payment imposed on such
Person, in each case under clauses (i) and (ii) to the extent not
attributable to the failure of the Parent or any of its
Subsidiaries to obtain any necessary approvals or consents of, or
file or cause to be filed any reports, applications, documents,
instruments or information required to be filed pursuant to any
applicable law, rule, regulation or request of, any Governmental
Authority.
"Indemnified Tax Person": the Administrative Agent,
the Swing Line Lender, the Issuing Bank, or any Lender.
"Individual Currency Commitment": with respect to each
Lender and any Non-Core Currency, the amount set forth opposite
such Lender's name in Exhibit A-2 directly below the column en-
titled "Individual Currency Commitment" in respect of such Non-
Core Currency (determined on the basis of the Dollar Equivalent
for such Non-Core Currency), as the same may be (x) reduced from
time to time pursuant to Section 2.9 or (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant
to Section 11.7, provided, however, that the aggregate amount of
all of the Individual Currency Commitments of each Lender
(determined on the basis of the Dollar Equivalent for each
applicable Non-Core Currency) shall not exceed the amount of such
Lender's Commitment.
"Individual Currency Interest Period": with respect to
any Individual Currency Loan requested by any Non-Core Currency
Borrower, the period commencing on the Borrowing Date with re-
spect to such Individual Currency Loan and ending one, two or
three months thereafter, as selected by such Non-Core Currency
Borrower in its irrevocable Notice of Borrowing, provided, how-
ever, that (i) if any Individual Currency Interest Period would
otherwise end on a day which is not a Business Day, such
Individual Currency Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would
20<PAGE>
be to carry such Individual Currency Interest Period into another
calendar month, in which event such Individual Currency Interest
Period shall end on the immediately preceding Business Day, (ii)
any Individual Currency 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 Individual Currency Interest Period) shall end on the
last Business Day of a calendar month, and (iii) no Borrower
shall select an Individual Currency Interest Period which shall
end after the Maturity Date.
"Individual Currency Loan" and "Individual Currency
Loans": as defined in Section 2.1(e).
"Individual Currency Rate": with respect to each day
during each Interest Period applicable to any Individual Currency
Loan, a rate of interest per annum determined by dividing (and
then rounding to the nearest 1/16 of 1% or, if there is no
nearest 1/16 of 1%, then to the next higher 1/16 of 1%):
(a) (i) if such Individual Currency Loan is
designated in Australian Dollars, Canadian Dollars, Hong Kong
Dollars, Italian Lira, Singaporean Dollars or Swiss Francs,
(A) with respect to Australian Dollars, the
average bid rate for bank bills of exchange that
appears on page BBSY on the Reuters Screen (Sydney) (or
any successor page) for a term equivalent to such
Interest Period, determined as of approximately 10:15
A.M. (Sydney time) on the first day of such Interest
Period,
(B) with respect to Canadian Dollars, the rate
per annum that appears on page CDOR on the Reuters
Screen (Toronto) (or any successor page) for deposits
of Canadian Dollars with a maturity comparable to such
Interest Period, determined as of approximately 11:00
A.M. (Toronto time) on the date which is two Business
Days prior to the commencement of such Interest Period,
(C) with respect to Italian Lira, the rate per
annum that appears on page RIBO (London) on the Reuters
Screen (or any successor page) for deposits of Italian
Lira with a maturity comparable to such Interest
Period, determined as of approximately 11:00 A.M.
(London time) on the date which is two Business Days
prior to the commencement of such Interest Period,
(D) with respect to Swiss Francs, the rate per
annum that appears on page 3740 or 3750 of the Dow
Jones Telerate Screen (or any successor page) for
deposits of Swiss Francs with a maturity comparable to
21<PAGE>
such Interest Period, determined as of approximately
11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such
Interest Period,
(E) with respect to Hong Kong Dollars, the rate
per annum that appears on page FWEN on the Reuters
Screen (Hong Kong) (or any successor page) for deposits
of Hong Kong Dollars with a maturity comparable to such
Interest Period, determined as of approximately 11:00
A.M. (Hong Kong time) on the date which is two Business
Days prior to the commencement of such Interest Period,
(F) with respect to Singaporean Dollars, the rate
per annum that appears on page FWEO of the Reuters
Screen (Singapore) (or any successor page) for deposits
of Singaporean Dollars with a maturity comparable to
such Interest Period, determined as of approximately
11:00 A.M. (Singapore time), on the date which is two
Business Days prior to the commencement of such
Interest Period, or
(G) if such rate does not appear on such
applicable page of the Dow Jones Telerate Screen or
Reuters Screen (or any successor page), the rate per
annum equal to the offered quotation by first class
banks in the London, Australian, Canadian, Hong Kong or
Singapore, as the case may be, interbank market to the
applicable Lender for such Non-Core Currency deposits
of amounts in immediately available funds comparable to
the principal amount of such Individual Currency Loan
with a maturity comparable to such Interest Period de-
termined as of approximately 11:00 A.M. (London,
Sydney, Toronto, Hong Kong or Singapore, as the case
may be, time) on the date which is two Business Days
prior to the commencement of such Interest Period or,
in the case of Individual Currency Loans designated in
Australian Dollars, on the first day of such Interest
Period,
(ii) if such Individual Currency Loan is designated in any other
Non-Core Currency, a rate per annum equal to the offered quo-
tation by first class banks in the applicable interbank market to
the applicable Lender for deposits of such Non-Core Currency in
amounts in immediately available funds comparable to the prin-
cipal amount of such Individual Currency Loan with a maturity
comparable to such Interest Period as determined by such Lender
on the date which is two Business Days prior to the commencement
of such Interest Period, adjusted for additional costs and local
market conditions as determined by such Lender, by
(b) a number equal to 1.00 minus the aggregate of
22<PAGE>
the stated maximum rates in effect on such day (without
duplication) of all reserve requirements (including marginal,
emergency, supplemental and special reserves) and similar
charges, expressed as a decimal, established by any Governmental
Authority, including those established by the Board of Governors
of the Federal Reserve System and any other banking authority to
which BNY and other major United States money center banks are
subject in respect of eurocurrency funding (currently referred to
as "Eurocurrency liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System) maintained by a member
of the Federal Reserve System with deposits exceeding $1 billion
in respect of eurodollar currency funding liabilities, to the
extent Applicable;
provided, in the event that the applicable Lender has made any
determination pursuant to Section 2.14(a)(iv) in respect of such
Individual Currency Loan, the Individual Currency Rate determined
pursuant to clause (a) of this definition shall instead be the
rate based on the all-in cost of funds of the applicable Lender
to fund such Individual Currency Loan with a maturity comparable
to such Interest Period.
"Intellectual Property": all United States registered
trademarks, service marks, patents, and trade names.
"Intercompany Acquisition": an Acquisition by the
Parent from any of its Subsidiaries or an Acquisition by any
Subsidiary of the Parent from any other Subsidiary of the Parent.
"Intercompany Debt": (i) Indebtedness of the Parent to
one or more of the Subsidiaries of the Parent and (ii) demand
Indebtedness of one or more of the Subsidiaries of the Parent to
the Parent or any one or more of the other Subsidiaries of the
Parent.
"Intercompany Disposition": a Disposition by the Parent
or any of its Subsidiaries to the Parent or any of its other
Subsidiaries, provided that such Disposition does not materially
and adversely affect the interests of the Lenders under the Loan
Documents.
"Intercompany Lien": A Lien granted by the Parent or
any of its Subsidiaries to the Parent or any of its other
Subsidiaries, provided that such Lien does not materially and
adversely affect the interests of the Lenders under the Loan
Documents.
"Interest Coverage Ratio": as of any date, the ratio
of (a) EBIT in respect of the period comprised of the four con-
secutive fiscal quarters ended immediately prior to such date in
respect of which financial statements have been delivered
pursuant to Sections 7.7(a), 7.7(c) or 7.7(d) to (b) Interest
23<PAGE>
Expense for such period.
"Interest Expense": for any period, the interest
expense of the Parent and its Subsidiaries on a Consolidated
basis in respect of such period.
"Interest Period": a Euro Interest Period, a Swing Line
Interest Period, a Negotiated Rate Interest Period, an Individual
Currency Interest Period or a Bid Interest Period, as the case
may be.
"Interest Rate Protection Arrangement": any interest
rate swap, cap or collar arrangement or any other derivative
product, in each case designed to reduce exposure to interest
rate fluctuations.
"Investments": as defined in Section 8.7.
"Invitation to Bid": an invitation to make Bids in the
form of Exhibit G.
"Issuing Bank": BNY.
"Italian Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany-Faraone S.P.A., a
corporation organized under the laws of Italy and whose principal
office is located in Italy.
"Italian Lira": freely transferable lawful money of
Italy.
"Japanese Borrower": one or more of the following:
Tiffany, Tiffany International, Tiffany Japan or a wholly-owned
Subsidiary of the Parent which is organized under the laws of,
and has its principal office in, Japan and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Japanese Yen": freely transferable lawful money of
Japan.
"Judgment Currency": as defined in Section 11.14.
"Judgment Currency Conversion Date": as defined in
Section 11.14.
"Korean Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Korea and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Korean Won": freely transferable lawful money of
24<PAGE>
Korea.
"Lender": each financial institution listed on
Exhibit A-1, as well as any Person which becomes a "Lender"
hereunder pursuant to Sections 11.7 or 11.1; it being understood
and agreed, however, that for purposes of making certain
Alternate Currency Loans and issuing or participating in certain
Letters of Credit under this Agreement, certain of the Lenders
have specifically designated on Exhibit R certain of their
branches, subsidiaries or affiliates that will be responsible for
making such Alternate Currency Loans and issuing or participating
in such Letters of Credit, or may make such a designation in an
Assignment and Acceptance Agreement entered into by any such
Lender.
"Letter of Credit" and "Letters of Credit": as defined
in Section 2.19.
"Letter of Credit Applicants": collectively, Tiffany
and Tiffany International; each a "Letter of Credit Applicant".
"Letter of Credit Commissions": as defined in Section
3.2.
"Letter of Credit Commitment": (i) the commitment of
the Issuing Bank to issue Letters of Credit, provided that the
Letter of Credit Exposure shall not exceed $25,000,000 (deter-
mined on the basis of the Dollar Equivalent for each outstanding
Letter of Credit designated in an Alternate Currency), and (ii)
the commitment of the Lenders in respect of the Letter of Credit
Exposure as set forth in Section 2.20.
"Letter of Credit Exposure": at any date, the sum,
without duplication, of (i) the aggregate undrawn face amount
(determined on the basis of the Dollar Equivalent for each
outstanding Letter of Credit designated in an Alternate Currency)
of the outstanding Letters of Credit at such date and (ii) the
aggregate unpaid reimbursement obligations in respect of the
Letters of Credit at such date (after giving effect to any Loans
made on such date to pay any such reimbursement obligations and
determined on the basis of the Dollar Equivalent for each such
reimbursement obligation in respect of an outstanding Letter of
Credit designated in an Alternate Currency).
"Letter of Credit Request": a request in the form of
Exhibit L.
"Leverage Ratio": as of any date, the ratio of (a)
Total Debt on such date, to (b) Consolidated Capitalization as of
such date.
"Lien": any mortgage, pledge, assignment, lien,
25<PAGE>
charge, encumbrance or security interest of any kind, or the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan": each Revolving Loan, each Individual Currency
Loan, each Negotiated Rate Loan, each Bid Loan and each Swing
Line Loan.
"Loan Documents": this Agreement and the Guaranty.
"Malaysian Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Malaysia and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Malaysian Ringgit": freely transferable lawful money
of Malaysia.
"Mandatory Borrowing": as defined in Section 2.1(d).
"Margin Stock": any "margin stock", as said term is de-
fined in Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from
time to time.
"Material Adverse": with respect to any change or
effect, a material adverse change in, or effect on, as the case
may be, (i) the financial condition, operations, business, pros-
pects or Property of the Parent and its Subsidiaries taken as a
whole, (ii) the ability of the Parent or any Borrower to perform
its obligations under any Loan Document, or (iii) the ability of
the Administrative Agent, the Issuing Bank, the Swing Line Lender
or any Lender to enforce any Loan Document.
"Maturity Date": June 30, 2000, or such earlier date on
which the Loans shall become due and payable, whether by ac-
celeration or otherwise.
"Maximum Offer": as defined in Section 2.11(b).
"Maximum Request": as defined in Section 2.11(a).
"Mexican Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Mexico and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Mexican Pesos": freely transferable lawful money of
Mexico.
26<PAGE>
"Moody's": Moody's Investors Service, Inc.
"Multiemployer Plan": a Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": as defined in Section 2.12.
"Negotiated Rate Confirmation": as defined in Section
2.12.
"Negotiated Rate Confirmation Request": a request by a
Borrower and the Parent, in the form of Exhibit K, for con-
firmation by a Lender of such Lender's agreement to make a
Negotiated Rate Loan to such Borrower pursuant to Section 2.12.
"Negotiated Rate Interest Period": as to any Negotiated
Rate Loan, the period commencing on the date of such Negotiated
Rate Loan, and ending on the applicable date specified in the
Negotiated Rate Confirmation for such Negotiated Rate Loan, which
shall not be earlier than 7 days after the date of such
Negotiated Rate Loan or later than 180 days after the date of
such Negotiated Rate Loan; provided, however, that (i) if any
Negotiated Rate Interest Period would end on a day other than a
Business Day, such Negotiated Rate Interest Period shall be ex-
tended to the next succeeding Business Day, unless such next
succeeding Business Day would be a date on or after the Maturity
Date in which case such Negotiated Rate Interest Period shall end
on the next preceding Business Day and (ii) no Borrower shall
select a Negotiated Rate Interest Period which shall end after
the Maturity Date.
"Negotiated Rate Loan": each loan from a Lender to a
Borrower pursuant to Section 2.12.
"New Taiwan Dollars": freely transferable lawful money
of Taiwan.
"Non-Core Currencies": Australian Dollars, Canadian
Dollars, Hong Kong Dollars, Italian Lira, Korean Won, Malaysian
Ringgit, Mexican Pesos, New Taiwan Dollars, Philippine Pesos,
Singaporean Dollars, Swiss Francs and Thai Baht; each a "Non-Core
Currency".
"Non-Core Currency Borrowers": with respect to Indi-
vidual Currency Loans, the Australian Borrower, the Canadian
Borrower, the Hong Kong Borrower, the Italian Borrower, the
Korean Borrower, the Malaysian Borrower, the Mexican Borrower,
the Philippine Borrower, the Singaporean Borrower, the Swiss
Borrower, the Taiwanese Borrower and the Thai Borrower; each a
"Non-Core Currency Borrower".
"Non-Issuance Event": as defined in Section 2.19(a).
27<PAGE>
"Non-Swing Loan Event": as defined in Section 2.1(c).
"Notice of Borrowing": a request for Loans in the form
of Exhibit C signed by the Parent and the applicable Borrower.
"Notice of Conversion": a notice substantially in the
form of Exhibit E.
"Obligation Currency": as defined in Section 11.14.
"Other Hedging Arrangement": any foreign exchange
contract, currency swap arrangement, commodity arrangement or any
other similar arrangement, in each case designed to protect
against fluctuations of currency values.
"PBGC": the Pension Benefit Guaranty Corporation estab-
lished pursuant to Subtitle A of Title IV of ERISA, or any
Governmental Authority succeeding to the functions thereof.
"Pension Plan": at any time, any Employee Benefit Plan
(including a Multiemployer Plan) subject to Section 302 of ERISA
or Section 412 of the Code, the funding requirements of which
are, or at any time within the six years immediately preceding
the time in question, were in whole or in part, the responsi-
bility of the Parent, any of its Subsidiaries or an ERISA Affili-
ate.
"Person": any individual, firm, partnership, joint
venture, corporation, association, business enterprise, limited
liability company, joint stock company, unincorporated
association, trust, Governmental Authority or any other entity,
whether acting in an individual capacity, and for the purpose of
the definition of "ERISA Affiliate", a trade or business.
"Philippine Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, the Philippines and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Philippine Pesos": freely transferable lawful money of
the Philippines.
"Portion": as defined in Section 2.11(b).
"Pricing Level": any of Pricing Level I, Pricing Level
II, Pricing Level III, Pricing Level IV, or Pricing Level V.
"Pricing Level I": any time when the senior unsecured
long term debt Rating of the Parent by (x) S&P is A- or higher or
(y) Moody's is A3 or higher.
28<PAGE>
"Pricing Level II": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is BBB+
or higher or (y) Moody's is Baa1 or higher and (ii) Pricing Level
I does not apply.
"Pricing Level III": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is BBB
or higher or (y) Moody's is Baa2 or higher and (ii) neither
Pricing Level I nor Pricing Level II applies.
"Pricing Level IV": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is BBB-
or higher or (y) Moody's is Baa3 or higher and (ii) none of
Pricing Level I, Pricing Level II or Pricing Level III applies.
"Pricing Level V": any time when (i) the senior un-
secured long term debt Rating of the Parent by (x) S&P is BB+ or
lower or (y) Moody's is Ba1 or lower and (ii) none of Pricing
Level I, Pricing Level II, Pricing Level III or Pricing Level IV
applies.
"Prohibited Transaction": with respect to any Pension
Plan, (a) any event set forth in Sections 4043(b) (other than a
Reportable Event as to which the 30 day notice requirement is
waived by the PBGC under applicable regulations), 4062(e) or
4063(a) of ERISA or the regulations thereunder, (b) an event
requiring the Parent, any of its Subsidiaries or any ERISA Af-
filiate to provide security to a Pension Plan under Section
401(a)(29) of the Code, or (c) failure to make any payment
required by Section 412(m) of the Code.
"Property": in respect of any Person, all types of
real, personal, tangible, intangible or mixed property and all
types of tangible or intangible property owned or leased by such
Person.
"Proportionate Share": as to any Subsidiary Borrower
(a) if such cost, expense or other amount is directly
attributable to the Loans made to such Subsidiary Borrower or any
action taken or omitted to be taken by such Subsidiary Borrower,
100% of such amount and (b) if such cost, expense or other amount
is not directly attributable to one or more specific Borrowers,
such amount multiplied by (i) if Loans are outstanding, the
percentage equivalent of a fraction the numerator of which is the
principal amount of Loans outstanding to such Subsidiary Borrower
and the denominator of which is the aggregate amount of Loans
outstanding to all Borrowers and (ii) if no Loans are
outstanding, the percentage equivalent of a fraction the
numerator of which is one and the denominator of which is the
number of Borrowers.
"Proposed Lender": as defined in Section 11.1(b).
29<PAGE>
"Quarterly Payment Date": each January 31, April 30,
July 31 and October 31 of each year.
"Rating": the actual, or if no actual then the implied,
senior unsecured long term debt rating of the Parent, in either
case as assigned by S&P or Moody's, as the case may be.
"Reference Lender": BNY.
"Regulation D": Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and
any successor to all or a portion thereof establishing reserve
requirements.
"Reportable Event": with respect to any Pension Plan,
(a) any event set forth in Sections 4043(c) (other than a Re-
portable Event as to which the 30 day notice requirement is
waived by the PBGC under applicable regulations), 4062(e) or
4063(a) of ERISA or the regulations thereunder, (b) an event
requiring the Parent, any of its Subsidiaries or any ERISA Af-
filiate to provide security to a Pension Plan under Section
401(a)(29) of the Code, or (c) failure to make any payment
required by Section 412(m) of the Code.
"Required Lenders": (i) at any time when no Loans are
outstanding, Lenders having Commitments or, if no Commitments
then exist, Lenders having Commitments on the last day on which
Commitments did exist, equal to at least 60% of the Aggregate
Commitments, and (ii) at any time when Loans are outstanding (x)
if the Commitments then exist, Lenders having Commitments equal
to at least 60% of the Aggregate Commitments, and (y) if the
Commitments have been terminated or otherwise no longer exist,
Lenders having Credit Exposures equal to at least 60% of the
Aggregate Credit Exposure.
"Required Payment": as defined in Section 2.13(a).
"Responsible Officer": the president, the chief
financial officer, the treasurer or the assistant treasurer of
the Parent, Tiffany or Tiffany International.
"Restricted Payment": with respect to any Person, any
of the following, whether direct or indirect: (a) the declaration
or payment by such Person of any dividend or distribution on any
class of Stock of such Person, other than a dividend payable
solely in shares of that class of Stock to the holders of such
class, (b) the declaration or payment by such Person of any
distribution on any other type or class of equity interest or
equity investment in such Person, and (c) any redemption, retire-
ment, purchase or acquisition of, or sinking fund or other
similar payment in respect of, any class of Stock of, or other
type or class of equity interest or equity investment in, such
30<PAGE>
Person.
"Revolving Loan" and "Revolving Loans": as defined in
Section 2.1(a).
"S&P": Standard & Poor's Ratings Group.
"SEC": the Securities and Exchange Commission or any
Governmental Authority succeeding to the functions thereof.
"Singaporean Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co. Pte. Ltd., a cor-
poration organized under the laws of Singapore and whose princi-
pal office is located in Singapore.
"Singaporean Dollars": freely transferable lawful money
of Singapore.
"SL/LC Credit Exposure": with respect to any Lender at
any time, (i) the sum of (A) the outstanding principal balance of
all Swing Line Loans (determined on the basis of the Dollar
Equivalent for each Alternate Currency Swing Line Loan), plus (B)
the Letter of Credit Exposure, multiplied by (ii) the
Availability Percentage of such Lender.
"Special Counsel": Emmet, Marvin & Martin, LLP, special
counsel to the Administrative Agent.
"Sterling Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co., a corporation
organized under the laws of the United Kingdom and whose
principal office is located in the United Kingdom.
"Sterling Pounds": freely transferable lawful money of
the United Kingdom.
"Stock": any and all shares, rights, interests, par-
ticipations, warrants, options, rights of conversion or other
equivalents (however designated) of corporate stock.
"Subsidiary": with respect to any Person at any time
and from time to time, any corporation, association, partnership,
limited liability company, joint venture or other business entity
of which such Person and/or any Subsidiary of such Person,
directly or indirectly at such time, either (a) in respect of a
corporation, owns or controls more than 50% of the outstanding
Stock having ordinary voting power to elect a majority of the
board of directors or similar managing body, irrespective of
whether a class or classes shall or might have voting power by
reason of the happening of any contingency, or (b) in respect of
an association, partnership, limited liability company, joint
venture or other business entity, is entitled to share in more
31<PAGE>
than 50% of the profits and losses, however determined.
"Subsidiary Borrowers": collectively, the Domestic
Borrowers (other than Tiffany and Tiffany International), the
Australian Borrower, the Canadian Borrower, the French Borrower,
the German Borrower, the Hong Kong Borrower, the Italian
Borrower, the Japanese Borrower, the Korean Borrower, the
Malaysian Borrower, the Mexican Borrower, the Philippine Bor-
rower, the Singaporean Borrower, the Sterling Borrower, the Swiss
Borrower, the Taiwanese Borrower and the Thai Borrower which are
signatories hereto on the Effective Date, and each other wholly-
owned Subsidiary of the Parent which becomes a party to this
Agreement by the execution of a Borrower Addendum pursuant to
Section 2.23; each a "Subsidiary Borrower".
"Swing Line Borrowers": with respect to Swing Line
Loans, the Domestic Borrowers, the French Borrower, the German
Borrower, the Japanese Borrower and the Sterling Borrower; each a
"Swing Line Borrower".
"Swing Line Commitment": an amount equal to
$15,000,000, as the same may be reduced from time to time pur-
suant to Section 2.9.
"Swing Line Commitment Period": the period from the
Effective Date to, but excluding, the Swing Line Termination
Date.
"Swing Line Interest Period": (i) as to any Swing Line
Negotiated Rate Advance, the period commencing on the date of
such Swing Line Negotiated Rate Advance and ending on the date
agreed to between the Parent, the applicable Swing Line Borrower
and the Swing Line Lender with respect to such Swing Line
Negotiated Rate Advance, and (ii) as to any Swing Line Loan made
as an ABR Advance, the period commencing on the date of such ABR
Advance and ending on the date set forth by the Parent and the
applicable Swing Line Borrower in the Notice of Borrowing with
respect to such ABR Advance; provided, however, that the last day
of any Swing Line Interest Period shall not be earlier than one
day after the date of such Swing Line Negotiated Rate Advance or
ABR Advance, as the case may be, or later than 30 days after the
date of such Swing Line Negotiated Rate Advance or ABR Advance,
as the case may be, and in no event later than 30 days prior to
the Expiration Date; and provided further, however, that if any
Swing Line Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day.
"Swing Line Lender": BNY.
"Swing Line Loan" and "Swing Line Loans": as defined in
Section 2.1(c).
32<PAGE>
"Swing Line Negotiated Rate": with respect to any Swing
Line Interest Period applicable to any Swing Line Negotiated Rate
Advance, the rate of interest per annum agreed to by the Parent,
the applicable Swing Line Borrower, and the Swing Line Lender
with respect thereto in accordance with Section 2.3(b).
"Swing Line Negotiated Rate Advances": collectively,
the Swing Line Loans (or any portions thereof) at such time as
they (or such portions) are made and/or being maintained at a
rate of interest based on a Swing Line Negotiated Rate; each a
"Swing Line Negotiated Rate Advance".
"Swing Line Termination Date": the date which is 30
days prior to the Expiration Date.
"Swiss Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co. Watch Factory
S.A., a corporation organized under the laws of Switzerland and
whose principal office is located in Switzerland.
"Swiss Francs": freely transferable lawful money of
Switzerland.
"Taiwanese Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Taiwan and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Tax": any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever
called, by a Governmental Authority, on whomsoever and wherever
imposed, levied, collected, withheld or assessed.
"Tax on the Income": as to any Person, a Tax imposed by
one of the following jurisdictions or by any political
subdivision or taxing authority thereof: (i) the United States,
(ii) the jurisdiction in which such Person is organized,
(iii) the jurisdiction in which such Person's principal office is
located, or (iv) in the case of each Lender or Swingline Lender,
any jurisdiction in which such Person is deemed to be doing
business; which Tax is an income tax or franchise tax imposed on
all or part of the net income or net profits of such Person or
which Tax represents interest, fees, or penalties for late
payment of such an income tax or franchise tax.
"Termination Event": with respect to any Pension Plan,
(a) a Reportable Event, (b) the termination of a Pension Plan
under Section 4041(c) of ERISA, or the filing of a notice of
intent to terminate a Pension Plan under Section 4041(c) of
ERISA, or the treatment of a Pension Plan amendment as a termi-
nation under Section 4041(e) of ERISA, (c) the institution of
33<PAGE>
proceedings by the PBGC to terminate a Pension Plan under Section
4042 of ERISA, or (d) the appointment of a trustee to administer
any Pension Plan under Section 4042 of ERISA.
"Thai Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary of
the Parent which is organized under the laws of, and has its
principal office in, Thailand and which shall become a Borrower
pursuant to Section 2.23 hereof.
"Thai Baht": freely transferable lawful money of
Thailand.
"Tiffany Japan": Tiffany & Co. Japan Inc., a Delaware
corporation.
"Total Debt": as of any date, all Indebtedness of the
Parent and its Subsidiaries on a Consolidated basis on such date.
"Unfunded Pension Liabilities": with respect to any
Pension Plan (other than a Multiemployer Plan), as of the last
day of the fiscal year of such Pension Plan preceding the time in
question, the amount determined by taking the accumulated benefit
obligation, as disclosed in accordance with Statement of
Accounting Standards No. 87, "Employers' Accounting for
Pensions", over the fair market value of Pension Plan assets.
"United States": the United States of America (in-
cluding the States thereof and the District of Columbia).
"Upstream Dividends": as defined in Section 8.9.
"Unrecognized Retiree Welfare Liability": with respect
to any Employee Benefit Plan that provides postretirement ben-
efits other than pension benefits, the amount of the transition
obligation, as determined in accordance with Statement of
Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," as of the most
recent valuation date, that has not been recognized as an expense
in the income statement of the Parent and its Consolidated
Subsidiaries, provided that (i) prior to the date such Statement
is applicable to the Parent, such amount shall be based on an
estimate made in good faith of the transition obligation, and
(ii) for purposes of determining the aggregate amount of the
Unrecognized Retiree Welfare Liability, Plans maintained by a
Consolidated Subsidiary of the Parent that is not otherwise an
ERISA Affiliate shall be included.
B. Principles of Construction
(a) All capitalized terms defined in this Agreement
shall have the meanings given such capitalized terms herein when
34<PAGE>
used in the other Loan Documents or any certificate, opinion or
other document made or delivered pursuant hereto or thereto,
unless otherwise expressly provided therein.
(b) As used in the Loan Documents and in any cer-
tificate, opinion or other document made or delivered pursuant
thereto, accounting terms not defined in Section 1.1, and ac-
counting terms partly defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under
GAAP. Unless otherwise expressly provided herein, the word
"fiscal" when used herein shall refer to the relevant fiscal
period of the Parent.
(c) The words "hereof", "herein", "hereto" and "here-
under" and similar words when used in each Loan Document shall
refer to such Loan Document as a whole and not to any particular
provision of such Loan Document, and Section, schedule and
exhibit references contained therein shall refer to Sections
thereof or schedules or exhibits thereto unless otherwise ex-
pressly provided therein.
(d) All references herein to a time of day shall mean
the then applicable time in New York, New York, unless otherwise
expressly provided herein.
(e) Section headings have been inserted herein and in
the other Loan Documents for convenience only and shall not be
construed to be a part hereof or thereof. Unless the context
otherwise requires, words in the singular number include the
plural, and words in the plural include the singular.
(f) Whenever in any Loan Document or in any cer-
tificate or other document made or delivered pursuant thereto,
the terms thereof require that a Person sign or execute the same
or refer to the same as having been so signed or executed, such
terms shall mean that the same shall be, or was, duly signed or
executed by (i) in respect of any Person that is a corporation,
any duly authorized officer thereof, and (ii) in respect of any
other Person (other than an individual), any analogous
counterpart thereof.
(g) The words "include" and "including", when used in
each Loan Document, shall mean that the same shall be included
"without limitation", unless otherwise specifically provided.
II. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT
A. Loans
(a) Subject to the terms and conditions hereof, each
Lender severally agrees from time to time during the Commitment
35<PAGE>
Period to make revolving credit loans to one or more of the Core
Currency Borrowers in the respective Applicable Currencies (each
a "Revolving Loan" and, as the context may require, collectively
with all other Revolving Loans of such Lender and with the
Revolving Loans of all other Lenders, the "Revolving Loans"),
provided, however, that immediately after giving effect thereto,
(i) the Aggregate Credit Exposure shall not exceed the Aggregate
Commitments, and (ii) with respect to each Lender, (I) the ag-
gregate principal amount of all Revolving Loans then outstanding
from such Lender (determined on the basis of the Dollar
Equivalent for each outstanding Alternate Currency Revolving
Loan), plus (II) the aggregate principal amount of all Individual
Currency Loans then outstanding from such Lender (determined on
the basis of the Dollar Equivalent of each such Individual
Currency Loan), plus (III) the SL/LC Credit Exposure of such
Lender, shall not exceed such Lender's Commitment. During the
Commitment Period, the Core Currency Borrowers may borrow, prepay
in whole or in part and reborrow Revolving Loans under the Ag-
gregate Commitments, all in accordance with the terms and con-
ditions of this Agreement.
(b) Subject to the terms and conditions hereof, Re-
volving Loans, (i) if to be made in Dollars (each a "Dollar Re-
volving Loan" and, collectively, the "Dollar Revolving Loans"),
shall be made to one or more Domestic Borrowers and shall, at the
option of such Domestic Borrowers, be either ABR Advances or
Eurodollar Advances, (ii) if to be made in French Francs, shall
be made to the French Borrower, (iii) if to be made in German
Marks, shall be made to the German Borrower, (iv) if to be made
in Japanese Yen, shall be made to the Japanese Borrower, and (v)
if to be made in Sterling Pounds, shall be made to the Sterling
Borrower. The Revolving Loans, together with all accrued and
unpaid interest thereon, shall mature and be due and payable in
the Applicable Currency on the Maturity Date.
(c) Subject to and upon the terms and conditions set
forth herein, the Swing Line Lender in its individual capacity
agrees to make at any time and from time to time during the Swing
Line Commitment Period, a loan or loans (each a "Swing Line Loan"
and, collectively, the "Swing Line Loans") to one or more of the
Swing Line Borrowers, which Swing Line Loans (i) shall, at the
option of the applicable Swing Line Borrower, be made and
maintained as Dollar Swing Line Loans or Alternate Currency Swing
Line Loans in an Available Alternate Currency, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii)
shall not, immediately after giving effect thereto, result in the
Aggregate Credit Exposure exceeding the Aggregate Commitments,
and (iv) shall not, immediately after giving effect thereto,
result in the aggregate outstanding principal amount of all Swing
Line Loans (determined on the basis of the Dollar Equivalent for
each outstanding Alternate Currency Swing Line Loan) exceeding
the Swing Line Commitment. The Swing Line Lender shall not be
36<PAGE>
obligated to make any Swing Line Loans at a time when any Lender
(other than the Swing Line Lender) shall be in default of its
obligations under this Agreement unless the Swing Line Lender has
entered into arrangements satisfactory to it and the Parent to
eliminate the Swing Line Lender's risk with respect to each de-
faulting Lender's participation in such Swing Line Loans. The
Swing Line Lender will not make a Swing Line Loan (i) if the
Administrative Agent or any Lender by notice to the Swing Line
Lender, the Parent and the affected Swing Line Borrower prior to
the time such Swing Line Loan is to be made, shall have
determined that any of the applicable conditions set forth in
Sections 5 and 6 have not been satisfied and such conditions
remain unsatisfied as of the requested time of making such Swing
Line Loan or (ii) to the extent that immediately after giving
effect thereto the Aggregate Credit Exposure would exceed the
Aggregate Commitments (each a "Non-Swing Loan Event"). Swing
Line Loans shall mature and be due and payable on the earlier of,
with respect to each Swing Line Negotiated Rate Advance and Swing
Line Loan maintained as an ABR Advance, (x) the last day of the
Swing Line Interest Period applicable thereto and (y) the
Maturity Date. Subject to the terms and conditions hereof,
Swing Line Loans, (i) if to be made in Dollars (each a "Dollar
Swing Line Loan" and, collectively, the "Dollar Swing Line
Loans"), shall be made to one or more Domestic Borrowers and
shall be ABR Advances, (ii) if to be made in French Francs, shall
be made to the French Borrower, (iii) if to be made in German
Marks, shall be made to the German Borrower, (iv) if to be made
in Japanese Yen, shall be made to the Japanese Borrower, and (v)
if to be made in Sterling Pounds, shall be made to the Sterling
Borrower.
(d) On any Business Day, the Swing Line Lender may, in
its sole discretion, give notice to the Lenders and the Parent
(on behalf of all Swing Line Borrowers) that its outstanding
Swing Line Loans shall be funded with a borrowing of Revolving
Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event
of Default under Sections 9.1(g) or (h)), in which case one or
more borrowings of Revolving Loans constituting ABR Advances (or
constituting one or more Eurodollar Advances specified by the
Parent in accordance with Section 2.3(a)) or Alternate Currency
Revolving Loans with a one month Euro Interest Period (or such
other Euro Interest Period(s) specified by the Parent in
accordance with Section 2.3(a)) in the Applicable Currency, as
the case may be (each such borrowing a "Mandatory Borrowing"),
shall be made on the fifth Business Day immediately succeeding
such notice by all Lenders pro rata based on each such Lender's
Availability Percentage immediately prior thereto but after
giving effect to any prepayment of Revolving Loans, Individual
Currency Loans, or Swing Line Loans, or any payment of
reimbursement obligations in respect of the Letters of Credit, to
be made simultaneously therewith, and the proceeds thereof shall
37<PAGE>
be applied directly to the Swing Line Lender to repay the Swing
Line Lender for such outstanding Swing Line Loans. Each Lender
hereby irrevocably agrees to make Revolving Loans in Dollars or
the Applicable Currency, as the case may be, pursuant to each
Mandatory Borrowing in respect of any Swing Line Loan in the
amount and in the manner specified in the preceding sentence and
on the date specified in writing by the Swing Line Lender
notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the minimum amount for Loans otherwise required
hereunder, (ii) whether any conditions specified in Sections 5
and 6 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) the date of such Mandatory Borrowing,
(v) the aggregate principal amount of all Loans then outstanding
(determined on the basis of the Dollar Equivalent of each out-
standing Alternate Currency Loan), (vi) the Aggregate Credit
Exposure at such time and (vii) the amount of the Aggregate
Commitments at such time, provided that no Non-Swing Loan Event
shall have occurred and be continuing with respect to such Swing
Line Loan. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (in-
cluding as a result of the commencement of any proceeding re-
ferred to in Sections 9.1(g) or (h)) then each Lender hereby
agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Parent or the applicable Swing
Line Borrower on or after such date and prior to such purchase)
from the Swing Line Lender such assignments in each outstanding
Swing Line Loan as shall be necessary to cause the Lenders to
share in each such Swing Line Loan ratably based upon their re-
spective Availability Percentages at such time, provided that no
Non-Swing Loan Event shall have occurred and be continuing with
respect to such Swing Line Loan, and provided further that all
interest payable on each such Swing Line Loan shall be for the
account of the Swing Line Lender until the date as of which the
respective assignment therein is purchased and, to the extent
attributable to the purchased assignment, shall be payable to the
relevant Lender from and after such date. Each Lender agrees
promptly to indemnify the Swing Line Lender for any costs or
expenses the Swing Line Lender may incur as a result of the
failure of such Lender to fulfill its obligations under this
Section 2.1(d).
(e) Subject to the terms and conditions hereof, each
Lender in its individual capacity agrees to make at any time and
from time to time during the Commitment Period a loan or loans
under one or more of its Individual Currency Commitments (each an
"Individual Currency Loan" and, as the context may require, col-
lectively with all other Individual Currency Loans of such Lender
and, as the context may require, with the Individual Currency
Loans of all other Lenders, the "Individual Currency Loans") to
one or more of the applicable Non-Core Currency Borrowers in the
respective Applicable Currencies, provided, however, that
38<PAGE>
immediately after giving effect thereto:
(i) the Aggregate Credit Exposure shall not exceed the
Aggregate Commitments,
(ii) the Aggregate Credit Exposure attributable to all
Loans and Letters of Credit designated in Non-Core Curren-
cies shall not exceed $60,000,000,
(iii) with respect to any Applicable Currency, (x)
the aggregate principal amount of the Individual Currency
Loans of such Lender designated in such Applicable Currency
shall not exceed such Lender's Individual Currency
Commitment for such Applicable Currency and (y) the sum of
the aggregate principal amount of the Individual Currency
Loans of all Lenders in such Applicable Currency and the
Letter of Credit Exposure attributable to all Letters of
Credit issued in such Applicable Currency (determined on the
basis of the Dollar Equivalent of each such Individual
Currency Loan and each such Letter of Credit) shall not
exceed $5,000,000, and
(iv) with respect to each Lender (x) the aggregate
principal amount of all Individual Currency Loans then
outstanding from such Lender (determined on the basis of the
Dollar Equivalent of each such Individual Currency Loan),
plus (y) the aggregate principal amount of all Revolving
Loans then outstanding from such Lender (determined on the
basis of the Dollar Equivalent for each outstanding Alter-
nate Currency Revolving Loan), plus (z) the SL/LC Credit
Exposure of such Lender, shall not exceed such Lender's
Commitment.
During the Commitment Period, the Non-Core Currency Borrowers may
borrow, prepay in whole or in part and reborrow Individual
Currency Loans under the Aggregate Individual Currency Commit-
ments, all in accordance with the terms and conditions of this
Agreement.
(f) Subject to the terms and conditions hereof,
Individual Currency Loans, (i) if to be made in Australian
Dollars, shall be made to the Australian Borrower, (ii) if to be
made in Canadian Dollars, shall be made to the Canadian Borrower,
(iii) if to be made in Hong Kong Dollars, shall be made to the
Hong Kong Borrower, (iv) if to be made in Italian Lira, shall be
made to the Italian Borrower, (v) if to be made in Korean Won,
shall be made to the Korean Borrower, (vi) if to be made in
Malaysian Ringgit, shall be made to the Malaysian Borrower, (vii)
if to be made in Mexican Pesos, shall be made to the Mexican
Borrower, (viii) if to be made in Philippine Pesos, shall be made
to the Philippine Borrower, (ix) if to be made in Singaporean
Dollars, shall be made to the Singaporean Borrower, (x) if to be
39<PAGE>
made in Swiss Francs, shall be made to the Swiss Borrower, (xi)
if to be made in New Taiwan Dollars, shall be made to the
Taiwanese Borrower, and (xii) if to be made in Thai Baht, shall
be made to the Thai Borrower. Each Individual Currency Loan
shall be due and payable on the earlier of (x) the last day of
the Individual Currency Interest Period applicable thereto and
(y) the Maturity Date.
B. Minimum Amount of Each Borrowing
(a) The aggregate principal amount of each borrowing
of Revolving Loans shall not (x) in the case of Revolving Loans
constituting ABR Advances, be less than $500,000 or such amount
and a whole multiple of $100,000 in excess thereof, and (y) in
the case of Eurodollar Advances and Core Currency Euro Advances,
be less than $500,000 or such amount and a whole multiple of
$100,000 in excess thereof (or an amount in the applicable
Alternate Currency having a Dollar Equivalent of approximately
$500,000 or such amount plus a whole multiple of approximately
$100,000 in excess thereof in the case of a borrowing of
Alternate Currency Revolving Loans), provided, in each case that
Mandatory Borrowings shall be made in the amounts required by
Section 2.1(d).
(b) The aggregate principal amount of each borrowing
of Swing Line Loans shall not be less than $100,000 or such
amount plus a multiple of $50,000 in excess thereof (or an amount
in the applicable Alternate Currency having a Dollar Equivalent
of approximately $100,000 or such amount plus a whole multiple of
approximately $50,000 in excess thereof in the case of a
borrowing of Alternate Currency Swing Line Loans).
(c) The aggregate principal amount of each borrowing
of Individual Currency Loans shall not be less than an amount in
the applicable Non-Core Alternate Currency having a Dollar
Equivalent of approximately $100,000 or such amount plus a whole
multiple of approximately $50,000 in excess thereof.
(d) At no time shall the aggregate outstanding number
(whether as a result of borrowings or conversions), of all (x)
Eurodollar Advances exceed 5, (y) all Core Currency Euro Advances
exceed 10 and (z) all Individual Currency Loans exceed 18.
(e) The aggregate number of all Bid Requests shall not
exceed 12 (or such other number as the Parent and the Adminis-
trative Agent shall agree from time to time) in any fiscal
quarter.
C. Notice of Borrowing
(a) Whenever a Borrower desires to borrow Loans
hereunder (excluding Swing Line Loans, Bid Loans, Negotiated Rate
40<PAGE>
Loans, Individual Currency Loans and Mandatory Borrowings), the
Parent and such Borrower shall give the Administrative Agent at
its office set forth in Section 11.2 (i) no later than 10:00 A.M.
on the date that an ABR Advance is to be made written notice (or
telephonic notice promptly confirmed in writing) of each ABR
Advance, (ii) no later than 10:00 A.M. at least two Business
Days' prior written notice (or telephonic notice promptly con-
firmed in writing) of each Eurodollar Advance and (iii) no later
than 11:00 A.M. at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of
each Alternate Currency Loan (other than an Individual Currency
Loan) to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given be-
fore 10:00 A.M. on such day in the case of clauses (i) and (ii)
above and 11:00 A.M. on such day in the case of clause (iii)
above. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), shall be
irrevocable and shall be given by the Parent and the applicable
Borrower in the form of Exhibit C, appropriately completed to
specify (A) the name of such Borrower, (B) the date of such
borrowing (which shall be a Business Day), (C) the Applicable
Currency for such Loans, (D) the aggregate principal amount of
the Loans to be made (stated in the Applicable Currency), (E) in
the case of Dollar Loans, whether the Loans being made are to be
initially maintained as ABR Advances or Eurodollar Advances and
(F) in the case of all Loans (other than ABR Advances), the
initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Lender notice of
such proposed borrowing, of such Lender's proportionate share
thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.
(b) (i) Whenever a Swing Line Borrower desires to
borrow Swing Line Loans hereunder, the Parent and such Swing Line
Borrower shall give the Swing Line Lender a Notice of Borrowing
(or telephonic notice promptly confirmed by delivery of a Notice
of Borrowing) at its office set forth in Section 11.2 no later
than (x) 1:00 P.M. on the requested Borrowing Date in respect of
a Dollar Swing Line Loan, (y) 10:00 A.M. at least one Business
Day prior to the requested Borrowing Date in respect of an
Alternate Currency Swing Line Loan in Sterling Pounds and (z)
10:00 A.M. at least two Business Days prior to the requested
Borrowing Date in respect of any other Alternate Currency Swing
Line Loan, provided, that any such notice shall be deemed to have
been given on a certain day only if given before 1:00 P.M. on
such day in the case of clause (x) above or 10:00 A.M. on such
day in the case of clause (y) or (z) above. Each such notice
shall be irrevocable and specify in each case (A) the name of
such Swing Line Borrower, (B) the date of such incurrence (which
shall be a Business Day) (C) the Applicable Currency for such
Swing Line Loans, (D) the aggregate principal amount of such
Swing Line Loans (stated in the Applicable Currency) and (E) the
41<PAGE>
requested amount and the requested Swing Line Interest Period and
maturity date with respect to each Swing Line Negotiated Rate
Advance and Swing Line Loan made as an ABR Advance. Upon receipt
from the Parent and the applicable Swing Line Borrower of a
Notice of Borrowing which requests one or more Swing Line
Negotiated Rate Advances, the Swing Line Lender shall, following
discussion with the Parent regarding the proposed Swing Line
Negotiated Rate for such Swing Line Negotiated Rate Advance,
confirm in writing to the Parent the applicable Swing Line
Negotiated Rate (x) 12:00 Noon one Business Day prior to the
requested Borrowing Date in the case of a Swing Line Negotiated
Rate Advance in Sterling Pounds and (y) 12:00 Noon two Business
Days prior to the requested Borrowing Date in the case of a Swing
Line Negotiated Rate Advance in a Core Currency (other than
Dollars and Sterling Pounds).
(ii) Mandatory Borrowings shall be made upon the
notice specified in Section 2.1(d), with each Swing Line Borrower
irrevocably agreeing, by its borrowing of any Swing Line Loan, to
the making of the Mandatory Borrowings as set forth in Section
2.1(d).
(c) Whenever any Non-Core Currency Borrower desires to
borrow Individual Currency Loans hereunder, the Parent and such
Non-Core Currency Borrower shall give the applicable Lenders and
the Administrative Agent at their respective offices set forth in
11.2 a Notice of Borrowing (or telephonic notice promptly
confirmed by delivery of a Notice of Borrowing) no later than
11:00 A.M. at least three Business Days' prior to the requested
Borrowing Date in respect of such Individual Currency Loans,
provided that any such notice shall be deemed to have been given
on a certain day only if given before 11:00 A.M. on such day.
Upon its receipt of any such Notice of Borrowing, the
Administrative Agent shall promptly confirm in writing its
receipt of such Notice of Borrowing to each applicable Lender;
only upon receipt by such Lender of such written confirmation
from the Administrative Agent will such Notice of Borrowing
become effective. Each such notice of the Borrower shall be ir-
revocable and shall specify (A) the name of such Non-Core Bor-
rower, (B) the date of such borrowing (which shall be a Business
Day), (C) the Applicable Currency for such Individual Currency
Loans, (D) the aggregate principal amount of such Individual
Currency Loans (stated in the Applicable Currency), and (E) the
Interest Period to be applicable thereto.
(d) Without in any way limiting the obligation of any
Borrower to confirm in writing any telephonic notice of any
incurrence of Loans, the Administrative Agent or the Swing Line
Lender (in the case of any borrowing of Swing Line Loans), as the
case may be, may act without liability upon the basis of tele-
phonic notice of such borrowing, believed by the Administrative
Agent or the Swing Line Lender, as the case may be, in good faith
42<PAGE>
to be from such Borrower prior to receipt of written
confirmation.
D. Disbursement of Funds
(a) Revolving Loans and Swing Line Loans. No later
than 12:00 Noon (local time in the city in which the proceeds of
Loans (other than Bid Loans, Negotiated Rate Loans and Individual
Currency Loans) are to be made available in accordance with the
terms hereof) on the date specified in each Notice of Borrowing
(or no later than 5:00 P.M. (New York City time) on the date
specified for the borrowing of each Dollar Swing Line Loan and
each Dollar Revolving Loan), each Lender will make available its
pro rata portion of the Loans requested to be made on such date
(or in the case of Swing Line Loans, the Swing Line Lender shall
make available the full amount thereof), in the Applicable Cur-
rency. All such Loans shall be made available in immediately
available funds at the Applicable Payment Office of the Admin-
istrative Agent, and the Administrative Agent will make available
to the applicable Borrower at such Applicable Payment Office, in
the Applicable Currency, and in immediately available funds, the
aggregate of the amounts so made available by the Lenders prior
to 2:30 P.M. (local time in the city in which the proceeds of
such Loans are to be made available in accordance with the terms
hereof) on such day (or 5:00 P.M. (New York City time) on such
day for Dollar Swing Line Loans and Dollar Revolving Loans), in
each case to the extent of funds actually received by the Ad-
ministrative Agent.
(b) Bid Loans. No later than 12:00 Noon (local time in
the city in which the proceeds of such Bid Loans are to be made
available in accordance with the terms hereof) on the relevant
Borrowing Date, each Lender whose Bid was accepted by the ap-
plicable Borrower shall make available the proceeds of such
Lender's Bid Loan(s) (x) in the case of Dollar Bid Loans, to the
Administrative Agent at its Applicable Payment Office and (y) in
the case of Alternate Currency Bid Loans, directly to such
Borrower at such Lender's Applicable Payment Office, in each case
in immediately available funds in the Applicable Currency.
Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, if directed by the Required
Lenders and with the consent of the Administrative Agent, the
proceeds of all such Bid Loans shall be made available in
immediately available funds at the Applicable Payment Office of
the Administrative Agent. All amounts made available to the
Administrative Agent on the applicable Borrowing Date pursuant to
the preceding two sentences will then be made available on such
date to the applicable Borrower by the Administrative Agent at
the Applicable Payment Office of the Administrative Agent to the
extent of funds actually received by the Administrative Agent no
later than 2:30 P.M. (local time in the city in which the
proceeds of such loans are to be made available in accordance
43<PAGE>
with the terms hereof).
(c) Negotiated Rate Loans. No later than 12:00 Noon
(local time in the city in which the proceeds of such Negotiated
Rate Loans are to be made available in accordance with the terms
hereof) on the relevant Borrowing Date for each Negotiated Rate
Loan, the applicable Lender shall make available the proceeds of
such Negotiated Rate Loan (x) in the case of Dollar Negotiated
Rate Loans, to the Administrative Agent at its Applicable Payment
Office and (y) in the case of Alternate Currency Negotiated Rate
Loans, directly to the applicable Borrower at such Lender's
Applicable Payment Office, in each case in immediately available
funds in the Applicable Currency. Notwithstanding the foregoing,
upon the occurrence and during the continuance of an Event of
Default, if directed by the Required Lenders and with the consent
of the Administrative Agent, the proceeds of all such Negotiated
Rate Loans shall be made available in immediately available funds
at the Applicable Payment Office of the Administrative Agent.
All amounts made available to the Administrative Agent on the ap-
plicable Borrowing Date pursuant to the preceding two sentences
will then be made available on such date to the applicable Bor-
rower by the Administrative Agent at the Applicable Payment
Office of the Administrative Agent to the extent of funds
actually received by the Administrative Agent no later than 2:30
P.M. (local time in the city in which the proceeds of such loans
are to be made available in accordance with the terms hereof).
(d) Individual Currency Loans. No later than 12:00
Noon (local time in the city in which the proceeds of such
Individual Currency Loans are to be made available in accordance
with the terms hereof) on the relevant Borrowing Date for each
Individual Currency Loan, the applicable Lender shall make
available the proceeds of such Individual Currency Loan directly
to the applicable Borrower at such Lender's Applicable Payment
Office, in each case in immediately available funds in the
Applicable Currency. Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default, if
directed by the Required Lenders and with the consent of the
Administrative Agent, the proceeds of all such Individual
Currency Loans shall be made available in immediately available
funds at the Applicable Payment Office of the Administrative
Agent. All amounts made available to the Administrative Agent on
the applicable Borrowing Date pursuant to the preceding two sen-
tences will then be made available on such date to the applicable
Borrower by the Administrative Agent at the Applicable Payment
Office of the Administrative Agent to the extent of funds
actually received by the Administrative Agent no later than 2:30
P.M. (local time in the city in which the proceeds of such loans
are to be made available in accordance with the terms hereof).
(e) Failure to Fund. Unless the Administrative Agent
shall have been notified by a Lender prior to the making of any
44<PAGE>
Loans that such Lender does not intend to make available to the
Administrative Agent either (w) such Lender's portion of the
Loans (other than Bid Loans, Individual Currency Loans and
Negotiated Rate Loans) to be made on such date, (x) such Lender's
Bid Loan which is to be made available to the Administrative
Agent, (y) such Lender's Negotiated Rate Loan which is to be made
available to the Administrative Agent or (z) such Lender's
Individual Currency Loan which is to be made available to the
Administrative Agent, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative
Agent on such Borrowing Date and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. If such corresponding amount is
not in fact made available to the Administrative Agent by such
Lender, the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Lender together
with all costs and expenses incurred by the Administrative Agent
in connection therewith. If such Lender does not pay such cor-
responding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify
the applicable Borrower. The Administrative Agent shall be
entitled to recover on demand from such Lender interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative
Agent to such Borrower until the date such corresponding amount
is recovered by the Administrative Agent, at a rate per annum
equal to the Federal Funds Rate in effect (or in the case of
Alternate Currency Loans, at a rate based upon the all-in cost of
funds for the Applicable Currency) on each such day (as
determined by the Administrative Agent). If such corresponding
amount is not made available by such Lender to the Administrative
Agent within one Business Day after such Borrowing Date, the Ad-
ministrative Agent shall also be entitled to receive from the
applicable Borrower such amount, together with (w) in the case of
a Loan (other than a Bid Loan, an Individual Currency Loan and a
Negotiated Rate Loan), the rate of interest applicable to such
Loan as determined pursuant to Section 2.8, (x) in the case of
Bid Loan, the applicable interest rate for such Bid Loan (or in
the case of Alternate Currency Bid Loans, at a rate based upon
the all-in cost of funds for the Applicable Currency) (y) in the
case of a Negotiated Rate Loan, the applicable interest rate for
such Negotiated Rate Loan (or in the case of Alternate Currency
Negotiated Rate Loans, at a rate based upon the all-in cost of
funds for the Applicable Currency), or (z) in the case of an
Individual Currency Loan, the applicable rate based upon the all-
in cost of funds for the Applicable Currency. Nothing in this
Section shall be deemed to relieve any Lender from its obligation
to make Loans hereunder or to prejudice any rights which the ap-
plicable Borrower may have against any Lender as a result of any
failure by such Lender to make Loans hereunder.
(f) Borrower Accounts. Each Loan made to a Borrower
45<PAGE>
shall be made to its applicable payment account specified on
Exhibit T or such other account which it may from time to time
specify by written notice to the Administrative Agent and the
Lenders.
E. Payments.
(a) Loans and Fees. Except as otherwise specifically
provided herein, each payment, including each prepayment, of
principal and interest on the Revolving Loans, the Individual
Currency Loans, the Negotiated Rate Loans, the Bid Loans, the
Facility Fee and the Letter of Credit Commissions shall be made
by the Borrowers to the Administrative Agent at its Applicable
Payment Office in funds immediately available to the
Administrative Agent at such office by 12:00 Noon (local time in
the city in which such Applicable Payment Office is located) on
the due date for such payment, provided, however, that unless an
Event of Default has occurred and is continuing and the Required
Lenders have directed the Administrative Agent and the Borrowers
to the contrary, and the Administrative Agent shall have
consented thereto, each payment, including each prepayment, of
principal and interest on the Alternate Currency Bid Loans, the
Alternate Currency Negotiated Rate Loans, and the Individual
Currency Loans shall be made directly by the applicable Borrower
to the applicable Lender at the Applicable Payment Office of such
Lender by 12:00 Noon (local time in the city in which such
Lender's Applicable Payment Office is located). Promptly upon
receipt by the Administrative Agent of payments made to it
pursuant to this Section 2.5(a), the Administrative Agent shall
remit such payment in like funds as received to the Lenders (x)
(i) in the case of the Facility Fee, according to the Commitment
Percentage of each Lender, and (ii) in the case of the Letter of
Credit Commissions, the average daily Availability Percentage of
each Lender for the period in respect of which such payment was
made and (y) pro rata according to the aggregate outstanding
principal balance of the Revolving Loans, the applicable Indi-
vidual Currency Loans, the applicable Negotiated Rate Loans or
the applicable Bid Loans, as the case may be, of each Lender, in
the case of principal and interest thereon. The Parent and each
Lender shall promptly notify the Administrative Agent of the date
and amount of each direct payment made by a Borrower to such
Lender in respect of each Alternate Currency Bid Loan, each
Alternate Currency Negotiated Rate Loan and each Individual
Currency Loan pursuant to this Section 2.5(a).
(b) Swing Line Loans. Each payment, including each
prepayment, of principal and interest on the Swing Line Loans
shall be made by the applicable Swing Loan Borrower to the Admin-
istrative Agent at its Applicable Payment Office in funds im-
mediately available to the Administrative Agent at such office by
12:00 Noon (local time in the city in which such Applicable
Payment Office is located) on the due date for such payment and,
46<PAGE>
promptly upon receipt thereof by the Administrative Agent, shall
be remitted by the Administrative Agent in like funds as
received, to the Swing Line Lender.
(c) Late Payments. The failure of any of the Borrowers
to make any such payment by the time required above in this
Section 2.5 shall not constitute a default hereunder, provided
that such payment is made on such due date, but any such payment
made after 12:00 Noon (local time in the city in which such
Applicable Payment Office is located) on such due date shall be
deemed to have been made on the next Business Day for the purpose
of calculating interest on amounts outstanding on the applicable
Loans.
(d) Alternate Currencies. The principal of and inter-
est on each Alternate Currency Loan shall be paid only in the
Applicable Currency for such Alternate Currency Loan.
(e) Payments Due on Days Which are Not Business Days.
If any payment hereunder shall be due and payable on a day which
is not a Business Day, the due date thereof (except as otherwise
provided herein) shall be extended to the next Business Day and
with respect to payments in respect of principal and interest
shall be payable at the applicable rate specified herein during
such extension.
F. Conversions
(a) Each applicable Borrower shall have the option to
convert on any Business Day all or a portion of the outstanding
principal amount of ABR Advances (other than ABR Advances
constituting Swing Line Loans), Eurodollar Advances or Core
Currency Euro Advances into (i) in the case of an ABR Advance,
one or more Eurodollar Advances, (ii) in the case of a Eurodollar
Advance, one or more ABR Advances or one or more new Eurodollar
Advances and (iii) in the case of a Core Currency Euro Advance,
one or more new Core Currency Euro Advances of the same Core
Currency, provided that (A) except as otherwise provided in
Section 2.14(b), Eurodollar Advances may be converted into ABR
Advances or new Eurodollar Advances only on the last day of the
Interest Period applicable to the Eurodollar Advances being
converted, (B) except as otherwise provided in Section 2.14(b),
Core Currency Euro Advances may be converted into new Core
Currency Euro Advances only on the last day of the Interest
Period applicable to the Core Currency Euro Advances being
converted, (C) the outstanding principal amount of the new
Eurodollar Advances having the same Interest Period or the new
Core Currency Euro Advances having the same Interest Period shall
be in an amount equal to $500,000 or such amount plus a whole
multiple of $100,000 in excess thereof (or an amount in the
applicable Alternate Currency having a Dollar Equivalent of ap-
proximately $500,000 or such amount plus a whole multiple of
47<PAGE>
approximately $100,000 in excess thereof in the case of such Core
Currency Euro Advances), (D) the outstanding principal amount of
the new ABR Advances shall be in an amount equal to $500,000 or
such amount plus a whole multiple of $100,000 in excess thereof,
(E) ABR Advances or Eurodollar Advances may not be converted into
Eurodollar Advances if any Default or Event of Default is in
existence on the date of the conversion and the Administrative
Agent or the Required Lenders have determined that such a
conversion is not appropriate, and (F) no conversion pursuant to
this Section shall result in a greater number of Eurodollar
Advances or Core Currency Euro Advances than is permitted under
Section 2.2(d).
(b) Each such conversion shall be effected by the ap-
plicable Borrower by giving the Administrative Agent, at its
office set forth in Section 11.2 prior to 10:00 A.M. in the case
of Dollar Loans, at least two Business Days prior written notice
and, in the case of Core Currency Euro Advances, at least three
Business Days prior written notice (each a "Notice of Conver-
sion"), specifying the ABR Advances, the Eurodollar Advances or
the Core Currency Euro Advances to be so converted, the date of
such conversion (which shall be a Business Day) and, if to be
converted into Eurodollar Advances or Core Currency Euro
Advances, the Interest Period to be applicable thereto. The
Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans.
(c) If with respect to the expiration of an existing
Interest Period for a Eurodollar Advance or a Core Currency Euro
Advance the applicable Borrower has failed to deliver a Notice of
Conversion with respect thereto, such Borrower shall be deemed to
have elected (i) if a Eurodollar Advance, to convert such
Eurodollar Advance to an ABR Advance and (ii) if a Core Currency
Euro Advance, to convert such Core Currency Euro Advance to a new
Core Currency Euro Advance with a one month Interest Period, in
either case effective as of the expiration date of such existing
Interest Period.
G. Pro Rata Borrowings; Special Procedures and Assumptions
(a) Pro Rata Borrowings. In connection with each
borrowing of Revolving Loans, each Lender shall make available an
amount equal to the aggregate amount of such Revolving Loans,
multiplied by such Lender's Availability Percentage calculated in
accordance with Section 2.7(b). It is understood that no Lender
shall be responsible for any default by any other Lender of its
obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Loans
hereunder.
(b) Special Procedures and Assumptions.
48<PAGE>
Notwithstanding anything to the contrary contained herein:
(i) all Notices of Borrowing and all Letter of Credit
Requests to be delivered to the Administrative Agent on the
same day shall be delivered to the Administrative Agent at
the same time;
(ii) with respect to any Loans (other than a Bid Loan
or a Negotiated Rate Loan) or Letters of Credit requested
pursuant to one or more Notices of Borrowing or Letter of
Credit Requests delivered to the Agent on the same day,
during the period commencing on the date of such delivery to
the Administrative Agent and ending on the Borrowing Date of
the last such Loan or the date of issuance of the last such
Letter of Credit to be made or issued pursuant to such
Notices of Borrowing or Letter of Credit Requests (the
"Borrowing/Issuance Period"):
(A) no additional Loan (other than a Bid Loan or a
Negotiated Rate Loan) shall be requested to be made and
no additional Letter of Credit shall be requested to be
issued;
(B) no Loan (other than a Bid Loan or a Negotiated
Rate Loan) shall be voluntarily prepaid; and
(C) neither the Aggregate Commitments, the Swing
Line Commitment, any Individual Currency Commitment of
any Lender, nor the Letter of Credit Commitment shall
be voluntarily reduced;
(iii) for purposes of calculating the Availability
Percentage for any Revolving Loans requested to be made
during any Borrowing/Issuance Period:
(A) any payment of any Revolving Loan, Individual
Currency Loan, Swing Line Loan or reimbursement
obligation in respect of a Letter of Credit which is
scheduled to be made during such Borrowing/Issuance
Period shall be deemed to have been made immediately
prior to the commencement of such Borrowing/Issuance
Period;
(B) any Letter of Credit which is scheduled to
expire or otherwise terminate during such
Borrowing/Issuance Period shall be deemed to have
expired or otherwise terminated immediately prior to
the commencement of such Borrowing/Issuance Period;
(C) any Individual Currency Loans which are to be
made during such Borrowing/Issuance Period shall be
deemed to have been made immediately prior to the
49<PAGE>
making of any Revolving Loans or Swing Line Loans, or
the issuance of any Letters of Credit, during such
Borrowing/Issuance Period; and
(D) any Revolving Loans, Swing Line Loans and
Letters of Credit which are to be made or issued during
such Borrowing/Issuance Period shall be deemed to have
been made and issued simultaneously; and
(iv) the Availability Percentage during any
Borrowing/Issuance Period shall be determined by the
Administrative Agent in accordance with this Section 2.7(b) on
the first day of such Borrowing/Issuance Period and shall
continue in effect through the last day of such
Borrowing/Issuance Period.
H. Interest
(a) Each Domestic Borrower agrees to pay interest in
respect of the unpaid principal amount of each ABR Advance made
to such Domestic Borrower from the date thereof until the
conversion or maturity (whether by acceleration or otherwise) of
such ABR Advance, at a rate per annum which shall be equal to the
sum of the Applicable Margin plus the Alternate Base Rate in
effect from time to time.
(b) Each Domestic Borrower agrees to pay interest in
respect of the unpaid principal amount of each Eurodollar Advance
made to such Domestic Borrower from the date thereof until the
conversion or maturity (whether by acceleration or otherwise) of
such Eurodollar Advance, at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of
the Applicable Margin plus the Eurodollar Rate for such Interest
Period.
(c) Each Borrower agrees to pay interest in respect of
the unpaid principal amount of each Core Currency Euro Advance
made to such Borrower from the date thereof until the conversion
or maturity (whether by acceleration or otherwise) of such Core
Currency Euro Advance at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of
the Applicable Margin plus the Core Currency Euro Rate for such
Interest Period.
(d) Each Non-Core Currency Borrower agrees to pay
interest in respect of the unpaid principal amount of each
Individual Currency Loan made to such Non-Core Currency Borrower
from the date thereof until the maturity (whether by acceleration
or otherwise) of such Individual Currency Loan at a rate per
annum which shall, during the Interest Period applicable thereto,
be equal to the sum of the Applicable Margin plus the Individual
Currency Rate for such Interest Period.
50<PAGE>
(e) Each Swing Line Borrower agrees to pay interest in
respect of the unpaid principal amount of each Swing Line
Negotiated Rate Advance made to such Swing Line Borrower from the
date thereof until the maturity (whether by acceleration or
otherwise) of such Swing Line Negotiated Rate Advance at a rate
per annum which shall, during the Interest Period applicable
thereto, be equal to the Swing Line Negotiated Rate for such
Interest Period.
(f) Each Borrower agrees to pay interest in respect of
the unpaid principal amount of each Bid Loan made to such
Borrower from the date thereof until the maturity (whether by
acceleration or otherwise) of such Bid Loan at a rate per annum
which shall, during the Interest Period applicable thereto, be
equal to the Bid Rate for such Interest Period.
(g) Each Borrower agrees to pay interest in respect of
the unpaid principal amount of each Negotiated Rate Loan made to
such Borrower from the date thereof until the maturity (whether
by acceleration or otherwise) of such Negotiated Rate Loan at a
rate per annum which shall, during the Interest Period applicable
thereto, be equal to the Negotiated Rate for such Interest
Period.
(h) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan shall, in each
case, bear interest at a rate per annum equal to the rate which
is 2% in excess of the rate applicable to such Loan (or in the
case of a Dollar Bid Loan or a Dollar Negotiated Rate Loan, 2% in
excess of the Alternate Base Rate, or in the case of an Alternate
Currency Bid Loan, an Alternate Currency Swing Line Loan, an
Alternate Currency Negotiated Rate Loan, an Individual Currency
Loan or a Letter of Credit designated in an Alternate Currency,
2% in excess of the all-in rate determined by the applicable
Lender, Issuing Bank or Swing Line Lender, as the case may be, as
its cost of funds in the Applicable Currency or, in the case of
such Letter of Credit, the applicable Currency) until paid in
full (whether before of after the entry of a judgment thereon).
If all or any portion of any reimbursement obligation in respect
of a Letter of Credit designated in Dollars shall not be paid
when due (whether at the stated maturity thereof, by acceleration
or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the Alternate Base Rate plus 2%, from the
date of such nonpayment until paid in full (whether before or
after the entry of a judgment thereon). Any other overdue amount
payable hereunder shall, to the extent permitted by law, bear
interest at a rate per annum equal to the Alternate Base Rate
plus 2% until paid in full (whether before or after the entry of
a judgment thereon). All such interest shall be payable on de-
mand.
(i) Accrued (and theretofore unpaid) interest shall be
51<PAGE>
payable (i) in respect of each ABR Advance constituting a
Revolving Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Advance and each Core
Currency Euro Advance, on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period, (iii) in
respect of each Bid Loan, Negotiated Rate Loan, Individual
Currency Loan, Swing Line Negotiated Rate Advance and ABR Advance
made as a Swing Loan, on the last day of the Interest Period ap-
plicable thereto, and (iv) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(j) The Administrative Agent shall determine the
respective interest rate for each Interest Period applicable to a
Eurodollar Advance or Core Currency Euro Advance for which such
determination is being made and shall promptly notify the
applicable Borrower and the Lenders thereof.
(k) Interest on all Loans shall be calculated on the
basis of a 360 day year for the actual number of days elapsed
except that interest on ABR Advances to the extent based on the
BNY Rate, interest on Core Currency Euro Advances in Sterling
Pounds and interest on Individual Currency Loans designated in
Australian Dollars, Canadian Dollars, Italian Lira and New Taiwan
Dollars shall be calculated on the basis of a 365 or 366-day year
(as the case may be). Any change in the interest rate on the
Loans resulting from a change in the Alternate Base Rate or the
Federal Funds Rate shall become effective as of the opening of
business on the day on which such change shall become effective.
The Administrative Agent shall, as soon as practicable, notify
the Parent (on behalf of all Borrowers) and the Lenders of the
effective date and the amount of each change in the BNY Rate, but
any failure so to notify shall not in any manner affect the obli-
gation of the Borrowers to pay interest on the Loans in the
amounts and on the dates required. Each determination of (i) the
Alternate Base Rate, a Eurodollar Rate or a Core Currency Euro
Rate by the Administrative Agent, (ii) an Individual Currency
Rate by the applicable Lender, and (iii) an all-in cost of funds
rate or any rate based thereon by the Administrative Agent or
the Reference Lender, or such applicable Lender, as the case may
be, in each case pursuant to this Agreement shall be conclusive
and binding on all parties hereto absent manifest error. The
Borrowers acknowledge that to the extent interest payable on ABR
Advances is based on the BNY Rate, such Rate is only one of the
bases for computing interest on loans made by the Lenders, and by
basing interest payable on ABR Advances on the BNY Rate, the
Lenders have not committed to charge, and the Borrowers have not
in any way bargained for, interest based on a lower or the lowest
rate at which the Lenders may now or in the future make loans to
52<PAGE>
other borrowers.
(l) Decreases in the Applicable Margin resulting from
a change in Pricing Levels I, II, III, IV and/or V shall become
effective upon the delivery by the Parent to the Administrative
Agent of a certificate of the Responsible Officer certifying as
to a change in the Rating by Moody's or S&P of the senior
unsecured long term debt rating of the Parent. Increases in the
Applicable Margin shall become effective on the effective date of
any downgrade or withdrawal in the Rating by Moody's or S&P of
the senior unsecured long term debt rating of the Parent.
(m) If the Reference Lender shall for any reason no
longer be a Lender, it shall thereupon cease to be the Reference
Lender. The Administrative Agent shall, by notice to the
Borrowers and the Lenders, designate another Lender as the
Reference Lender so that there shall at all times be at least one
Reference Lender. The Reference Lender shall use its best
efforts to furnish quotations of rates to the Administrative
Agent on a timely basis as contemplated hereby.
I. Termination or Reduction of Aggregate Commitments,
Swing Line Commitment, Individual Currency Commitments and Letter
of Credit Commitment
(a) Voluntary Reductions. The Parent shall have the
right, upon at least three Business Days' prior written notice to
the Administrative Agent, at any time to terminate the Aggregate
Commitments or the Letter of Credit Commitment or from time to
time to reduce permanently the Aggregate Commitments or the
Letter of Credit Commitment, provided, however, that any such re-
duction shall be in the amount of $10,000,000 or such amount plus
a whole multiple of $1,000,000 in excess thereof.
(b) Swing Line Commitment. The Parent shall have the
right, upon at least three Business Days' prior written notice to
the Administrative Agent and the Swing Line Lender, at any time,
to reduce permanently the Swing Line Commitment in whole at any
time, or in part from time to time, to an amount not less than
the aggregate principal balance of the Swing Line Loans then out-
standing (after giving effect to any contemporaneous prepayment
thereof) without premium or penalty, provided that each partial
reduction of the Swing Line Commitment shall be in an amount
equal to $10,000,000 or such amount plus a whole multiple of
$1,000,000 in excess thereof.
(c) Individual Currency Commitments. The Parent shall
have the right, upon at least three Business Days' prior written
notice to the Administrative Agent and the applicable Lender, at
any time, to reduce permanently any Individual Currency Com-
mitment of such Lender in whole at any time, or in part from time
to time, to an amount not less than the aggregate principal
53<PAGE>
balance of the Individual Currency Loans of such Lender then out-
standing under such Individual Currency Commitment (after giving
effect to any contemporaneous prepayment thereof) without premium
or penalty provided that each partial reduction of such
Individual Currency Commitment shall be in an amount in the
applicable Non-Core Currency having a Dollar Equivalent of
approximately $1,000,000 or such amount plus a whole multiple of
approximately $1,000,000 in excess thereof.
(d) In General. Each reduction of the Aggregate Com-
mitments shall be applied pro rata according to the Commitment
Percentage of each Lender, and each reduction in the Letter of
Credit Commitment shall be applied pro rata according to the
Availability Percentage of each Lender at the time of such
reduction. Simultaneously with each reduction of the Aggregate
Commitments under this Section, the Borrowers shall pay the
Facility Fee accrued on the amount by which the Aggregate Commit-
ments have been reduced. Simultaneously with each reduction of
the Aggregate Commitments, the Swing Line Commitment and the
Individual Currency Commitments, the Borrowers shall prepay the
Loans as required by Section 2.10. The Aggregate Commitments
shall not be reduced below an amount equal to the Aggregate
Credit Exposure (after giving effect to any prepayment of the
Loans made simultaneously with such reduction of the Aggregate
Commitments). The Aggregate Commitments shall not be reduced to
the extent, immediately after giving effect thereto, the
Commitment of any Lender would exceed the sum of (I) the ag-
gregate principal amount of all Revolving Loans then outstanding
from such Lender (determined on the basis of the Dollar
Equivalent for each outstanding Alternate Currency Revolving
Loan), plus (II) the aggregate principal amount of all Individual
Currency Loans then outstanding from such Lender (determined on
the basis of the Dollar Equivalent of each such Individual Cur-
rency Loan), plus (III) the SL/LC Credit Exposure of such Lender.
The Letter of Credit Commitment shall not be reduced below an
amount equal to the Letter of Credit Exposure.
J. Prepayments of the Loans
(a) Voluntary Prepayments. Each Borrower may, at its
option, prepay the Loans made to such Borrower without premium or
penalty, (x) in the case of Revolving Loans and Swing Loans, in
full at any time or in part from time to time, and (y) in the
case of Negotiated Rate Loans, Bid Loans and Individual Currency
Loans, in full at any time, in each case by notifying the
Administrative Agent in writing at least three Business Days
prior to the proposed prepayment date, identifying the Loans to
be prepaid as Revolving Loans, Swing Line Loans, Negotiated Rate
Loans, Bid Loans or Individual Currency Loans and specifying
whether the Loans to be prepaid consist of ABR Advances, Euro-
dollar Advances, Core Currency Euro Advances or Swing Line
Negotiated Rate Advances, or a combination thereof, the amount to
54<PAGE>
be prepaid and the date of prepayment. Such notice shall be ir-
revocable and the amount specified in such notice shall be due
and payable on the date specified, together with accrued interest
to the date of such payment on the amount prepaid. Upon receipt
of such notice, the Administrative Agent shall promptly notify
each Lender thereof in the case of Revolving Loans, the Swing
Line Lender in the case of Swing Loans and the applicable Lender
or Lenders in the case of Bid Loans, Negotiated Rate Loans and
Individual Currency Loans. Each partial prepayment of ABR Ad-
vances pursuant to this subsection shall be in an aggregate
principal amount of $100,000 or such amount plus a whole multiple
of $50,000 in excess thereof, or, if less, the outstanding
principal balance of the ABR Advances. After giving effect to
any partial prepayment with respect to Eurodollar Advances or
Core Currency Euro Advances which were made (whether as the
result of a borrowing or a conversion) on the same date and which
had the same Interest Period, the outstanding principal amount of
such Eurodollar Advances or Core Currency Euro Advances shall
equal (subject to Section 2.6) $500,000 or such amount plus a
whole multiple of $100,000 in excess thereof (or the Alternate
Currency Equivalent of approximately $500,000 or such amount plus
a whole multiple of approximately $100,000 in excess thereof in
the case of a prepayment of Core Currency Euro Advances).
(b) Mandatory Prepayments of Loans.
(i) Subject to clause (ii) below with respect to
Swing Line Loans and clause (iii) below with respect to the
Individual Currency Loans of each Lender, simultaneously with
each reduction of the Aggregate Commitments under Section 2.9,
the Borrowers shall prepay the Loans by the amount, if any, by
which the Aggregate Credit Exposure exceeds the amount of the
Aggregate Commitments as so reduced.
(ii) Simultaneously with each reduction of the
Swing Line Commitment under Section 2.9, the Swing Line Borrowers
shall prepay the Swing Line Loans by the amount, if any, by which
the outstanding principal balance of the Swing Line Loans (de-
termined on the basis of the Dollar Equivalent for each out-
standing Alternate Currency Swing Line Loan) exceeds the amount
of the Swing Line Commitment as so reduced.
(iii) Simultaneously with each reduction of the
Individual Currency Commitment of any Lender under Section 2.9,
the applicable Non-Core Currency Borrower shall prepay the
Individual Currency Loans made by such Lender to such Non-Core
Currency Borrower under such Individual Currency Commitment by
the amount, if any, by which the outstanding principal balance of
such Individual Currency Loans exceeds the amount of such
Individual Currency Commitment as so reduced.
(iv) If on any date that the Dollar Equivalent is
55<PAGE>
required to be calculated pursuant to Section 11.6 the Aggregate
Credit Exposure shall exceed the Aggregate Commitments, the
Borrowers shall prepay the Loans in an aggregate principal amount
such that immediately after giving effect thereto, the Aggregate
Credit Exposure shall not exceed the Aggregate Commitments.
(v) If on any date that the Dollar Equivalent is
required to be calculated pursuant to Section 11.6 the Aggregate
Credit Exposure attributable to all Loans and Letters of Credit
designated in Non-Core Currencies shall exceed $60,000,000, the
Borrowers shall prepay such Loans in an aggregate principal
amount such that immediately after giving effect thereto, the
Aggregate Credit Exposure attributable to all Loans and Letters
of Credit designated in Non-Core Currencies shall not exceed
$60,000,000.
(c) In General. If any prepayment is made in respect
of any Eurodollar Advance, Core Currency Euro Advance, Swing Line
Negotiated Rate Advance, Individual Currency Loan, Negotiated
Rate Loan or Bid Loan, in whole or in part, prior to the last day
of the Interest Period applicable thereto, the applicable Bor-
rower agrees to indemnify the Lenders in accordance with Section
2.15.
K. Bid Loans; Procedure
(a) Each Borrower may make Bid Requests by 12:00 Noon
(i) at least two Business Days prior to the proposed Borrowing
Date for one or more Bid Loans. Each Bid Request shall be given
to the Administrative Agent (which shall promptly on the same day
give notice thereof to each Lender by facsimile of an Invitation
to Bid if the Bid Request is not rejected pursuant to this Sec-
tion), shall be by telephone (confirmed in writing promptly on
the same day by the delivery of a Bid Request signed by the
applicable Borrower), and shall specify (i) the proposed
Borrowing Date, which shall be a Business Day, (ii) the aggregate
amount of the requested Bid Loans (the "Maximum Request") which
shall not (A) exceed an amount which, on the proposed Borrowing
Date, and after giving effect to the proposed Bid Loans, would
result in (x) the Aggregate Credit Exposure exceeding the Ag-
gregate Commitments or (y) the Aggregate Credit Exposure at-
tributable to all Loans and Letters of Credit designated in Non-
Core Currencies exceeding $60,000,000, or (B) with respect to
each Bid Loan be less than $500,000 or such amount plus a whole
multiple of $100,000 in excess thereof (or approximately the Dol-
lar Equivalent thereof in the case of Alternate Currency Bid
Loans), (iii) the Bid Interest Period(s) (up to three Bid Inter-
est Periods may be requested pursuant to each Bid Request)
therefor and the last day of each such Interest Period and (iv)
the Applicable Currency for each Bid Loan. A Bid Request that
does not conform substantially to the form of Exhibit F shall be
rejected, and the Administrative Agent shall promptly notify the
56<PAGE>
applicable Borrower of such rejection.
(b) Each Lender in its sole discretion may (but is not
obligated to) submit one or more Bids to the Administrative Agent
and the Parent not later than 9:30 A.M. (i) one Business Day
prior to the proposed Borrowing Date specified in such Bid
Request in the case of a Bid Loan (such 9:30 A.M. time on such
Business Days each being herein called a "Bid Submission Dead-
line"), by fax or in writing, and thereby irrevocably offer to
make all or any part (any such part referred to as a "Portion")
of any Bid Loan described in the relevant Bid Request, at a rate
of interest per annum (each a "Bid Rate") specified therein, in
an aggregate principal amount of not less than $500,000 or such
amount plus a wholemultiple of $100,000 in excess thereof (or ap-
proximately the Dollar Equivalent thereof in the case of Al-
ternate Currency Bid Loans), provided that Bids submitted by the
Administrative Agent may only be submitted if the Administrative
Agent notifies the Parent and the applicable Borrower of the
terms of its Bid not later than fifteen minutes prior to the Bid
Submission Deadline. Multiple Bids may be delivered to and by
the Administrative Agent. The aggregate Portions of Bid Loans
for any or all Interest Periods offered by each Lender in its Bid
may exceed the Maximum Request contained in the relevant Bid Re-
quest, provided that each Bid shall set forth the maximum ag-
gregate amount of the Bid Loans offered thereby which the ap-
plicable Borrower may accept (the "Maximum Offer"), which Maximum
Offer shall not exceed the Maximum Request.
(c) The Administrative Agent shall promptly give
notice by telephone (promptly confirmed in writing) to the Parent
and the applicable Borrower of all Bids received by the
Administrative Agent which comply in all material respects with
this Section prior to the Bid Submission Deadline. The ap-
plicable Borrower shall, in its sole discretion but subject to
Section 2.11(d), irrevocably accept or reject any such Bid (or
any Portion thereof) not later than 10:30 A.M. one Business Day
prior to the proposed Borrowing Date by notice to the
Administrative Agent by telephone (confirmed in writing in the
form of a Bid Accept/Reject Letter promptly the same day).
Promptly on the day of the Bid Submission Deadline, the Admin-
istrative Agent will give notice in the form of a Bid Loan
Confirmation to each Lender that submitted a Bid as to the
extent, if any, that such Lender's Bid shall have been accepted.
If the Administrative Agent fails to receive notice from the
applicable Borrower of its acceptance or rejection of any Bids at
or prior to 10:30 A.M. on the applicable day, all such Bids shall
be deemed to have been rejected by the applicable Borrower, and
the Administrative Agent will give to each Lender which submitted
a Bid notice of such rejection by telephone on such day.
(d) If the applicable Borrower accepts a Portion of a
proposed Bid Loan for a single Interest Period at the Bid Rate
57<PAGE>
provided therefor in a Lender's Bid, such Portion shall be in a
principal amount of $500,000 or such amount plus a whole multiple
of $100,000 in excess thereof (or approximately the Dollar
Equivalent thereof in the case of Alternate Currency Bid Loans),
subject to such lesser allocation as may be made pursuant to the
provisions of this subsection. The aggregate principal amount of
Bid Loans accepted by the applicable Borrower following Bids
responding to a Bid Request shall not exceed the Maximum Request.
The aggregate principal amount of Bid Loans accepted by the ap-
plicable Borrower pursuant to a Lender's Bid shall not exceed the
Maximum Offer therein contained. If the applicable Borrower
accepts any Bid Loans or Portion offered in any Bid, the
applicable Borrower must accept Bids (and Bid Loans and Portions
thereby offered) based exclusively upon the successively lowest
Bid Rates within each Interest Period and no other criteria. If
two or more Lenders submit Bids with identical Bid Rates for the
same Bid Interest Period and the applicable Borrower accepts any
thereof, the applicable Borrower shall, subject to the first
three sentences of this subsection, accept all such Bids as
nearly as possible in proportion to the amounts of such Lender's
respective Bids with identical Bid Rates for such Bid Interest
Period, provided, that if the amount of Bid Loans to be so
allocated is not sufficient to enable each such Lender to make
such Bid Loan (or Portions thereof) in an aggregate principal
amount of $500,000 or such amount plus a whole multiple of
$100,000 in excess thereof (or the Dollar Equivalent thereof in
the case of Alternate Currency Bid Loans), the applicable
Borrower shall round the Bid Loans (or Portions thereof) al-
located to such Lender or Lenders as the applicable Borrower
shall select as necessary to a minimum of $500,000 or such amount
plus a whole multiple of $100,000 in excess thereof (or the
Dollar Equivalent thereof in the case of Alternate Currency Bid
Loans).
(e) Each Lender which makes a Bid Loan shall notify
the Administrative Agent promptly of the making thereof (unless
the proceeds of such Bid Loan were advanced to the Administrative
Agent).
(f) All notices required by this Section shall be
given in accordance with Section 11.2.
(g) Each Bid Loan shall be due and payable on the
earlier of (x) the last day of the Interest Period applicable
thereto and (y) the Maturity Date.
L. Negotiated Rate Loans; Procedure
(a) If at any time any Borrower, any Lender and the
Parent shall have agreed that such Lender shall make a Negotiated
Rate Loan to such Borrower, such Borrower and the Parent shall
promptly execute and deliver to such Lender a Negotiated Rate
58<PAGE>
Confirmation Request, specifying (i) the proposed Borrowing Date,
which shall be a Business Day, (ii) the aggregate amount of the
requested Negotiated Rate Loan which shall not (A) exceed an
amount which, on the proposed Borrowing Date, and after giving
effect to the proposed Negotiated Rate Loan, would result in (x)
the Aggregate Credit Exposure exceeding the Aggregate Commitments
or (y) the Aggregate Credit Exposure attributable to all Loans
and Letters of Credit designated in Non-Core Currencies exceeding
$60,000,000, or (B) be less than $100,000 or such amount plus a
whole multiple of $50,000 in excess thereof (or approximately the
Dollar Equivalent thereof in the case of Alternate Currency
Negotiated Rate Loans), (iii) the applicable rate of interest
therefor (the "Negotiated Rate"), (iv) the Negotiated Rate In-
terest Period therefor and the last day of such Negotiated Rate
Interest Period, and (v) the Applicable Currency therefor. If
such Negotiated Rate Confirmation Request is in all respects sat-
isfactory to such Lender, it shall promptly sign a copy thereof
and deliver a copy thereof to such Borrower, the Parent and the
Administrative Agent (the "Negotiated Rate Confirmation").
(b) Each Lender which makes a Negotiated Rate Loan
shall notify the Administrative Agent promptly of the making
thereof (unless the proceeds of such Negotiated Rate Loan were
advanced to the Administrative Agent).
(c) All notices required by this Section shall be
given in accordance with Section 11.2.
(d) Each Negotiated Rate Loan shall be due and payable
on the earlier of (x) the last day of the Interest Period ap-
plicable thereto and (y) the Maturity Date.
M. Taxes
(a) Payments to Be Free and Clear. All payments by
each Borrower under the Loan Documents shall be made free and
clear of, and without any deduction or withholding for, any
Indemnified Tax. If any Credit Party or any other Person is
required by any law, rule, regulation, order, directive, treaty
or guideline to make any deduction or withholding (which
deduction or withholding would constitute an Indemnified Tax)
from any amount required to be paid by any Credit Party to or on
behalf of any Indemnified Tax Person under any Loan Document
(each a "Required Payment"):
(i) such Credit Party shall notify the Administra-
tive Agent and such Indemnified Tax Person of any such
requirement or any change in any such requirement as soon as such
Credit Party becomes aware of it;
(ii) such Credit Party shall pay such Indemnified
Tax before the date on which penalties attach thereto, such
59<PAGE>
payment to be made (if the liability to pay is imposed on such
Credit Party) for its own account or (if the liability is imposed
on such Indemnified Tax Person) on behalf of and in the name of
such Indemnified Tax Person;
(iii) such Credit Party shall pay to such Indem-
nified Tax Person an additional amount such that such Indemnified
Tax Person shall receive on the due date therefor an amount
equal to the Required Payment had no such deduction or
withholding been required; and
(iv) such Credit Party shall, within 30 days after
paying such Indemnified Tax, deliver to the Administrative Agent
and the applicable Indemnified Tax Person satisfactory evidence
of such payment to the relevant Governmental Authority.
(b) Other Indemnified Taxes. If an Indemnified Tax
Person or any affiliate thereof is required by any law, rule,
regulation, order, directive, treaty or guideline to pay any
Indemnified Tax (excluding an Indemnified Tax which is subject to
Section 2.13(a)) with respect to any sum paid or payable by any
Credit Party to such Indemnified Tax Person under the Loan
Documents:
(i) such Indemnified Tax Person shall notify such
Credit Party of any such payment of Indemnified Tax; and
(ii) such Credit Party shall pay to such Indem-
nified Tax Person the amount of such Indemnified Tax within 5
days of such notice.
(c) Tax on Indemnified Taxes. If any amounts are
payable by a Credit Party in respect of Indemnified Taxes pur-
suant to Section 2.13(a) or (b), such Credit Party agrees to pay
to the applicable Indemnified Tax Person, within 5 Business Days
of written request therefor, an amount equal to all Taxes imposed
with respect to such amounts as such Indemnified Tax Person shall
determine in good faith are payable by such Indemnified Tax
Person or any affiliate thereof in respect of such amounts and in
respect of any amounts paid to or on behalf of such Indemnified
Tax Person pursuant to this clause (c).
(d) Exception for Existing Taxes. No amount shall be
required to be paid to any Indemnified Tax Person under Section
2.13(a)(iii) or (b) with respect to an Indemnified Tax to the
extent that such Indemnified Tax would have been required to have
been paid under any law, rule, regulation, order, directive,
treaty or guideline in effect on the Effective Date.
(e) U.S. Tax Certificates. Each Lender that is or-
ganized under the laws of any jurisdiction other than the United
States or any political subdivision thereof shall deliver to the
60<PAGE>
Administrative Agent for transmission to the Parent, on or prior
to the first Borrowing Date (in the case of each Lender listed on
the signature pages hereof) or on the effective date of the
Assignment and Acceptance Agreement or master assignment and
acceptance agreement pursuant to which it becomes a Lender in
accordance with Section 11.1 or 11.7, (in the case of each other
Lender), and at such other times as may be necessary in the
determination of the Parent, any Credit Party or the Ad-
ministrative Agent (each in the reasonable exercise of its
discretion), such certificates, documents or other evidence,
properly completed and duly executed by such Lender (including,
without limitation, Internal Revenue Service Form 1001 or Form
4224) to establish that such Lender is not subject to deduction
or withholding of United States federal income tax under Section
1441 or 1442 of the Code or otherwise (or under any comparable
provisions of any successor statute) with respect to any payments
to such Lender of principal, interest, fees or other amounts
payable under the Loan Documents. No Credit Party shall be
required to pay any additional amount to any such Lender under
Section 2.13(a)(iii) if such Lender shall have failed to satisfy
the requirements of the immediately preceding sentence; provided
that if such Lender shall have satisfied such requirements on the
first Borrowing Date (in the case of each Lender listed on the
signature pages hereof) or on the effective date of the
Assignment and Acceptance Agreement or master assignment and
acceptance agreement pursuant to which it became a Lender (in the
case of each other Lender), nothing in this subsection shall
relieve any Credit Party of its obligation to pay any additional
amounts pursuant to Section 2.13(a)(iii) in the event that, as a
result of any change in applicable law (including, without
limitation, any change in the interpretation thereof), such
Lender is no longer properly entitled to deliver certificates,
documents or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described
in the immediately preceding sentence.
(f) Other Tax Certificates. Each Indemnified Tax
Person agrees to use reasonable efforts to deliver to any Credit
Party, promptly upon any request therefor from time to time by
such Credit Party, such forms, documents and information as may
be required by applicable law, regulation or treaty from time to
time and to file all appropriate forms to obtain a certificate or
other appropriate documents from the appropriate Governmental
Authorities to establish that payments made in respect of any
Alternate Currency Loan or Letter of Credit designated in an
Alternate Currency by such Credit Party can be made without (or
at a reduced rate of) withholding of Taxes, provided, however,
that if such Indemnified Tax Person is or becomes unable by
virtue of any applicable law, regulation or treaty, to establish
such exemption or reduction, such Credit Party shall nonetheless
remain obligated under Subsection 2.13(a) to pay the amounts
described therein, and provided further, that no Indemnified Tax
61<PAGE>
Person shall be required to take any action hereunder which, in
the sole discretion of such Indemnified Tax Person, would cause
such Indemnified Tax Person or any affiliate thereof to suffer a
material economic, legal or regulatory disadvantage.
(g) Adverse Tax Position.
(i) An "Excess Tax" shall be the excess of (x) the
Tax imposed, levied, collected, withheld or assessed by any
Governmental Authority without the United States from which a
payment is made by or on behalf of a Credit Party subject to an
Adverse Tax Position or in which such Credit Party or an
affiliate has an office or is deemed to be doing business, over
(y) the Tax which would be imposed, levied, collected, withheld
or assessed by such Governmental Authority, but for the existence
of such Adverse Tax Position.
(ii) An "Adverse Tax Position" with respect to a
Credit Party shall mean a position resulting from the lack of
adequate capitalization or other similar condition with respect
to such Credit Party which, under applicable law or applicable
treaty, results in higher Taxes on payments under the Loan
Documents than would otherwise be imposed.
(iii) All payments by each Borrower under the Loan
Documents shall be made free and clear of, and without any deduc-
tion or withholding for, any Excess Tax. If any Credit Party or
any other Person is required by any law, rule, regulation, order,
directive, treaty or guideline to make any deduction or with-
holding on account of any Tax from any Required Payment with
respect to any Indemnified Tax Person and if all or a portion of
such Tax represents Excess Tax:
(A) such Credit Party shall notify the Ad-
ministrative Agent and such Indemnified Tax Person of any such
requirement or any change in any such requirement as soon as such
Credit Party becomes aware of it;
(B) such Credit Party shall pay such Excess
Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on such
Credit Party) for its own account or (if the liability is imposed
on such Indemnified Tax Person) on behalf of and in the name of
such Indemnified Tax Person;
(C) such Credit Party shall pay to such In-
demnified Tax Person an additional amount such that such In-
demnified Tax Person shall receive on the due date therefor an
amount equal to the Required Payment had no such deduction or
withholding been required with respect to such Excess Tax; and
(D) such Credit Party shall, within 30 days
62<PAGE>
after paying such Excess Tax, deliver to the Administrative Agent
and the applicable Indemnified Tax Person satisfactory evidence
of such payment to the relevant Governmental Authority.
(iv) If an Indemnified Tax Person or any affiliate
thereof is required by any law, rule, regulation, order,
directive, treaty or guideline to pay any Excess Tax (excluding
Excess Tax which is subject to Section 2.13(g)(iii)) with respect
to any sum paid or payable by any Credit Party to such
Indemnified Tax Person under the Loan Documents:
(A) such Indemnified Tax Person shall notify
such Credit Party of any such payment of Excess Tax; and
(B) such Credit Party shall pay to such In-
demnified Tax Person the amount of such Excess Tax within 5
Business Days of such notice.
(v) If any amounts are payable by a Credit Party
in respect of Excess Tax pursuant to Section 2.13(g)(iii) or
(iv) such Credit Party agrees to pay to the applicable
Indemnified Tax Person, within 5 days of written request
therefor, an amount equal to all Taxes imposed with respect to
such amounts as such Indemnified Tax Person shall determine are
payable by such Indemnified Tax Person or any affiliate thereof
in respect of such amounts and in respect of any amounts paid to
or on behalf of such Indemnified Tax Person pursuant to this
clause (v).
N. Increased Costs, Illegality, etc.
(a) In the event that any Lender with respect to
clauses (ii) and (iii) below or the Administrative Agent, the
Reference Lender, or the applicable Lender, as the case may be,
with respect to clauses (i) and (iv) below shall have determined
(which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on the second Business Day immediately
preceding the making of any requested Eurodollar Advance,
Core Currency Euro Advance or Individual Currency Loan that,
by reason of any changes arising after the Effective Date
affecting the applicable interbank market, adequate and fair
means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of the
Eurodollar Rate, the Core Currency Euro Rate or the
Individual Currency Rate, as the case may be; or
(ii) at any time that such Lender has incurred in-
creased costs or reductions in the amounts received or
receivable hereunder with respect to any Fixed Rate Loan, in
each case by an amount such Lender deems to be material,
63<PAGE>
because of any change since the Effective Date (or in the
case of any Bid Loan, subsequent to acceptance by a Borrower
of such Bid Loan, and in the case of any Negotiated Rate
Loan, subsequent to the date of such Lender's execution of
the Negotiated Rate Confirmation for such Negotiated Rate
Loan) in any law, rule, regulation, order or guideline ap-
plicable to such Lender or the compliance by such Lender
with any request (whether or not having the force of law)
from any Governmental Authority made subsequent to the Ef-
fective Date (or in the case of any Bid Loan, subsequent to
acceptance by a Borrower of such Bid Loan, and, in the case
of any Negotiated Rate Loan, subsequent to the date of such
Lender's execution of the Negotiated Rate Confirmation for
such Negotiated Rate Loan) or in the interpretation or
administration thereof and including the introduction of any
new law, rule, regulation, order, guideline or request, such
as, for example, but not limited to: (A) a change in the ba-
sis of taxation of payment to any Lender of the principal
of or interest on such Fixed Rate Loan or any other amounts
payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the Tax on the Income of such
Lender), or (B) a change in official reserve (including any
marginal, emergency, supplemental, special or other reserve)
or similar requirements (except to the extent included in
the computation of the respective Eurodollar Rate, the Core
Currency Euro Rate, Swing Line Negotiated Rate, Negotiated
Rate, Individual Currency Rate or Bid Rate, as the case may
be), or any special deposit, assessment or similar re-
quirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its
Applicable Lending Office); or
(iii) at any time that the making or continuance
of any Fixed Rate Loan has been made (x) unlawful by any
law, rule, regulation or order or (y) impossible by compli-
ance by any Lender in good faith with any governmental
directive or request (whether or not having the force of
law); or
(iv) at any time that any Core Currency (other
than Dollars) or any Non-Core Currency, as the case may be,
is not available in sufficient amounts, as determined in
good faith by the Reference Lender in the case of such Core
Currency, and by the applicable Lender in the case of such
Non-Core Currency, to fund any borrowing of Alternate Cur-
rency Loans in such Core Currency or such Non-Core Currency,
as the case may be;
then, and in any such event, such Lender, in the case of clause
(ii) or (iii) above, or the Administrative Agent, the Reference
Lender or the applicable Lender, as the case may be, in the case
of clause (i) or (iv) above, shall promptly give notice (by
64<PAGE>
telephone confirmed in writing) to the Parent (on behalf of all
Borrowers) and, except for the Administrative Agent, to the
Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other
Lenders). Thereafter (w) in the case of clause (i) above, (A) in
the event that Eurodollar Advances, Core Currency Euro Advances
or Individual Currency Loans are so affected, Eurodollar
Advances, Core Currency Euro Advances or Individual Currency
Loans from such applicable Lender, as the case may be, shall no
longer be available until such time as the Administrative Agent,
the Reference Lender or such applicable Lender, as the case may
be, notifies the Parent and the Lenders that the circumstances
giving rise to such notice by the Administrative Agent, the
Reference Lender or such applicable Lender, as the case may be,
no longer exist, and any Notice of Borrowing or Notice of
Conversion given by any Borrower with respect to Eurodollar
Advances, Core Currency Euro Advances or Individual Currency
Loans to be made by such applicable Lender, as the case may be,
which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by the applicable Borrower and (B) in
the event that any Core Currency Euro Advance or Individual
Currency Loan is so affected, the interest rate for such Core
Currency Euro Advance or such Individual Currency Loan, as the
case may be, shall be determined on the basis provided in the
proviso to the definition of Core Currency Euro Rate or
Individual Currency Rate, as the case may be, (x) in the case of
clause (ii) above, the applicable Borrower shall pay to such
Lender, within 3 days of written demand therefor, such additional
amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender in
its reasonable discretion shall determine) as shall be required
to compensate such Lender for such increased costs or reductions
in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Lender, showing the basis
for the calculation thereof, submitted to such applicable
Borrower by such Lender in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties
hereto), (y) in the case of clause (iii) above, the applicable
Borrower shall take one of the actions specified in Section
2.14(b) and (z) in the case of clause (iv) above, Core Currency
Euro Advances in the affected Core Currency or Individual
Currency Loans from the applicable Lender in the affected Non-
Core Currency, as the case may be, shall no longer be available
until such time as the Reference Lender or such applicable
Lender, as the case may be, notifies the Parent (on behalf of all
Borrowers), the Administrative Agent and the Lenders that the
circumstances giving rise to the notice referred to above by the
Reference Lender or such applicable Lender, as the case may be,
to the Parent (on behalf of all Borrowers) and the Administrative
Agent no longer exists, and any Notice of Borrowing given by the
affected Borrower with respect to such Core Currency Euro
Advances or such Individual Currency Loans, as the case may be,
65<PAGE>
which have not yet been incurred shall be deemed rescinded by
such affected Borrower. Each of the Administrative Agent, the
Reference Lender and the Lenders agree that if it gives notice to
any Borrower of any of the events described in clause (i), (iii)
or (iv) above, it shall promptly notify the Parent (on behalf of
all Borrowers) and, in the case of any such Lender and the
Reference Lender, the Administrative Agent, if such event ceases
to exist. If any such event described in clause (iii) above with
respect to Eurodollar Advances, Core Currency Euro Advances or
Individual Currency Loans ceases to exist as to a Lender, the
obligations of such Lender, as the case may be, to make Euro-
dollar Advances, Core Currency Euro Advances or Individual
Currency Loans and to convert Eurodollar Advances to new
Eurodollar Advances or convert Core Currency Euro Advances to
new Core Currency Euro Advances on the terms and conditions
contained herein shall be reinstated.
(b) At any time that any Fixed Rate Loan is affected
by the circumstances described in Section 2.14(a)(ii) or (iii),
the applicable Borrower may (and in the case of an affected Fixed
Rate Loan by the circumstances described in Section 2.14(a)(iii)
shall) either (x) if the affected Fixed Rate Loan is then being
made initially or pursuant to a conversion, cancel the respective
borrowing or conversion by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that
the Parent was notified by the affected Lender or the
Administrative Agent pursuant to Section 2.14(a)(ii) or (iii) or
(y) if the affected Fixed Rate Loan is then outstanding, upon at
least three Business Days' written notice to the Administrative
Agent and the affected Lender, (A) in the case of a Eurodollar
Advance, require the affected Lender to convert such Eurodollar
Advance into an ABR Advance as of the end of the Interest Period
then applicable to such Eurodollar Advance or, if earlier, as
soon as practicable within the time required by law and (B) in
the case of a Core Currency Euro Advance, Swing Line Negotiated
Rate Advance, Negotiated Rate Loan, Individual Currency Loan or
Bid Loan, take such action as the affected Lender may reasonably
request with a view to minimizing the obligations of such Bor-
rower under Section 2.15.
(c) If any Lender determines that after the Effective
Date the introduction of or any change in any applicable law,
rule, regulation, order, guideline, directive or compliance by
such Lender or any corporation controlling such Lender with any
request (whether or not having the force of law) from any
Governmental Authority concerning capital adequacy, or any change
in interpretation or administration thereof by any Governmental
Authority, in each case made subsequent to the date hereof, will
have the effect of reducing the rate of return on the capital
required to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's
Commitment or Individual Currency Commitments hereunder or its
66<PAGE>
obligations under the Loan Documents to a level below that which
such Lender or such corporation could have achieved but for such
application or compliance (taking into account such Lender's or
such corporation's policies with respect to capital adequacy) by
an amount deemed by such Lender to be material, then each of the
Borrowers to the extent of its Proportionate Share and the Parent
severally agrees to pay such to such Lender, within 3 Business
Days of its written demand therefor, such additional amounts as
shall be required to compensate such Lender or such other
corporation for the increased cost to such Lender or such other
corporation or the reduction in the rate of return to such Lender
or such other corporation as a result of such reduction. In de-
termining such additional amounts, each Lender will act reason-
ably and in good faith and will use averaging and attribution
methods which are reasonable, provided that such Lender's rea-
sonable good faith determination of compensation owing under this
Section 2.14(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender,
upon determining that any additional amounts will be payable
pursuant to this Section 2.14(c), will give prompt written notice
thereof to the Parent (on behalf of all Borrowers), which notice
shall show the basis for calculation of such additional amounts.
(d) Each Lender shall notify the Parent (on behalf of
all Borrowers) of any event occurring after the Effective Date
entitling such Lender to compensation under this Section 2.14 as
promptly as practicable, but in any event within 120 days after
the officer having primary responsibility for this Agreement
obtains actual knowledge thereof, provided that no such notice
shall be required if such Lender has determined not to seek
compensation under this Section 2.14 as a result of such event.
Each Lender will furnish to each Borrower a certificate setting
forth the basis and amount of each request by such Lender for
compensation under this Section 2.14. Determinations and
allocations by any Lender for purposes of this Section 2.14 on
its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in
respect of Loans, and of the amounts required to compensate such
Lender under this Section 2.14 shall be prima facie evidence of
such determinations and allocations.
(e) Notwithstanding the foregoing, no Lender shall be
entitled to any compensation described in Section 2.14 unless, at
the time it requests such compensation, it is the policy or
general practice of such Lender to request compensation for
comparable costs in similar circumstances under comparable
provisions of other credit agreements for comparable customers
unless specific facts or circumstances applicable to any Borrower
or the transactions contemplated by the Loan Documents would
alter such policy or general practice, provided that nothing in
this Section 2.14(e) shall preclude a Lender from waiving the
collection of similar costs from one or more of its other
67<PAGE>
customers.
(f) If any Lender fails to give the notice described
in Section 2.14(d) within 90 days after it obtains such actual
knowledge of the event required to be described in such notice,
such Lender shall, with respect to any compensation that would
otherwise be owing to such Lender under this Section 2.14, only
be entitled to payment for increased costs incurred from and
after the date that such Lender does give such notice.
O. Compensation
Each Borrower shall compensate each Lender, within 3
days of its written demand therefor (which demand shall set forth
the basis for requesting such compensation), for all reasonable
losses, expenses and liabilities, including any loss, expense or
liability (including those related to currency exchange) incurred
by reason of the liquidation or reemployment of deposits or other
funds required by such Lender to fund its Fixed Rate Loans but
excluding any loss of anticipated profit which such Lender may
sustain: (i) if for any reason, a borrowing of, or conversion
from or into a Fixed Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing, a Notice of Conversion, a
Negotiated Rate Confirmation or a Bid accepted by a Borrower;
(ii) if any repayment (including any repayment made pursuant to
Section 2.10 or as a result of an acceleration of the Loans pur-
suant to Section 9) or conversion of any of such Borrower's Fixed
Rate Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of
any of such Borrower's Fixed Rate Loans is not made on any date
specified in a notice of prepayment given by such Borrower; or
(iv) as a consequence of (x) any other default by such Borrower
to repay its Loans when required by the terms of this Agreement
or (y) any election made pursuant to Section 2.14(b) or 11.1(b).
P. Change of Applicable Lending Office and Applicable
Payment Office
(a) With respect to any Loan of any Lender or any
Letter of Credit, such Lender agrees that on the occurrence of
any event giving rise to the operation of Section 2.13, Section
2.14(a)(ii) or (iii), Section 2.14(c), Section 2.14(d) or Section
2.22 with respect to such Loan or such Letter of Credit, it will,
if requested by the applicable Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to
designate another Applicable Lending Office or Applicable Payment
Office, as the case may be, for such Loan or such Letter of
Credit affected by such event, provided that such designation is
made on such terms that such Lender and its Applicable Lending
Office or Applicable Payment Office, as the case may be, suffer
no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the op-
68<PAGE>
eration of such Section. Nothing in this Section shall affect or
postpone any of the obligations of any Borrower or the right of
any Lender provided in Sections 2.13, 2.14, 2.15 and 2.22.
(b) Each Lender shall have the right at any time and
from time to time to transfer any of its Loans to a different
office, provided that such Lender shall promptly notify the
Administrative Agent and the Parent (on behalf of all Borrowers)
of any such change of office. Such office shall thereupon become
such Lender's Applicable Lending Office for such Loan provided,
however, that no such Lender shall be entitled to receive any
greater amount under Section 2.13, Section 2.14(a)(ii) or (iii),
Section 2.14(c) or Section 2.22 as a result of a transfer of any
such Loans to a different office of such Lender than it would be
entitled to immediately prior thereto unless such claim would
have arisen even if such transfer had not occurred.
Q. Survival of Certain Obligations
The obligations of the Borrowers under Sections 2.13,
2.14, 2.15, 2.22, 11.5 and 11.10 shall survive the termination of
the Aggregate Commitments, the Swing Line Commitment, the
Individual Currency Commitments, the Letter of Credit Commitment
the payment of the Loans, the reimbursement obligations in re-
spect of the Letters of Credit and all other amounts payable
under the Loan Documents.
R. Use of Proceeds
The proceeds of the Loans shall be used to refinance
the Indebtedness set forth on Schedule 5.8 and for general
corporate purposes of the Parent and its Subsidiaries. The uses
to which the proceeds of the Loans are put shall conform with the
provisions of Section 4.11.
S. Letter of Credit Sub-Facility
(a) Subject to the terms and conditions of this
Agreement, the Issuing Bank agrees, in reliance on the agreement
of the other Lenders set forth in Section 2.20, to issue standby
letters of credit in Core Currencies (the "Letters of Credit";
each a "Letter of Credit") during the Commitment Period for the
account of one or more of the Letter of Credit Applicants,
provided, however, that, at the request of any Letter of Credit
Applicant, the Issuing Bank may, in its sole discretion, issue
one or more Letters of Credit for the account of such Letter of
Credit Applicant in one or more Non-Core Currencies. The Letter
of Credit Exposure at any one time outstanding shall not exceed
the lesser of (i) the amount of the Letter of Credit Commitment
and (ii) the excess, if any, of the sum of the Aggregate Com-
mitments over the sum of the aggregate outstanding principal
amount of all Loans (determined on the basis of the Dollar
69<PAGE>
Equivalent for each outstanding Alternate Currency Loan). The
Letter of Credit Exposure at any one time outstanding attribut-
able to all Letters of Credit issued in Non-Core Currencies shall
not exceed the excess, if any, of $60,000,000 over the Aggregate
Credit Exposure at such time attributable to all Loans designated
in Non-Core Currencies. The sum of the aggregate principal
amount of the Individual Currency Loans of all Lenders at any one
time outstanding in any Non-Core Currency and the Letter of
Credit Exposure at such time attributable to all Letters of
Credit issued in such Non-Core Currency (determined on the basis
of the Dollar Equivalent of each such Individual Currency Loan
and each such Letter of Credit) shall not exceed $5,000,000.
Each Letter of Credit shall have an expiration date which shall
not exceed the earlier of (x) twelve months from the date of
issuance thereof and (y) 30 days immediately preceding the Matu-
rity Date. No Letter of Credit shall be issued, and no amendment
to any Letter of Credit shall be issued which would increase the
stated amount or extend the expiration date of such Letter of
Credit, (i) if the Administrative Agent or any Lender by notice
to the Administrative Agent and the applicable Letter of Credit
Applicant and the Parent no later than 1:00 P.M. one Business Day
prior to the requested date of issuance of such Letter of Credit
or amendment, shall have determined that any of the applicable
conditions set forth in Sections 5 and 6 have not been satisfied
and such conditions remain unsatisfied as of the requested time
of issuing such Letter of Credit or amendment or (ii) to the
extent that immediately after giving effect thereto the Aggregate
Credit Exposure would exceed the Aggregate Commitments (each a
"Non-Issuance Event").
(b) Each Letter of Credit shall be issued for the
account of the applicable Letter of Credit Applicant for general
corporate purposes of such Letter of Credit Applicant and its
Subsidiaries. Such Letter of Credit Applicant and the Parent
shall give the Administrative Agent a Letter of Credit Request
for the issuance of such Letter of Credit by 11:00 A.M. three
Business Days prior to the requested date of issuance. Such
Letter of Credit Request shall be executed by such Letter of
Credit Applicant and the Parent, and shall specify (i) the
beneficiary of such Letter of Credit and the obligations of such
Letter of Credit Applicant or any of its Subsidiaries, as the
case may be, in respect of which such Letter of Credit is to be
issued, (ii) such Letter of Credit Applicant's proposal as to the
conditions under which a drawing may be made under such Letter of
Credit and the documentation to be required in respect thereof,
(iii) the maximum amount to be available under such Letter of
Credit, (iv) the requested date of issuance and (v) the
applicable Currency. Upon receipt of such Letter of Credit Re-
quest from such Letter of Credit Applicant and the Parent, the
Administrative Agent shall promptly notify the Issuing Bank and
each other Lender thereof. Each Letter of Credit shall be in
form and substance reasonably satisfactory to the Issuing Bank,
70<PAGE>
and adequate and fair means in the sole discretion of the Issuing
Bank shall exist for the issuance thereof, with such provisions
with respect to the conditions under which a drawing may be made
thereunder and the documentation required in respect of such
drawing as the Issuing Bank shall reasonably require and as may
be acceptable to such Letter of Credit Applicant and the Parent.
Such Letter of Credit shall be used solely for the purposes de-
scribed therein and herein. The Issuing Bank shall, on the pro-
posed date of issuance and subject to the other terms and con-
ditions of this Agreement, issue such Letter of Credit.
(c) Each payment by the Issuing Bank of a draft drawn
under a Letter of Credit designated in a Core Currency shall give
rise to an obligation on the part of the applicable Letter of
Credit Applicant to reimburse the Issuing Bank immediately for
the amount thereof at its Applicable Payment Office in such Core
Currency.
(d) Each payment by the Issuing Bank of a draft drawn
under a Letter of Credit designated in a Non-Core Currency shall
give rise to an obligation on the part of the applicable Letter
of Credit Applicant to reimburse the Issuing Bank immediately for
the amount thereof in Dollars, at such office as the Issuing Bank
shall designate to the Administrative Agent, the Parent and such
Letter of Credit Applicant, in an amount based upon the all-in
cost of funds in Dollars of the Issuing Bank to fund such draft
(each a "Dollar Reimbursement Amount"). In connection with each
obligation of a Letter of Credit Applicant to pay a Dollar Reim-
bursement Amount under this Section 2.19(d), the Issuing Bank
shall deliver to such Letter of Credit Applicant, the Parent and
the Administrative Agent a written statement setting forth such
Dollar Reimbursement Amount. The Issuing Bank's determination of
such Dollar Reimbursement Amount shall be conclusive absent
manifest error.
T. Letter of Credit Participation and Funding Commitments
(a) Each Lender hereby unconditionally and ir-
revocably, severally for itself only and without any notice to or
the taking of any action by such Lender, takes from time to time
an undivided participating interest in the obligations of the
Issuing Bank under and in connection with each Letter of Credit
in an amount equal to such Lender's Availability Percentage at
such time of the amount of such Letter of Credit. Each Lender
from time to time shall be liable to the Issuing Bank for its
Availability Percentage at such time of the unreimbursed amount
of any draft drawn and honored under each Letter of Credit. Each
Lender from time to time shall also be liable for an amount equal
to the product of its Availability Percentage at such time and
any amounts paid by the applicable Letter of Credit Applicant
pursuant to Section 2.21 that are subsequently rescinded or
avoided, or must otherwise be restored or returned. Such li-
71<PAGE>
abilities shall be unconditional and without regard to the
occurrence of any Default or Event of Default or the compliance
by the Parent and the Borrowers with any of their respective
obligations under the Loan Documents or any other circumstances.
(b) The Administrative Agent will promptly notify each
Lender (which notice shall be promptly confirmed in writing) of
the date and the amount of any draft presented under any Letter
of Credit with respect to which full reimbursement of payment is
not made by the applicable Letter of Credit Applicant as provided
in Sections 2.19(c) or 2.19(d), as the case may be, and forthwith
upon receipt of such notice, and provided that no Non-Issuance
Event shall have occurred and be continuing with respect to such
Letter of Credit, such Lender (other than the Issuing Bank in its
capacity as a Lender) shall make available to the Administrative
Agent for the account of the Issuing Bank its Availability Per-
centage at such time of the amount of such unreimbursed draft or,
if such Letter of Credit is designated in a Non-Core Currency,
the applicable Dollar Reimbursement Amount, at the Applicable
Payment Office of the Administrative Agent in the applicable Core
Currency or, if such Letter of Credit is designated in a Non-Core
Currency, at the applicable office designated by the Administra-
tive Agent pursuant to Section 2.19(d) in Dollars, and, in each
case, in immediately available funds. The Administrative Agent
shall distribute the payments made by each Lender (other than the
Issuing Bank in its capacity as a Lender) pursuant to the
immediately preceding sentence to the Issuing Bank promptly upon
receipt thereof in like funds as received. Each Lender shall
indemnify and hold harmless the Administrative Agent and the
Issuing Bank from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments,
demands, costs and expenses (including reasonable attorneys' fees
and expenses) resulting from any failure on the part of such
Lender to provide, or from any delay in providing, the
Administrative Agent with such Lender's Availability Percentage
of the amount of any payment made by the Issuing Bank under a
Letter of Credit in accordance with this clause (b) above (except
in respect of losses, liabilities or other obligations suffered
by the Issuing Bank resulting from the gross negligence or
willful misconduct of the Issuing Bank or the Administrative
Agent, as the case may be). If a Lender does not make available
to the Administrative Agent when due such Lender's Availability
Percentage at such time of any unreimbursed payment made by the
Issuing Bank under a Letter of Credit (other than payments made
by the Issuing Bank by reason of its gross negligence or willful
misconduct), such Lender shall be required to pay interest to the
Administrative Agent for the account of the Issuing Bank on such
Lender's Availability Percentage at such time of such payment at
a rate of interest per annum equal to the Federal Funds Rate (or,
in the case of any Letter of Credit designated in a Core Currency
(other than Dollars), at a rate based upon the all-in cost of
funds for the applicable Non-Core Currency) from the date such
72<PAGE>
Lender's payment is due until the date such payment is received
by the Administrative Agent. The Administrative Agent shall
distribute such interest payments to the Issuing Bank upon
receipt thereof in like funds as received.
(c) Whenever the Administrative Agent or the Issuing
Bank is reimbursed by any Letter of Credit Applicant, for the
account of the Issuing Bank, for any payment under a Letter of
Credit and such payment relates to an amount previously paid by a
Lender in respect of its Availability Percentage of the amount of
such payment under such Letter of Credit, the Administrative
Agent or the Issuing Bank, as the case may be, will promptly pay
over such payment to such Lender.
U. Absolute Obligation with respect to Letter of Credit
Payments
The obligation of each Letter of Credit Applicant to
reimburse the Administrative Agent for the account of the Issuing
Bank in respect of each Letter of Credit issued for the account
of such Letter of Credit Applicant for each payment under or in
respect of such Letter of Credit shall be absolute and un-
conditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which such Letter
of Credit Applicant or any of its Subsidiaries may have or have
had against the beneficiary of such Letter of Credit, the
Administrative Agent, the Issuing Bank, as issuer of such Letter
of Credit, any Lender, the Swing Line Lender or any other Person,
including any defense based on the failure of any drawing to
conform to the terms of such Letter of Credit, any drawing
document proving to be forged, fraudulent or invalid, or the
legality, validity, regularity or enforceability of such Letter
of Credit.
V. Increased Costs Based on Letters of Credit
Without limiting the provisions of Section 2.14, if any
law, rule, regulation, order, guideline or request or any change
in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof or GAAP shall
either (a) impose, modify or make applicable any reserve, special
deposit, assessment or similar requirement against any Letter of
Credit issued or participated in by any Lender, or (b) impose on
the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, any other condition regarding such Letter of
Credit (except for imposition of, or changes in the rate of, the
Tax on the Income of the Administrative Agent, the Issuing Bank
or such Lender, as the case may be) and the result of any event
referred to in clause (a) or (b) above shall be to increase the
cost to the Issuing Bank (or any successor thereto as issuer of
such Letter of Credit) of issuing or maintaining such Letter of
Credit or the cost to any Lender of its obligations pursuant to
73<PAGE>
Section 2.20, or the cost to the Administrative Agent of perform-
ing its functions hereunder with respect to such Letter of
Credit, in any case by an amount which the Administrative Agent,
the Issuing Bank or such Lender, as the case may be, deems mate-
rial, then, upon demand by the Administrative Agent, the Issuing
Bank or such Lender, as the case may be, the applicable Letter of
Credit Applicant shall immediately pay to the Administrative
Agent, the Issuing Bank or such Lender, as the case may be, from
time to time as specified by the Administrative Agent, the
Issuing Bank or such Lender, as the case may be, additional
amounts which shall be sufficient to compensate the
Administrative Agent, the Issuing Bank or such Lender, as the
case may be, for such increased cost. A statement in reasonable
detail as to such increased cost incurred by the Administrative
Agent, the Issuing Bank or such Lender, as the case may be, as a
result of any event mentioned in clauses (a) or (b) above, sub-
mitted by the Administrative Agent, the Issuing Bank or such
Lender, as the case may be, to such Letter of Credit Applicant
shall be conclusive, absent manifest error, as to the amount
thereof.
W. Borrower Addenda
Provided that no Default or Event of Default has
occurred and is continuing, the Parent may direct that any of its
wholly-owned Subsidiaries which is not then a Borrower become a
Borrower by submitting a Borrower Addendum to the Administrative
Agent with respect to such Subsidiary duly executed by each of
the Parent and such Subsidiary together with a certificate, dated
the date of such Borrower Addendum of the Secretary or Assistant
Secretary of such Subsidiary (i) attaching a true and complete
copy of the resolutions of its Board of Directors and of all
documents evidencing other necessary corporate action (in form
and substance satisfactory to the Administrative Agent) taken by
it to authorize such Borrower Addendum, the Loan Documents and
the transactions contemplated thereby, (ii) attaching a true and
complete copy of its certificate of incorporation, by-laws or
other organizational documents, (iii) setting forth the incum-
bency of its officer or officers who may sign the Borrower
Addendum, including therein a signature specimen of such officer
or officers, (iv) an opinion of foreign local counsel to such
Subsidiary in all respects reasonably satisfactory to the Admin-
istrative Agent and (v) attaching a certificate of good standing
(or equivalent) issued by the jurisdiction of its incorporation.
If any such document is not in English, such document shall be
accompanied by a certified English translation thereof. Upon
receipt of a Borrower Addendum and the supporting documentation
referred to above, the Administrative Agent shall confirm such
Borrower Addendum by signing a copy thereof and shall deliver a
copy thereof to the Parent and each Lender. Thereupon the
Subsidiary which executed such Borrower Addendum shall become a
"Borrower" hereunder. In the event that such additional Borrower
74<PAGE>
is not a corporation organized under the laws of a jurisdiction
in which any other Borrower is organized (and whose principal
office is not located in a jurisdiction in which any other
Borrower's principal office is located), this Agreement and the
other Loan Documents will be deemed amended by adding definitions
comparable to the definitions applicable to each other Subsidiary
Borrower, such definitions to be as set forth in the applicable
Borrower Addendum.
X. Records
(a) Lender's Records. Each Lender will note on its
internal records with respect to each Loan made by it (i) the
date and amount of such Loan, (ii) whether such Loan is a Re-
volving Loan, Swing Line Loan, Individual Currency Loan, Nego-
tiated Rate Loan or Bid Loan, (iii) the identity of the Borrower
to whom such Loan was made, (iv) the interest rate (other than in
the case of an ABR Advance), Individual Currency Rate, Negotiated
Rate or Bid Rate and Interest Period, if applicable, applicable
to such Loan and (v) each payment and prepayment of the principal
thereof.
(b) Administrative Agent's Records. The Administrative
Agent shall keep records regarding the Loans, the Letters of
Credit and this Agreement in accordance with its customary
procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the
records maintained pursuant to subsections (a) and (b) above
shall, to the extent not prohibited by applicable law, be prima
facie evidence of the existence and amount of the obligations of
the Parent and each Borrower recorded therein; provided, however,
that the failure of the Administrative Agent or any Lender, as
the case may be, to make any notation on its records shall not
affect the Parent's or the respective Borrower's obligations in
respect of the Loans, the Letters of Credit or the Loan
Documents.
Y. Replacement of Lender
If (i) any Borrower is obligated to pay to any Lender
any amount under Section 2.13(a), (b) or (c) and such payment is
attributable solely to any change since the Effective Date (in
the case of each Lender listed on the signature pages hereof) or
since the effective date of the Assignment and Acceptance
Agreement pursuant to which it became a Lender (in the case of
each other Lender) in any applicable law, rule, regulation,
order, directive, treaty or guideline (whether or not having the
force of law) or in the interpretation or administration thereof
(including the introduction of any new law, rule, regulation,
order, directive, treaty or guideline), (ii) any Lender shall
have failed to make available a Loan on the date on which and in
75<PAGE>
the amount in which it was obligated to do so and shall not have
cured such failure within three Business Days or (iii) any Lender
shall have demanded any payment under Section 2.14 or excused
itself from funding a Loan pursuant to Section 2.14, the Company
shall have the right, in accordance with the requirements of
Section 11.7(b), if no Default or Event of Default shall exist to
replace up to two such Lenders (each a "Replaced Lender") with
one or more other assignees (each, a "Replacement Lender"),
reasonably acceptable to the Swing Line Lender and the Issuing
Bank, provided that (I) at the time of any replacement pursuant
to this Section, the Replacement Lender shall enter into one or
more Assignment and Acceptance Agreements pursuant to Section
11.7(b) (with the Assignment Fee payable pursuant to said Section
11.7(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith,
shall pay to (w) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans of the Replaced
Lender, (B) an amount equal to all drawings on all Letters of
Credit that have been funded by (and not reimbursed to) such
Replaced Lender, together with all then unpaid interest with
respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced
Lender pursuant to Sections 3.1 and 3.2, (x) the Issuing Bank an
amount equal to such Replaced Lender's Commitment Percentage of
all drawings (which at such time remains an unpaid drawing) to
the extent such amount was not theretofore funded by such
Replaced Lender, (y) the Swing Line Lender an amount equal to
such Replaced Lender's Commitment Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by
such Replaced Lender and (z) the Administrative Agent an amount
equal to all amounts owed by such Replaced Lender to the
Administrative Agent under this Agreement, including, without
limitation, an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, a
corresponding amount of which was made available by the
Administrative Agent to the applicable Borrower(s) pursuant to
Section 2.4(e) and which has not been repaid to the
Administrative Agent by such Replaced Lender or the applicable
Borrower(s) and (II) all obligations of the Borrowers owing to
the Replaced Lender (other than those specifically described in
clause (I) above in respect of which the assignment purchase
price has been, or is concurrently being, paid) shall be paid in
full to such Replaced Lender concurrently with such replacement.
Upon the execution of the respective Assignment and Acceptance
Agreements and the payment of amounts referred to in clauses (i)
and (ii) of this Section 2.25, the Replacement Lender shall
become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to in-
demnification provisions under this Agreement (including, without
76<PAGE>
limitation, Sections 2.13, 2.14, 2.15, 2.22, 11.5 and 11.10),
which shall survive as to such Replaced Lender.
III. FEES
A. Facility Fee
The Parent agrees to pay to the Administrative Agent,
for the account of the Lenders in accordance with each Lender's
Commitment Percentage, a fee (the "Facility Fee"), for each day
from and after the Effective Date, equal to the product of (x)
the Aggregate Commitments in effect as at the end of such day or,
if no Commitments then exist, the Aggregate Commitments on the
last day on which Commitments did exist, and (y) the applicable
percentage set forth below based upon the Pricing Level in effect
as at the end of such day:
<TABLE>
<CAPTION>
Pricing Level Facility Fee Percentage
---------------- -----------------------
<S> <C>
Pricing Level I 0.1000%
Pricing Level II 0.1500
Pricing Level III 0.1750
Pricing Level IV 0.2000
Pricing Level V 0.3000.
</TABLE>
The Facility Fee shall be (i) calculated on the basis of a
360-day year for the actual number of days elapsed, (ii) payable
quarterly in arrears on each Quarterly Payment Date, commencing
on the first such day following the Effective Date, and on the
date that the Aggregate Commitments shall expire or otherwise
terminate (or in the event that the Aggregate Commitments have
expired or otherwise terminated, on the date that the Aggregate
Credit Exposure has been reduced to $0).
B. Letter of Credit Commissions
The Parent agrees to pay to the Administrative Agent,
for the account of the Lenders, commissions (the "Letter of
Credit Commissions") with respect to the issued and outstanding
Letters of Credit, for each day from and after the Effective
Date, equal to, with respect to each Lender, the product of (x)
the Letter of Credit Exposure as at the end of such day and (y)
the Availability Percentage of such Lender as at the end of such
day multiplied by (z) the applicable percentage set forth below
based upon the Pricing Level in effect as at the end of such day:
77<PAGE>
<TABLE>
<CAPTION>
Letter of Credit
Pricing Level Commission Percentage
------------------ -----------------------
<S> <C>
Pricing Level I 0.2000%
Pricing Level II 0.2700%
Pricing Level III 0.2750%
Pricing Level IV 0.4000%
Pricing Level V 0.4000%
</TABLE>
The Letter of Credit Commissions shall be (i) calculated on
the basis of a 360-day year for the actual number of days
elapsed, (ii) payable quarterly in arrears on each Quarterly
Payment Date and on the date that the Letter of Credit Commit-
ments shall expire and the Letter of Credit Exposure is $0, and
(iii) nonrefundable.
C. Administrative Agent's and Issuing Bank's Fees
(a) The Parent agrees to pay to the Administrative
Agent, for its own account, such other fees as have been agreed
to in writing from time to time by the Parent and the
Administrative Agent.
(b) The Parent agrees to pay to the Issuing Bank, for
its own account, such other fees as have been agreed to in
writing from time to time by the Parent and the Issuing Bank.
IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and
the Lenders to enter into this Agreement and to make the Loans,
the Swing Line Lender to make the Swing Line Loans and the
Lenders to participate therein, and the Issuing Bank to issue
the Letters of Credit and the Lenders to participate therein, the
Parent and the Borrowers make the following representations and
warranties to the Administrative Agent, the Issuing Bank, the
Swing Line Lender and the Lenders:
A. Subsidiaries; Capital Stock
As of the date of this Agreement, the
Parent has only the Subsidiaries set forth on, and the autho-
rized, issued and outstanding capital stock of the Parent and
each such Subsidiary (or partnership or other interests, as the
case may be) is as set forth on, Schedule 4.1. The shares of, or
partnership or other interests in, each Subsidiary of the Parent
are owned beneficially and of record by the Parent or another
78<PAGE>
Subsidiary of the Parent, are free and clear of all Liens except
as otherwise permitted by Section 8.3, and are duly authorized,
validly issued, fully paid and nonassessable except, in the case
of any Subsidiary organized under the laws of the State of New
York, for any liability that may arise under the provisions of
Section 630 of the Business Corporation Law of the State of New
York. As of the date of this Agreement, except as set forth on
Schedule 4.1, (a) neither the Parent nor any of its Subsidiaries
has issued any securities convertible into, or options or war-
rants for, any common or preferred equity securities thereof, (b)
there are no agreements, voting trusts or understandings binding
upon the Parent or any of its Subsidiaries with respect to the
voting securities of the Parent or any of its Subsidiaries or
affecting in any manner the sale, pledge, assignment or other
disposition thereof, including any right of first refusal, op-
tion, redemption, call or other right with respect thereto,
whether similar or dissimilar to any of the foregoing, and (c)
the Parent owns, directly or indirectly, all of the outstanding
capital stock of each of its Subsidiaries.
B. Existence and Power
Each of the Parent and each of its
Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, has
all requisite power and authority to own its Property and to
carry on its business as now conducted, and is in good standing
and authorized to do business in each jurisdiction in which the
failure so to qualify could reasonably be expected to have a
Material Adverse effect.
C. Authority
Each of the Parent and each of its
Subsidiaries has full power and authority to enter into, execute,
deliver and perform the terms of the Loan Documents to which it
is a party, all of which have been duly authorized by all proper
and necessary corporate or partnership action, as the case may
be, and are in full compliance with its certificate of incorpora-
tion and by-laws or partnership agreement, as the case may be.
No consent or approval of, or other action by, shareholders of
the Parent, any Borrower, any Governmental Authority or any other
Person, which has not already been obtained, is required to
authorize in respect of the Parent or any of its Subsidiaries, or
is required in connection with the execution, delivery and per-
formance by the Parent and each of its Subsidiaries of, the Loan
Documents to which it is a party, or is required as a condition
to the enforceability against the Parent or such Subsidiary of
the Loan Documents to which it is a party.
D. Binding Agreement
79<PAGE>
The Loan Documents constitute the valid
and legally binding obligations of the Parent and each of its
Subsidiaries to the extent the Parent or such Subsidiary, as the
case may be, is a party thereto, enforceable in accordance with
their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by equitable principles relating
to the availability of specific performance as a remedy and
except to the extent that indemnification obligations may be
limited by federal or state securities laws or public policy
relating thereto.
E. Litigation
Except as set forth on Schedule 4.5, there
are no actions, suits, arbitration proceedings or claims (whether
purportedly on behalf of the Parent, any of its Subsidiaries or
otherwise) pending or, to the knowledge of the Parent and the
Borrowers, threatened against the Parent or any of its Sub-
sidiaries, or maintained by the Parent or any of its Subsid-
iaries, or which may affect the Property of the Parent or any of
its Subsidiaries, at law or in equity, before any Governmental
Authority which could reasonably be expected to have a Material
Adverse effect. There are no proceedings pending or, to the
knowledge of the Parent and the Borrowers, threatened against the
Parent or any of its Subsidiaries (a) which call into question
the validity or enforceability of, or otherwise seek to
invalidate any Loan Document, or (b) which might, individually or
in the aggregate, materially and adversely affect any of the
transactions contemplated by any Loan Document.
F. No Conflicting Agreements
(a) Neither the Parent nor any of its
Subsidiaries is in default under any agreement to which it is a
party or by which it or any of its Property is bound the effect
of which could reasonably be expected to have a Material Adverse
effect. No notice to, or filing with, any Governmental Authority
is required for the due execution, delivery and performance by
the Parent or any of its Subsidiaries of the Loan Documents to
which it is a party (except those notices or filings which have
already been made).
(b) No provision of any statute, rule,
regulation, judgment, decree or order, or any existing material
mortgage, indenture, contract or agreement, in each case binding
on the Parent or any of its Subsidiaries or affecting the
Property of the Parent or any of its Subsidiaries conflicts with,
or requires any consent which has not already been obtained
under, or would in any way prohibit the execution, delivery or
performance by the Parent or any of its Subsidiaries of the terms
80<PAGE>
of, any Loan Document. The execution, delivery or performance by
the Parent and each of its Subsidiaries of the terms of each Loan
Document to which it is a party will not constitute a default
under, or result in the creation or imposition of, or obligation
to create, any Lien upon the Property of the Parent or any of its
Subsidiaries pursuant to the terms of any such mortgage, in-
denture, contract or agreement which defaults or Liens,
individually or in the aggregate, would have or result in a
Material Adverse effect.
G. Taxes
The Parent and each of its Subsidiaries
has filed or caused to be filed all tax returns, and has paid, or
has made adequate provision for the payment of, all taxes shown
to be due and payable on said returns or in any assessments made
against them, the failure of which to file or pay could rea-
sonably be expected to have a Material Adverse effect, and no tax
Liens have been filed against the Parent or any of its
Subsidiaries and no claims are being asserted with respect to
such taxes which are required by GAAP (as in effect on the Effec-
tive Date) to be reflected in the Financial Statements and are
not so reflected therein. The charges, accruals and reserves on
the books of the Parent and each of its Subsidiaries with respect
to all Federal, state, local, foreign and other taxes are con-
sidered by the management of the Parent and the Borrowers to be
adequate, and neither the Parent nor any Borrower knows of any
unpaid assessment which is or might be due and payable against it
or any of its Subsidiaries or any Property of the Parent or any
of its Subsidiaries, except such thereof as are being contested
in good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set aside in
accordance with GAAP.
H. Compliance with Applicable Laws; Filings
Neither the Parent nor any of its
Subsidiaries is in default with respect to any judgment, order,
writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a
Material Adverse effect. The Parent and each of its Subsidiaries
is complying with all applicable statutes, rules and regulations
of all Governmental Authorities, a violation of which could rea-
sonably be expected to have a Material Adverse effect. The
Parent and each of its Subsidiaries has filed or caused to be
filed with all Governmental Authorities all reports, applica-
tions, documents, instruments and information required to be
filed pursuant to all applicable laws, rules, regulations and re-
quests which, if not so filed, could reasonably be expected to
have a Material Adverse effect. Each Borrower, prior to each
borrowing by it hereunder in any jurisdiction, has obtained all
necessary approvals and consents of, and has filed or caused to
81<PAGE>
be filed all reports, applications, documents, instruments and
information required to be filed pursuant to all applicable laws,
rules, regulations and requests of, all Governmental Authorities
in connection with such borrowing in such jurisdiction.
I. Governmental Regulations
Neither the Parent nor any of its
Subsidiaries nor any corporation controlling the Parent or any of
its Subsidiaries or under common control with the Parent or any
of its Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, in each case as amended, or is
subject to any statute or regulation which regulates the in-
currence of Indebtedness, including statutes or regulations rela-
tive to common or contract carriers or to the sale of elec-
tricity, gas, steam, water, telephone, telegraph or other public
utility services.
J. Property
Each of the Parent and each of its
Subsidiaries has good and marketable title to, or a valid lease-
hold interest in, all of its real Property, and is the owner of,
or has a valid lease of, all personal property, in each case
which is material to the Parent and its Subsidiaries taken as a
whole, subject to no Liens, except such Liens permitted by
Section 8.3. All leases of Property to each of the Parent and
each of its Subsidiaries are in full force and effect, the Parent
or such Subsidiary enjoys quiet and undisturbed possession under
all leases of real property and neither the Parent nor any of its
Subsidiaries is in default beyond any applicable grace period of
any provision thereof, the effect of which could reasonably be
expected to have a Material Adverse effect.
K. Federal Reserve Regulations; Use of Loan
Proceeds
Neither the Parent nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose
of purchasing or carrying any Margin Stock. No part of the
proceeds of the Loans or any Letter of Credit will be used,
directly or indirectly, for a purpose which violates the
provisions of Regulations G, T, U or X of the Board of Governors
of the Federal Reserve System, as amended. Anything in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to the Parent or any of its
Subsidiaries in violation of any limitation or prohibition
provided by any applicable law, regulation or statute, including
Regulation U of the Board of Governors of the Federal Reserve
System.
82<PAGE>
L. No Misrepresentation
No representation or warranty contained in
any Loan Document and no certificate, Financial Statement, other
financial statement or written notice furnished or to be
furnished by the Parents or any of its Subsidiaries in connection
with the transactions contemplated hereby, contains or will con-
tain, as of its date, a misstatement of material fact, or omits
or will omit to state, as of its date, a material fact required
to be stated in order to make the statements therein contained
not misleading in the light of the circumstances under which
made.
M. Plans
(a) Each Employee Benefit Plan of the
Parent, each of its Subsidiaries and each ERISA Affiliate is in
compliance with ERISA and the Code, where applicable, in all
material respects. The amount of (a) all Unfunded Pension
Liabilities under the Pension Plans, excluding any Pension Plan
which is a Multiemployer Plan, does not exceed $2,000,000, and
(b) the aggregate Unrecognized Retiree Welfare Liability under
all applicable Employee Benefit Plans does not exceed $2,000,000.
The Parent, each of its Subsidiaries and each ERISA Affiliate
have complied with the requirements of Section 515 of ERISA with
respect to each Pension Plan which is a Multiemployer Plan. The
aggregate potential annual withdrawal liability payments, as
determined in accordance with Title IV of ERISA, for which the
Parent, each of its Subsidiaries and each ERISA Affiliate would
become obligated in the event of a complete or partial with-
drawal from all Pension Plans which are Multiemployer Plans does
not exceed $2,000,000. The Parent, each of its Subsidiaries and
each ERISA Affiliate has made all contributions or payments to or
under each such Pension Plan required by law or the terms of such
Pension Plan or any contract or agreement where the failure to
make such contributions or payments could reasonably be expected
to have a Material Adverse effect. No liability to the PBGC has
been, or is expected by the Parent, any of its Subsidiaries or
any ERISA Affiliate to be, incurred by the Parent, any of its
Subsidiaries or any ERISA Affiliate where such liability could
reasonably be expected to have a Material Adverse effect. Li-
ability, as referred to in this Section 4.13, includes any joint
and several liability. Each Employee Benefit Plan which is a
group health plan within the meaning of Section 5000(b)(1) of the
Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Code.
(b) All contributions required to be made
with respect to each Foreign Pension Plan have been timely made.
Each Foreign Pension Plan has been maintained in compliance with
its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been
83<PAGE>
maintained, where required, in good standing with applicable
Governmental Authorities. Neither the Parent nor any of its
Subsidiaries has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The
present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Pension Plan required to be funded,
determined as of the end of the most recently ended fiscal year
on the basis of actuarial assumptions, each of which is
reasonable, did not exceed the current value of the assets of
such Foreign Pension Plan allocable to such benefit liabilities
by more than the foreign exchange equivalent (based on the
applicable spot exchange rate) of $2,000,000.
N. Environmental Matters
Neither the Parent nor any of its
Subsidiaries (a) has received written notice or otherwise learned
of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual
liability which individually or in the aggregate could reasonably
be expected to have a Material Adverse effect, arising in connec-
tion with (i) any non-compliance with or violation of the
requirements of any applicable federal, state, local or foreign
environmental health or safety statute or regulation, or (ii) the
release or threatened release of any toxic or hazardous waste,
substance or constituent, or other substance into the environ-
ment, (b) to the best knowledge of the Parent and the Borrowers,
has any threatened or actual liability in connection with the
release or threatened release of any toxic or hazardous waste,
substance or constituent, or other substance into the environment
which individually or in the aggregate could reasonably be
expected to have a Material Adverse effect, (c) has received
notice of any federal, state, local or foreign investigation
evaluating whether any remedial action is needed to respond to a
release or threatened release of any toxic or hazardous waste,
substance or constituent or other substance into the environment
for which the Parent or any of its Subsidiaries is or would be
liable, which liability would reasonably be expected to have a
Material Adverse effect, or (d) has received notice that the
Parent or any of its Subsidiaries is or may be liable to any
Person under the Comprehensive Environmental Response, Compen-
sation and Liability Act, as amended, 42 U.S.C. Section 9601 et
seq., or any analogous state, local or foreign law, which
liability would reasonably be expected to have a Material Adverse
effect. The Parent and each of its Subsidiaries is in compliance
with the financial responsibility requirements of federal, state,
local and foreign environmental laws to the extent applicable,
including those contained in 40 C.F.R., parts 264 and 265,
subpart H, and any analogous federal, state, local or foreign
law, except in those cases in which the failure so to comply
would not reasonably be expected to have a Material Adverse
effect.
84<PAGE>
O. Financial Statements
The Parent has heretofore delivered to the
Administrative Agent and the Lenders copies of its Form 10-K for
the fiscal year ended January 31, 1995, containing the audited
Consolidated Balance Sheets of the Parent and its Subsidiaries as
of such date and the related Consolidated Statements of Income,
Stockholders' Equity and Cash Flows for the fiscal year then
ended (collectively, with the applicable related notes and sched-
ules, the "Financial Statements"). The Financial Statements
fairly present the Consolidated financial condition and results
of the operations of the Parent and its Subsidiaries as of the
dates and for the periods indicated therein and have been pre-
pared in conformity with GAAP as then in effect subject, in the
case of interim Financial Statements, to normal year-end
adjustments. Neither the Parent nor any of its Subsidiaries has
any obligation or liability of any kind (whether fixed, accrued,
contingent, unmatured or otherwise) which, in accordance with
GAAP as then in effect, should have been disclosed in the Fi-
nancial Statements and was not. Since January 31, 1995, there
has been no Material Adverse change.
P. Franchises, Intellectual Property, Etc.
Each of the Parent and each of its
Subsidiaries possesses or has the right to use all franchises,
Intellectual Property, licenses and other rights as are material
and necessary for the conduct of its business, and with respect
to which it is in compliance, with no known conflict with the
valid rights of others which could reasonably be expected to have
a Material Adverse effect. No event has occurred which permits
or, to the best knowledge of the Parent and the Borrowers, after
notice or the lapse of time or both, or any other condition,
could reasonably be expected to permit, the revocation or ter-
mination of any such franchise, Intellectual Property, license or
other right which revocation or termination could reasonably be
expected to have a Material Adverse effect.
Q. Labor Relations
Except as set forth on Schedule 4.17,
neither the Parent nor any of its Subsidiaries is a party to any
collective bargaining agreement and, to the best knowledge of the
Parent and the Borrowers, no petition has been filed or proceed-
ings instituted by any employee or group of employees with any
labor relations board seeking recognition of a bargaining rep-
resentative with respect to the Parent or such Subsidiary. There
are no material controversies pending between the Parent or any
of its Subsidiaries and any of their respective employees, which
could reasonably be expected to have a Material Adverse effect.
85<PAGE>
V. CONDITIONS OF LENDING - LOANS ON THE FIRST
BORROWING DATE
In addition to the requirements set forth in
Section 6, the obligation of each Lender to make one or more
Loans, the obligation of the Swing Line Lender to make one or
more Swing Line Loans and the obligation of the Issuing Bank to
issue one or more Letters of Credit, on the first Borrowing Date
(which shall not occur prior to the Effective Date) is subject to
the fulfillment of the following conditions prior to or
simultaneously with the making of such Loans or the issuance of
such Letters of Credit:
A. Evidence of Corporate Action
The Administrative Agent shall have re-
ceived a certificate, dated the first Borrowing Date, of the Sec-
retary or Assistant Secretary of each Credit Party (i) attaching
a true and complete copy of the resolutions of its Board of Di-
rectors and of all documents evidencing all necessary corporate
action (in form and substance reasonably satisfactory to the
Administrative Agent) taken by it to authorize the Loan Documents
to which it is a party and the transactions contemplated thereby,
(ii) attaching a true and complete copy of its organizational
documents, (iii) setting forth the incumbency of its officer(s)
who may sign such Loan Documents, including therein a signature
specimen of such officer(s), and (iv) attaching a certificate of
good standing of the Secretary of State of the State of its
incorporation and each of the jurisdictions listed on Schedule
5.1, in each case to the extent such certificate of good standing
is available.
B. Guaranty
Each of the Parent, Tiffany, Tiffany
International and Tiffany Japan shall have delivered to the Ad-
ministrative Agent a guaranty, dated as of the date hereof,
executed by such Credit Party and in the form of Exhibit N (as
the same may be amended, supplemented or otherwise modified from
time to time, the "Guaranty").
C. Approvals
The Administrative Agent shall have
received evidence reasonably satisfactory to it that all
approvals and consents of all Governmental Authorities, and all
approvals and all consents of all other Persons, in each case
which are required to be obtained in connection with the consum-
mation of the transactions contemplated by the Loan Documents
have been obtained and that all required notices have been given,
and the Administrative Agent shall have received a certificate,
in all respects reasonably satisfactory to the Administrative
86<PAGE>
Agent, of the Responsible Officer to the foregoing effect to the
best knowledge of such officer.
D. Litigation
There shall be no injunction, writ,
preliminary restraining order or other order of any nature issued
by any Governmental Authority in any respect affecting any Loan
Document or any transaction contemplated by the Loan Documents,
and no action or proceeding by or before any Governmental Au-
thority shall have been commenced and be pending seeking to
prevent or delay any of the foregoing or challenging any term or
provision thereof or seeking any damages in connection therewith,
and the Administrative Agent shall have received a certificate,
in all respects reasonably satisfactory to the Administrative
Agent, of the executive officers or analogous counterparts of the
Parent to the foregoing effect to the best knowledge of such
officer.
E. Approval of Special Counsel
All legal matters incident to the making
of the Loans on the first Borrowing Date shall be reasonably
satisfactory to Special Counsel, and the Administrative Agent
shall have received from Special Counsel an opinion, dated the
first Borrowing Date, substantially in the form of Exhibit P.
F. Opinion of Counsel to the Borrowers and
the Parent
(a) The Administrative Agent shall have
received an opinion of Scott A. Klion, Esq., Associate General
Counsel to the Parent and counsel to the Domestic Borrowers,
dated the first Borrowing Date, substantially in the form of
Exhibit O-1.
(b) The Administrative Agent shall have
received, in respect of each Borrower which is not a Domestic
Borrower, an opinion of local foreign counsel, reasonably
satisfactory to the Administrative Agent, to such Borrower, dated
the first Borrowing Date, substantially in the form of Exhibit O-
2.
G. Existing Indebtedness
All Indebtedness set forth on Schedule 5.7
shall have been paid in full, all Liens, if any, securing the
same shall have been terminated, and the Administrative Agent
shall have received satisfactory evidence of the foregoing.
H. Payment of Fees
87<PAGE>
The Parent and the Borrowers shall have
paid to the Issuing Bank, the Swing Line Lender, the
Administrative Agent, the Arranging Agent and the Lenders all
fees and all expenses which they shall have agreed to pay, to the
extent such fees and expenses shall have become payable on or
prior to the first Borrowing Date, and shall have paid the rea-
sonable fees and disbursements of Special Counsel in connection
with such agreement to the extent billed therefor.
I. Other Documents
The Administrative Agent shall have
received such other documents (including financial statements and
projections), each in form and substance reasonably satisfactory
to the Administrative Agent, as the Administrative Agent shall
reasonably require in connection with the making of the first
Loans and the issuance of the first Letters of Credit.
VI. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF
CREDIT
The obligation of each Lender to make each Loan,
the obligation of the Swing Line Lender to make each Swing Line
Loan and the obligation of the Issuing Bank to issue each Letter
of Credit is subject to the fulfillment of the following condi-
tions precedent:
A. Compliance
On each Borrowing Date, and after giving
effect to the Loans to be made, and the Letters of Credit to be
issued, on such Borrowing Date, (a) there shall exist no Default
or Event of Default and (b) the representations and warranties
contained in this Agreement shall be true and correct with the
same effect as though such representations and warranties had
been made on such Borrowing Date except to the extent that any
representation or warranty under Section 4.1 expressly relates to
an earlier date.
B. Loan Closings
All documents required by the provisions
of this Agreement to have been executed or delivered by each
Credit Party to the Administrative Agent, the Issuing Bank, the
Swing Line Lender or any Lender on or before the applicable
Borrowing Date shall have been so executed or delivered on or be-
fore such Borrowing Date.
C. Borrowing or Letter of Credit Request
The receipt by the Administrative Agent of
88<PAGE>
a Notice of Borrowing, in the case of such Loan, or a Letter of
Credit Request, in the case of a Letter of Credit, executed by
the Parent and the applicable Borrower making such request.
D. Other Documents
The Administrative Agent shall have
received such other documents (including financial statements and
projections), each in form and substance reasonably satisfactory
to the Administrative Agent, as the Administrative Agent shall
reasonably require in connection with the making of the Loans and
the issuance of the Letters of Credit on such Borrowing Date.
VII. AFFIRMATIVE AND FINANCIAL COVENANTS
The Parent agrees that, so long as any Loan
Document is in effect, any Loan, Letter of Credit or
reimbursement obligation (contingent or otherwise) in respect of
any Letter of Credit remains outstanding and unpaid, or any
other amount is owing under any Loan Document to any Lender or
the Administrative Agent, the Parent will:
A. Legal Existence
Except as may otherwise be permitted by
Sections 8.4, 8.5 and 8.6, maintain, and cause each of its
Subsidiaries to maintain, (a) its corporate or partnership
existence, as the case may be, and (b) such existence in good
standing in the jurisdiction of its incorporation or formation
and in each other jurisdiction in which the failure so to do
could reasonably be expected to have a Material Adverse effect;
provided however, that subject to Section 8, nothing in this
Section 7.1 shall prevent the abandonment or termination of the
corporate existence or good standing of any Subsidiary of the
Parent (other than Tiffany, Tiffany International and Tiffany
Japan) in any jurisdiction if (i), in the reasonable judgment of
the Parent and such Subsidiary, such abandonment or termination
is in the best interest of the Parent and its Subsidiaries taken
as a whole and would not have a Material Adverse effect and (ii)
such Subsidiary, at the time of such abandonment or termination,
has no obligations, contingent or otherwise, under any Loan
Documents to any Lender, the Swing Line Lender, the Issuing Bank
or the Administrative Agent.
B. Taxes
Pay and discharge when due, and cause each
of its Subsidiaries so to do, all taxes, assessments, govern-
mental charges, license fees and levies upon or with respect to
the Parent and such Subsidiary, and upon the income, profits and
Property thereof unless, and only to the extent, that (a) such
89<PAGE>
taxes, assessments, governmental charges, license fees and levies
shall be contested in good faith and by appropriate proceedings
diligently conducted by the Parent or such Subsidiary, and (b)
such reserve or other appropriate provision as shall be required
by GAAP shall have been made therefor.
C. Insurance
Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound insur-
ance carriers against at least such risks, and in at least such
amounts, as are usually insured against by similar businesses,
including business interruption, public liability (bodily injury
and property damage), fidelity, workers' compensation (where
required) and property insurance, upon request a detailed list of
such insurance then in effect, stating the names of the carriers
thereof, the policy numbers, the insureds thereunder, the amounts
of insurance, dates of expiration thereof, and the Property and
risks covered thereby; except that the Parent or any of its
Subsidiaries may effect workers' compensation or similar
insurance in respect of operations in any jurisdiction either
through an insurance fund operated by such jurisdiction or by
causing to be maintained a system or systems of self-insurance
which is in accord with applicable laws and good business
practice.
D. Performance of Obligations
Pay and discharge promptly when due, and
cause each of its Subsidiaries so to do, all lawful Indebtedness,
obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to (a)
have a Material Adverse effect, or (b) become a Lien on the
Property of the Parent or any of its Subsidiaries, except those
Liens permitted under Section 8.3, provided that neither the
Parent nor such Subsidiary shall be required to pay or discharge
or cause to be paid or discharged any such Indebtedness, obliga-
tion or claim so long as (i) the validity thereof shall be con-
tested in good faith and by appropriate proceedings diligently
conducted by the Parent or such Subsidiary, and (ii) such reserve
or other appropriate provision as shall be required by GAAP shall
have been made therefor.
E. Condition of Property
Except for ordinary wear and tear, at all
times, maintain, protect and keep in good repair, working order
and condition, all Property used in the operation of its business
(other than Property which is replaced with similar Property),
except (i) to the extent that the failure so to do would not, in-
dividually or in the aggregate, have a Material Adverse effect,
and cause each of its Subsidiaries so to do and (ii) as permitted
90<PAGE>
under Sections 8.3 and 8.4.
F. Observance of Legal Requirements
Observe and comply in all material
respects, and cause each of its Subsidiaries so to do, with all
laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and re-
quirements of all Governmental Authorities, which now or at any
time hereafter may be applicable to it or to such Subsidiary, a
violation of which could reasonably be expected to have a
Material Adverse effect.
G. Financial Statements and Other Information
Maintain, and cause each of its
Subsidiaries to maintain, a standard system of accounting in
accordance with GAAP, and furnish to each Lender:
(a) As soon as available and, in any
event, within 105 days after the close of each fiscal year, a
copy of (i) the Balance Sheet as of the end of such fiscal year,
of the Parent on a Consolidated basis, and (ii) the related
Statements of Income, Cash Flows and Shareholder's Equity for
such fiscal year, of the Parent on a Consolidated basis, setting
forth in each case in comparative form the corresponding figures
in respect of the previous fiscal year, all in reasonable detail,
and accompanied by, in the case of such Consolidated financial
statements, a report of the Accountants, which report shall state
that (A) the Accountants audited such Consolidated financial
statements, (B) such audit was made in accordance with generally
accepted auditing standards in effect at the time and provides a
reasonable basis for such opinion, and (C) said Consolidated
financial statements have been prepared in accordance with GAAP;
(b) Simultaneously with the delivery of
the certified statements required by clause (a) above, copies of
a certificate of such Accountants stating that, in making the ex-
amination necessary for their audit of the Consolidated financial
statements of the Parent for such fiscal year, nothing came to
their attention of a financial or accounting nature that caused
them to believe that there shall have occurred any condition or
event which would constitute a Default or an Event of Default,
or, if so, specifying in such certificate all such Defaults and
Events of Default and the nature and status thereof;
(c) As soon as available, and in any event
within 50 days after the end of each of the first three fiscal
quarters, and 105 days after the end of the last fiscal quarter,
of each fiscal year, a copy of (i) the Balance Sheet, as of the
end of such quarter, of the Parent on a Consolidated basis and
(ii) the related Statements of Income, Cash Flows and
91<PAGE>
Shareholder's Equity, of the Parent on a Consolidated basis for
(x) such quarter, and (y) the period from the beginning of the
then current fiscal year to the end of such quarter, in each case
in comparative form with the prior fiscal year, all in reasonable
detail and prepared in accordance with GAAP (without footnotes
and subject to year-end adjustments), together with a certificate
of the Responsible Officer, which certificate shall state that
all such financial statements fairly present the financial
condition and results of operations of the Parent and its Sub-
sidiaries and have been prepared in accordance with GAAP (but
without footnotes and subject to year-end adjustments);
(d) Notwithstanding anything to the
contrary contained herein, the Parent may satisfy its obligation
to furnish (i) the Consolidated financial statements referred to
in clause (a) above by furnishing, as soon as available, and in
any event within 105 days after the end of the applicable fiscal
year, a copy of the annual audited Consolidated financial
statements of the Parent and its Subsidiaries prepared in con-
formity with GAAP and as filed with the SEC for such fiscal year,
and (ii) the Consolidated financial statements referred to in
clause (c) above by furnishing, as soon as available, and in any
event within 50 days after the end of the applicable fiscal
quarter, copies of the Consolidated financial statements of the
Parent and its Subsidiaries as filed with the SEC for the
applicable fiscal quarter;
(e) Simultaneously with the delivery of
the financial statements required by clauses (a), (c) and (d)
above, a certificate of the Responsible Officer certifying that
to the best of his knowledge no condition or event has occurred
which would constitute a Default or an Event of Default, or if
so, specifying in such certificate all such violations, condi-
tions and events and the nature and status thereof;
(f) Within 45 days after the end of each
of the first three fiscal quarters, and within 90 days after the
end of the last fiscal quarter, of each fiscal year, a Compliance
Certificate, as of the end of such fiscal quarter, certified by
the Responsible Officer;
(g) As soon as available, and in any event
within two Business Days after any downgrade or withdrawal by
either S&P or Moody's of the senior unsecured long term debt
Rating assigned to the Parent, written notice to the
Administrative Agent and each Lender thereof, and the effective
date thereof, in each case certified by the Responsible Officer;
(h) Prompt written notice upon the Parent
or any of its Subsidiaries obtaining knowledge that: (i) any In-
debtedness of the Parent or any of its Subsidiaries in an
aggregate amount in excess of $5,000,000 shall have been declared
92<PAGE>
or become due and payable prior to its stated maturity, or called
and not paid when due, or required to be purchased or otherwise
acquired by the Parent or any of its Subsidiaries prior to its
stated maturity, and whether such acceleration shall have been
rescinded or annulled, or (ii) the holders of any notes, or other
evidence of Indebtedness, certificates or securities evidencing
any such Indebtedness, or any obligees with respect to any other
Indebtedness of the Parent or any of its Subsidiaries, have the
right to declare Indebtedness in an aggregate amount in excess
of $5,000,000 due and payable prior to its stated maturity or
have the right to require the Parent or any of its Subsidiaries
to purchase or otherwise acquire any such Indebtedness prior to
its stated maturity and whether such right shall have been
waived;
(i) Prompt written notice of: (i) any
citation, summons, subpoena, order to show cause or other order
naming the Parent or any of its Subsidiaries a party to any pro-
ceeding before any Governmental Authority which could reasonably
be expected to have a Material Adverse effect, and include with
such notice a copy of such citation, summons, subpoena, order to
show cause or other order, (ii) any lapse or other termination of
any license, permit, franchise or other authorization issued to
the Parent or any of its Subsidiaries by any Governmental
Authority, (iii) any refusal by any Governmental Authority to
renew or extend any license, permit, franchise or other autho-
rization, and (iv) any dispute between the Parent or any of its
Subsidiaries and any Governmental Authority, which lapse, ter-
mination, refusal or dispute, referred to in clause (ii), (iii)
or (iv) above, could reasonably be expected to have a Material
Adverse effect;
(j) Promptly upon becoming available,
copies of all regular, periodic or special reports, schedules,
proxy statements, registration statements, 10-Ks, 10-Qs and 8-Ks
which the Parent or any of its Subsidiaries may now or hereafter
be required to file with or deliver to any securities exchange or
the SEC, and copies of all material news releases sent to fi-
nancial analysts;
(k) Prompt written notice in the event
that the Parent or any of its Subsidiaries knows, or has reason
to know, that (i) any Termination Event with respect to a Pension
Plan has occurred or will occur, (ii) any condition exists with
respect to a Pension Plan (other than a Multiemployer Plan) which
presents a material risk of termination of such Pension Plan by
the PBGC, imposition of an excise tax on the Parent, any of its
Subsidiaries or any ERISA Affiliate or the requirement that the
Parent, any of its Subsidiaries or any ERISA Affiliate provide
security to any Pension Plan, (iii) the Parent, any of its
Subsidiaries or any ERISA Affiliate has applied for a waiver of
the minimum funding standard under Section 412 of the Code with
93<PAGE>
respect to a Pension Plan, (iv) the aggregate amount of the
Unfunded Pension Liabilities under all Pension Plans (other than
Multiemployer Plans) has increased to an amount in excess of
$2,000,000, (v) the aggregate amount of Unrecognized Retiree Wel-
fare Liability under all applicable Employee Benefit Plans has
increased to an amount in excess of $2,000,000, (vi) the Parent,
any of its Subsidiaries or any ERISA Affiliate has engaged in a
Prohibited Transaction with respect to an Employee Benefit Plan,
(vii) the imposition of a tax upon the Parent or any of its
Subsidiaries under Section 4980B(a) of the Code, or (viii) the
assessment of a civil penalty under Section 502(c) of ERISA
against the Parent or any of its Subsidiaries, or (ix) any
condition with respect to a Multiemployer Plan exists which
presents a risk of material liability to the Parent or any of its
Subsidiaries or would reasonably be expected to have a Material
Adverse effect, in each case together with a certificate of the
Responsible Officer setting forth the details of such event and
the action which the Parent, such Subsidiary or such ERISA Af-
filiate proposes to take with respect thereto, together with a
copy of all notices and filings with respect thereto;
(l) Prompt written notice in the event
that the Parent, any of its Subsidiaries or any ERISA Affiliate
shall receive a demand letter from the PBGC notifying the Parent,
such Subsidiary or such ERISA Affiliate of any final decision
finding liability of the Parent, any of its Subsidiaries or any
ERISA Affiliate and the date by which such liability must be
paid, together with a copy of such letter and a certificate of
the Responsible Officer setting forth the action which the
Parent, such Subsidiary or such ERISA Affiliate proposes to take
with respect thereto;
(m) Promptly upon the same becoming
available, and in any event by the date such amendment is
adopted, a copy of any Pension Plan amendment that the Parent,
any of its Subsidiaries or any ERISA Affiliate proposes to adopt
which would require the posting of security under Section
401(a)(29) of the Code, together with a certificate of the
Responsible Officer setting forth the reasons for the adoption of
such amendment and the action which the Parent, such Subsidiary
or such ERISA Affiliate proposes to take with respect thereto;
(n) As soon as possible and in any event
by the 10th day after any required installment or other payment
under Section 412 of the Code owed to a Pension Plan by the
Parent, any of its Subsidiaries or any ERISA Affiliate shall have
become due and owing and remain unpaid a copy of the notice of
failure to make required contributions provided to the PBGC by
the Parent, any of its Subsidiaries or any ERISA Affiliate under
Section 412(n) of the Code, together with a certificate of the
Responsible Officer setting forth the action which the Parent,
such Subsidiary or such ERISA Affiliate proposes to take with re-
94<PAGE>
spect thereto;
(o) If the termination of any Pension Plan
would result in the imposition of any tax under Section 4980 of
the Code, then as soon as possible, but in no event less than 60
days before the due date of the tax, a certificate of the
Responsible Officer setting forth the estimated amount of the
tax, any reversion, and the proposed use of the reversion (this
Section 7.7(o) shall apply to a transaction notwithstanding a
reduction or complete elimination of the tax because of the
operation of either Sections 4980(d) or 420(a)(3)(A) of the
Code);
(p) Upon a Responsible Officer becoming
aware thereof, prompt written notice that a material contribution
required to be made to any Foreign Pension Plan has not been
timely made, the failure of which would reasonably be expected to
have a Material Adverse effect;
(q) Upon a Responsible Officer becoming
aware thereof, prompt written notice of the occurrence of (i)
each Default, (ii) each Event of Default, and (iii) each Material
Adverse change;
(r) Promptly upon receipt thereof, copies
of all audit reports relating to the Parent or any of its
Subsidiaries submitted by the Accountants in connection with each
annual, interim or special audit of the books of the Parent or
any of its Subsidiaries; and
(s) Promptly upon request therefor, such
other information and reports regarding the business, condition
(financial or otherwise), property or prospects of the Parent and
its Subsidiaries, as the Administrative Agent or any Lender at
any time or from time to time may reasonably request.
H. Inspection
At all reasonable times, upon reasonable
prior notice, permit representatives of the Administrative Agent
or any Lender to visit the offices of the Parent or each of its
Subsidiaries, to examine the books and records thereof and Ac-
countants' reports relating thereto, and to make copies or
extracts therefrom, to discuss the affairs of the Parent or each
of its Subsidiaries with the respective officers thereof, and to
examine and inspect the Property of the Parent or each of its
Subsidiaries and to meet and discuss the affairs of the Parent
and each of its Subsidiaries with the Accountants.
I. Authorizations
Maintain and cause each of its
95<PAGE>
Subsidiaries to maintain, in full force and effect, all copy-
rights, patents, trademarks, trade names, franchises, licenses,
permits, applications, reports, and other authorizations and
rights, as are necessary for the conduct from time to time of
their businesses, except to the extent the failure so to maintain
such items, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse effect.
J. Subsidiaries
(a) At all times maintain (directly or
indirectly), beneficially and of record, (i) at least 51% of the
voting control of, and at least 51% of the equity in, Tiffany &
Co. K.K., and (ii) 100% of the voting control of, and 100% of the
equity in, each other Subsidiary Borrower.
(b) Except as set forth on Schedule 4.1 or
as may otherwise be permitted by Sections 8.4, 8.5 and 8.6, at
all times maintain (directly or indirectly), beneficially and of
record, 100% of the voting control of, and 100% of the equity in,
each of its other Subsidiaries.
K. Leverage Ratio
At all times have a Leverage Ratio not
greater than 0.55:1.00.
L. Interest Coverage Ratio
At all times have an Interest Coverage
Ratio greater than 2.50:1.00.
VIII. NEGATIVE COVENANTS
The Parent agrees that, so long as any Loan
Document is in effect, any Loan, Letter of Credit or
reimbursement obligation (contingent or otherwise) in respect of
any Letter of Credit remains outstanding and unpaid, or any other
amount is owing under any Loan Document to any Lender, the Swing
Line Lender or the Administrative Agent, the Parent shall not,
directly or indirectly:
A. Indebtedness
Create, incur, assume or suffer to exist
any Indebtedness, or permit any of its Subsidiaries so to do,
except any one or more of the following types of Indebtedness:
(a) Indebtedness under the Loan Documents, (b) Indebtedness of
the Subsidiaries of the Parent in an aggregate principal amount
not in excess of $25,000,000 at any one time outstanding (i) in
respect of capital leases, (ii) secured by Liens on Property
96<PAGE>
acquired by any such Subsidiary after the date hereof provided
that such Liens are in existence on the date of such acquisition
and were not placed on such Property in contemplation of such ac-
quisition, and (iii) other purchase money Indebtedness of the
Subsidiaries of the Parent, provided that, in each case under
this clause (b), the Lien securing such Indebtedness is permitted
by Section 8.3, (c) Indebtedness set forth on Schedule 8.1 and
any refinancings, extensions and renewals thereof, (d)
Indebtedness set forth on Schedule 5.7, provided that it will be
repaid in full simultaneously with the making of the Loans on the
first Borrowing Date, (e) Intercompany Debt, (f) other In-
debtedness of the Subsidiaries of the Parent in an aggregate
principal amount at any one time outstanding not to exceed
$10,000,000, provided that immediately before and after giving
effect to the creation, incurrence or assumption of such
Indebtedness no Default or Event of Default shall or would exist,
(g) Indebtedness of the Parent, provided that immediately before
and after giving effect to the creation, incurrence or assumption
of such Indebtedness no Default or Event of Default shall or
would exist, and (h) Indebtedness in the form of a deferred
payable of Tiffany to Mitsukoshi Limited in the principal amount
of 2.5 billion Japanese yen.
B. Interest Rate Protection Arrangements and
Other Hedging Arrangements
Create, incur, assume or suffer to exist
any indebtedness under or in respect of any Interest Rate
Protection Arrangement or any Other Hedging Arrangement, or
permit any of its Subsidiaries so to do, except (i) foreign
currency purchased put options and forward exchange contracts
intended to reduce the risk on foreign currency denominated
transactions and (ii) interest rate swap agreements to modify the
interest rate characteristics of up to $100,000,000 notional
principal amount of Indebtedness.
C. Liens
Create, incur, assume or suffer to exist
any Lien against or on any Property now owned or hereafter ac-
quired by the Parent or any of its Subsidiaries, or permit any of
its Subsidiaries so to do, except any one or more of the
following types of Liens: (a) Liens in connection with workers'
compensation, unemployment insurance or other social security
obligations (which phrase shall not be construed to refer to
ERISA or the minimum funding obligations under Section 412 of the
Code), (b) Liens to secure the performance of bids, tenders,
letters of credit, contracts (other than contracts for the
payment of Indebtedness), leases, statutory obligations, surety,
customs, appeal, performance and payment bonds and other
obligations of like nature, in each such case arising in the
ordinary course of business, (c) mechanics', workmen's,
97<PAGE>
carriers', warehousemen's, materialmen's, landlords', or other
like Liens arising in the ordinary course of business with
respect to obligations which are not due or which are being
contested in good faith and by appropriate proceedings diligently
conducted, (d) Liens for taxes, assessments, fees or governmental
charges the payment of which is not required by Section 7.2, (e)
easements, rights of way, restrictions, leases of Property to
others, easements for installations of public utilities, title
imperfections and restrictions, zoning ordinances and other
similar encumbrances affecting Property which in the aggregate do
not materially impair its use for the operation of the business
of the Parent or such Subsidiary, (f) Liens set forth on Schedule
8.3 and any renewal thereof, (g) Liens under capital leases and
Liens on Property (including, in the event such Property con-
stitutes capital stock of a newly acquired Subsidiary of the
Parent, Liens on the Property of such Subsidiary) hereafter
acquired and either existing on such Property when acquired, or
created contemporaneously with such acquisition, to secure the
payment or financing of the purchase price thereof, provided that
such Liens attach only to the Property so purchased or acquired
and provided further that the Indebtedness secured by such Liens
is permitted by Section 8.1(b), (h) Liens created under the Loan
Documents, (i) statutory Liens in favor of lessors arising in
connection with Property leased to the Parent or any of its Sub-
sidiaries, (j) Liens of attachments, judgments or awards against
the Parent or any of its Subsidiaries with respect to which an
appeal or proceeding for review shall be pending or a stay of
execution shall have been obtained, or which are otherwise being
contested in good faith and by appropriate proceedings diligently
conducted, and in respect of which adequate reserves shall have
been established in accordance with GAAP on the books of the
Parent or such Subsidiary, and (k) Intercompany Liens.
D. Dispositions
Make any Disposition or permit any of its
Subsidiaries so to do, except any one or more of the following:
(a) Dispositions of any Investments permitted under Sections
8.7(a), (b), (c), (d) or (e), (b) Intercompany Dispositions, (c)
Dispositions in the ordinary course of business (including the
disposition of closed stores and the disposition of certain New
Jersey facilities in connection with the consolidation of such
facilities' operations into a new facility to be constructed and
leased in Parsippany, New Jersey), and (d) other Dispositions of
Property having a fair market value which, when aggregated with
the fair market value of all other Dispositions of Property
(other than Dispositions described in the preceding clauses (a),
(b) and (c) made on and after the Effective Date, would not
exceed $75,000,000 on a Consolidated basis, provided, however,
that immediately before and after giving effect thereto, no
Default or Event of Default shall or would exist.
98<PAGE>
E. Merger or Consolidation, Etc.
(a) Consolidate with, be acquired by, or
merge into or with any Person, or convey or otherwise transfer
all or substantially all of its Property, or permit any of its
Subsidiaries so to do, except that:
(i) any of its wholly-owned Subsidiar-
ies (other than a Borrower) may consolidate with or merge with
any of its other Subsidiaries (other than a Borrower), or convey
or transfer all or substantially all of its Property to any of
its other wholly-owned Subsidiaries (other than a Borrower),
provided that (x) immediately before and after giving effect
thereto no Default or Event of Default shall or would exist and
(y) the Administrative Agent shall have received 15 Business
Days' prior written notice thereof, and
(ii) any of its wholly-owned
Subsidiaries may consolidate with or merge with any Subsidiary
Borrower, or convey or transfer all or substantially all of its
Property to any Subsidiary Borrower, provided that (w)
immediately before and after giving effect thereto no Default or
Event of Default shall or would exist, (x) such Subsidiary
Borrower shall be the survivor of such consolidation or merger,
(y) the Administrative Agent shall have received 15 Business
Days' prior written notice of such consolidation, merger,
conveyance or transfer, and (z) the Administrative Agent shall
have received such documents, opinions and certificates as the
Administrative Agent shall have reasonably requested in
connection therewith.
F. Acquisitions
Make any Acquisition, or permit any of its
Subsidiaries so to do, except any one or more of the following:
(a) Acquisitions of Investments permitted by Section 8.7, (b)
Intercompany Acquisitions permitted by Section 8.5, and (c)
Acquisitions by the Parent or any of its Subsidiaries, provided
that (i) immediately before and after giving effect to each such
Acquisition no Default or Event of Default shall or would exist,
(ii) immediately after giving effect to each such Acquisition,
all of the representations and warranties contained in Section 4
shall be true and correct as if then made except to the extent
that any representation or warranty under Section 4.1 expressly
relates to an earlier date, and (iii) the aggregate consideration
paid for all such Acquisitions shall not exceed $50,000,000.
G. Investments
Any time hold, purchase, invest in or
otherwise acquire any derivative product or any interest therein
or any debt security or Stock of, or any other equity interest
99<PAGE>
in, any Person, or make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, or
make any other investment, whether by way of capital contribution
or otherwise, in any Person (all of which are sometimes referred
to herein as "Investments"), or permit any of its Subsidiaries so
to do, except any one or more of the following Investments: (a)
Investments in short-term direct obligations of the United States
of America (and not the agencies or instrumentalities thereof),
(b) Investments in short-term debt securities of any issuer,
provided that the principal thereof and interest thereon is
unconditionally guaranteed by the United States of America (and
not the agencies or instrumentalities thereof), (c) Investments
in short-term certificates of deposit, in Dollars, of any Lender
or any other depository institution chartered under the laws of
the United States of America or any State thereof the deposits of
which are insured by the Federal Deposit Insurance Corporation
and which has capital and undivided surplus of not less than
$500,000,000, (d) Investments in commercial paper having a com-
mercial paper rating of not lower than (i) A-1 by S&P, or (ii) P-
1 by Moody's, (e) Investments existing on the date hereof and set
forth on Schedule 8.7, (f) Investments in Intercompany Debt, (g)
Investments in the Parent or any Subsidiary or any Person who
immediately thereafter becomes a Subsidiary, (h) Investments from
the net cash proceeds received from the issuance of additional
shares of the Parent's capital stock, (i) Acquisitions permitted
by Section 8.6, (j) Investments in short-term certificates of
deposit or similar instruments, in any Currency other than
Dollars, of any bank which has capital and undivided surplus of
not less than the equivalent of $1,000,000,000, and (k)
additional Investments in an aggregate amount not exceeding
$5,000,000 or the equivalent thereof.
H. Restricted Payments
Make any Restricted Payment or permit any
of its Subsidiaries so to do, except any one or more of the
following Restricted Payments: (a) any direct or indirect
wholly-owned Subsidiary of the Parent may make dividends or other
distributions to the Parent or to any other direct or indirect
wholly-owned Subsidiary of the Parent, and (b) the Parent may
make regular periodic dividends at a rate which is substantially
consistent with past practice, provided that immediately before
and after giving effect thereto, no Default or Event of Default
shall or would exist.
I. Limitation on Upstream Dividends by Sub-
sidiaries
Permit, cause or suffer to exist, any of
its Subsidiaries to enter into or agree, or otherwise be or
become subject, to any agreement, contract or other arrangement
(other than this Agreement) with any Person pursuant to the terms
100<PAGE>
of which (a) such Subsidiary is or would be prohibited from
declaring or paying any cash dividends on any class of its stock
owned directly or indirectly by the Parent or any of its other
Subsidiaries or from making any other distribution on account of
any class of any such stock (herein referred to as "Upstream
Dividends"), or (b) the declaration or payment of Upstream Divi-
dends by a Subsidiary of the Parent to the Parent or another
Subsidiary of the Parent, on an annual or cumulative basis, is or
would be otherwise limited or restricted.
J. Transactions with Affiliates
Become, or permit any of its Subsidiaries
to become, a party to any material transaction with any Affiliate
of the Parent on a basis less favorable in any material respect
than if such transaction were not with an Affiliate of the
Parent.
IX. DEFAULT
A. Events of Default
The following shall each constitute an
"Event of Default" hereunder:
(a) The failure of any Borrower to make
any principal payment on any Loan or any reimbursement payment in
respect of any Letter of Credit when due and payable; or
(b) The failure of any Borrower to make
payment of any installment of interest on any Loan or any fee or
other amount payable under or in respect of any Loan Document on
the date when due and payable and such default shall continue
unremedied for a period of three Business Days after the same
shall have become due; or
(c) The failure of the Parent or any
Borrower to observe or perform any covenant or agreement
contained in Section 2.18, 7.1(a), 7.11 or 7.12, or in Section 8;
or
(d) The failure of the Parent or any
Borrower to observe or perform any other covenant or agreement
contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days after any
Responsible Officer shall have become aware of such failure; or
(e) Any representation or warranty of any
Credit Party (or of any of its officers on its behalf) made in
any Loan Document or in any certificate, report, opinion (other
than an opinion of counsel) or other document delivered on or
after the date hereof pursuant to any Loan Document, shall in any
101<PAGE>
such case prove to have been incorrect or misleading (whether
because of misstatement or omission) in any material respect when
made; or
(f) (i) Liabilities and/or other
obligations in an aggregate amount in excess of $5,000,000 of the
Parent or any of its Subsidiaries on a Consolidated basis (other
than the obligations hereunder and Intercompany Debt), whether as
principal, guarantor, surety or other obligor, for the payment or
purchase of any Indebtedness, (A) shall become or shall be de-
clared to be due and payable prior to the expressed maturity
thereof (unless such acceleration shall have thereafter been
unconditionally rescinded or annulled prior to the time that the
Aggregate Commitment has been terminated or the Loans have become
or been declared due and payable), or (B) shall not be paid when
due or within any grace period for the payment or purchase
thereof, or (ii) any holder of any such obligations shall have
the right to declare the Indebtedness evidenced thereby due and
payable or to require the purchase of the Indebtedness evidenced
thereby prior to its stated maturity (unless such right shall
thereafter have been unconditionally waived prior to the time
such holder shall have declared such Indebtedness due and payable
or required the purchase of such Indebtedness); or
(g) The Parent or any of its Subsidiaries
shall (i) suspend or discontinue its business (except as may oth-
erwise be expressly permitted herein), or (ii) make an assignment
for the benefit of creditors, or (iii) generally not be paying
its debts as such debts become due, or (iv) admit in writing its
inability to pay its debts as they become due, or (v) file a
voluntary petition in bankruptcy, or (vi) become insolvent
(however such insolvency shall be evidenced), or (vii) file any
petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, or (viii) pe-
tition or apply to any tribunal for any receiver, custodian or
any trustee for any substantial part of its Property, or (ix) be
the subject of any such proceeding filed against it which remains
undismissed for a period of 45 days, or (x) file any answer
admitting or not contesting the material allegations of any such
petition filed against it, or of any order, judgment or decree
approving such petition in any such proceeding, or (xi) seek, ap-
prove, consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, custodian, liquidator, or
fiscal agent for it, or any substantial part of its Property, or
an order is entered appointing any such trustee, receiver,
custodian, liquidator or fiscal agent and such order remains
unstayed and in effect for 45 days; or
(h) An order for relief is entered under
the bankruptcy or insolvency laws of any jurisdiction and
102<PAGE>
continues unstayed and in effect for a period of 60 days (i)
adjudging the Parent or any of its Subsidiaries as bankrupt or
insolvent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or compo-
sition of, or in respect of the Parent or any of its Subsidiaries
under the bankruptcy or insolvency laws of any jurisdiction, or
(iii) appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Parent
or any of its Subsidiaries or of any substantial part of the
Property of any thereof, or (iv) ordering the winding up or
liquidation of the affairs of the Parent or any of its
Subsidiaries and any such decree or order continues unstayed and
in effect for a period of 60 days; or
(i) Judgments or decrees in an aggregate
amount in excess of $5,000,000 on a Consolidated basis against
the Parent or any of its Subsidiaries (except to the extent
covered by insurance, provided that each applicable insurance
company has expressly assumed responsibility with respect to the
applicable underlying claim) shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of 30
days; or
(j) A Change of Control shall occur; or
(k) Any license, franchise, permit, right,
approval or agreement of the Parent or any of its Subsidiaries to
own or operate any Operating Entity owned or operated by the Par-
ent or such Subsidiary is not renewed, or is suspended or re-
voked, and the non-renewal, suspension or revocation is ir-
revocable and not subject to appeal or challenge and would have a
Material Adverse effect; or
(l) (i) any Termination Event shall occur
with respect to any Pension Plan (other than a Multiemployer
Plan); (ii) any Accumulated Funding Deficiency in excess of
$2,000,000, whether or not waived, shall exist with respect to
any Pension Plan (other than a Multiemployer Plan); (iii) any
Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan which would have a Material Adverse effect;
(iv) the Parent, any of its Subsidiaries or any ERISA Affiliate
shall fail to pay when due an amount which is payable by it to
the PBGC or to a Pension Plan (including a Multiemployer Plan)
under Title IV of ERISA and such non-payment would have a
Material Adverse effect; (v) the imposition of any tax under
Section 4980(B)(a) of the Code; (vi) the assessment of a civil
penalty with respect to any Employee Benefit Plan under Section
502(c) of ERISA; (vii) any other event or condition shall occur
or exist with respect to an Employee Benefit Plan which would
have a Material Adverse effect; (viii) a contribution required to
be made to a Foreign Pension Plan has not been timely made which
would have a Material Adverse effect; or (ix) the Parent or any
103<PAGE>
of its Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more Foreign Pension Plans which
would have a Material Adverse effect; or
(m) (i) Any Loan Document shall cease to
be in full force and effect, or an "Event of Default" shall have
occurred under, and as such term is defined therein, or (ii) the
failure of any Credit Party to observe or perform any obligation
on its part to be observed or performed under any Loan Document,
and such failure shall have continued unremedied for a period of
30 days after any Responsible Officer shall have become aware of
such failure, or any Credit Party shall disavow in writing any of
its obligations thereunder.
Upon the occurrence of an Event of Default
or at any time thereafter during the continuance thereof, (a) if
such event is an Event of Default specified in clause (g) or (h)
above, the Aggregate Commitments, the Swing Line Commitment, the
Individual Currency Commitments and the Letter of Credit Com-
mitment shall immediately and automatically terminate and the
Loans, all accrued and unpaid interest thereon, any reimbursement
obligations owing or contingently owing in respect of all
outstanding Letters of Credit and all other amounts owing under
the Loan Documents shall immediately become due and payable, and
the Parent and the applicable Letter of Credit Applicants shall
forthwith deposit an amount equal to the Letter of Credit Ex-
posure in a cash collateral account with and under the exclusive
control of the Administrative Agent, and the Administrative Agent
may, and, upon the direction of the Required Lenders shall,
exercise any and all remedies and other rights provided in the
Loan Documents, and (b) if such event is any other Event of
Default, any or all of the following actions may be taken: (i)
with the consent of the Required Lenders, the Administrative
Agent may, and upon the direction of the Required Lenders shall,
by notice to the Parent (on behalf of all Borrowers), declare the
Aggregate Commitments, the Swing Line Commitment, the Individual
Currency Commitments and the Letter of Credit Commitment to be
terminated forthwith, whereupon the Aggregate Commitments, the
Swing Line Commitment, the Individual Currency Commitments and
the Letter of Credit Commitment shall immediately terminate, and
(ii) with the consent of the Required Lenders, the Administrative
Agent may, and upon the direction of the Required Lenders shall,
by notice of default to the Parent (on behalf of all Borrowers),
declare the Loans, all accrued and unpaid interest thereon, any
reimbursement obligations owing or contingently owing in respect
of all outstanding Letters of Credit and all other amounts owing
under the Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable, and
the Parent and the applicable Letter of Credit Applicants shall
forthwith deposit an amount equal to the Letter of Credit Ex-
posure in a cash collateral account with and under the exclusive
control of the Administrative Agent, and the Administrative Agent
104<PAGE>
may, and upon the direction of the Required Lenders shall,
exercise any and all remedies and other rights provided pursuant
to the Loan Documents. Except as otherwise provided in this
Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived.
In the event that the Aggregate
Commitments, the Swing Line Commitment, the Individual Currency
Commitments and the Letter of Credit Commitment shall have been
terminated or the Loans shall have been declared due and payable
pursuant to the provisions of this Section, any funds received by
the Administrative Agent and the Lenders from or on behalf of any
Borrower shall be applied by the Administrative Agent and the
Lenders in liquidation of the Loans and the obligations of the
Credit Parties under the Loan Documents in the following manner
and order: (i) first, to the payment of interest on, and then the
principal portion of, any Loans which the Administrative Agent
may have advanced on behalf of any Lender for which the Admin-
istrative Agent has not then been reimbursed by such Lender or
the Credit Parties; (ii) second, to the payment of any expenses
due the Administrative Agent from the Credit Parties, (iii)
third, to reimburse the Administrative Agent and the Lenders for
any expenses (to the extent not paid pursuant to clause (ii)
above due from the Parent and the Borrowers pursuant to the
provisions of Section 11.5; (iv) fourth, to the payment of
accrued Facility Fees, Letter of Credit Commissions and all other
fees, expenses and amounts due under or in respect of the Loan
Documents (other than principal and interest on the Loans and
reimbursement obligations and interest thereon with respect to
the Letters of Credit); (v) fifth, to the payment of interest due
on the Loans and due on reimbursement obligations with respect to
the Letters of Credit; (vi) sixth, to the payment of principal
outstanding on the Loans and reimbursement obligations with
respect to the Letters of Credit; and (vii) seventh, to the pay-
ment of any other amounts owing to the Administrative Agent and
the Lenders under the Loan Documents.
X. THE ADMINISTRATIVE AGENT
A. Appointment
Each Lender hereby irrevocably designates
and appoints BNY as the Administrative Agent of such Lender under
the Loan Documents and each such Lender hereby irrevocably
authorizes BNY, as the Administrative Agent for such Lender, to
take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent by the terms
of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or any Loan Document,
105<PAGE>
the Administrative Agent shall not have any duties or respon-
sibilities other than those expressly set forth herein or
therein, or any fiduciary relationship with the Issuing Bank, the
Swing Line Lender or any Lender, and no implied covenants, func-
tions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the
Administrative Agent.
B. Delegation of Duties
The Administrative Agent may execute any
of its duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to rely upon the advice
of counsel concerning all matters pertaining to such duties.
C. Exculpatory Provisions
Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in con-
nection with the Loan Documents (except the Administrative Agent
for its own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Credit
Parties or any officers of the Credit Parties contained in the
Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness,
perfection, enforceability or sufficiency of any of the Loan
Documents or for any failure of the Credit Parties or any other
Person to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or per-
formance of any of the agreements contained in, or conditions of,
the Loan Documents, or to inspect the properties, books or
records of the Credit Parties. The Administrative Agent shall
not be under any liability or responsibility whatsoever, as
Administrative Agent, to the Credit Parties or any other Person
as a consequence of any failure or delay in performance, or any
breach, by any Lender of any of its obligations under the Loan
Documents.
D. Reliance by Administrative Agent
The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writ-
ing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, fax, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed,
106<PAGE>
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to any of the
Credit Parties), independent accountants and other experts se-
lected by the Administrative Agent. The Administrative Agent may
treat each Lender, or the Person designated in the last notice
filed with it under this Section, as the holder of all of the
interests of such Lender in its Loans until written notice of
transfer, signed by such Lender (or the Person designated in the
last notice filed with the Administrative Agent) and by the
Person designated in such written notice of transfer, in form and
substance satisfactory to the Administrative Agent, shall have
been filed with the Administrative Agent. The Administrative
Agent shall not be under any duty to examine or pass upon the
validity, effectiveness, enforceability, perfection or genuine-
ness of any of the Loan Documents or any instrument, document or
communication furnished pursuant hereto or thereto or in
connection herewith or therewith, and the Administrative Agent
shall be entitled to assume that the same are valid, effective
and genuine, have been signed or sent by the proper parties and
are what they purport to be. The Administrative Agent shall be
fully justified in failing or refusing to take any action under
the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Documents in
accordance with a request or direction of the Required Lenders,
and such request or direction and any action taken or failure to
act pursuant thereto shall be binding upon the Issuing Bank, the
Swing Line Lender and all of the Lenders and all future holders
of the Indebtedness of the Credit Parties under the Loan
Documents.
E. Notice of Default
The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Administrative Agent has
received written notice thereof from the Issuing Bank, the Swing
Line Lender, any Lender, or any Credit Parties. In the event
that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the
Issuing Bank, the Swing Line Lender and the Lenders. The Adminis-
trative Agent shall take such action with respect to such Default
or Event of Default as shall be directed by the Required Lenders,
provided, however, that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may
(but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the
Issuing Bank, the Swing Line Lender and the Lenders.
F. Non-Reliance
107<PAGE>
The Issuing Bank, the Swing Line Lender
and each Lender expressly acknowledges that neither the
Administrative Agent nor any of its respective officers, di-
rectors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by
the Administrative Agent hereinafter, including any review of the
affairs of the Credit Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to the
Issuing Bank, the Swing Line Lender or any Lender. The Issuing
Bank, the Swing Line Lender and each Lender represents to the Ad-
ministrative Agent that it has, independently and without re-
liance upon the Administrative Agent or any other Lender, and
based on such documents and information as it has deemed ap-
propriate, made its own evaluation of and investigation into the
business, operations, Property, financial and other condition and
creditworthiness of the Credit Parties and made its own decision
to enter into this Agreement. The Issuing Bank, the Swing Line
Lender and each Lender also represents that it will,
independently and without reliance upon the Administrative Agent,
the Issuing Bank, the Swing Line Lender or any other Lender, and
based on such documents and information as it shall deem ap-
propriate at the time, continue to make its own credit analysis,
evaluations and decisions in taking or not taking action under
the Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, Prop-
erty, financial and other condition and creditworthiness of the
Credit Parties. Except for notices, reports and other documents
expressly required to be furnished to the Issuing Bank, the Swing
Line Lender and the Lenders by the Administrative Agent under the
Loan Documents, the Administrative Agent shall not have any duty
or responsibility to provide the Issuing Bank, the Swing Line
Lender or any Lender with any credit or other information con-
cerning the business, operations, Property, financial and other
condition or creditworthiness of the Credit Parties which may
come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
G. Indemnification
Each Lender agrees to indemnify and
reimburse the Administrative Agent in its capacity as such (to
the extent not promptly reimbursed by the Credit Parties and
without limiting the obligation of the Credit Parties to do so),
pro rata according to (i) at any time when no Loans are
outstanding, its Commitment Percentage, or if no Commitments then
exist, its Commitment Percentage on the last day on which
Commitments did exist, and (ii) at any time when Loans are
outstanding (x) if the Commitments then exist, its Commitment
Percentage or (y) if the Commitments have been terminated or
otherwise no longer exist, the percentage equal to the fraction
(A) the numerator of which is the Credit Exposure of such Lender
108<PAGE>
and (B) the denominator of which is the Aggregate Credit
Exposure, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever including any
amounts paid to the Lenders (through the Administrative Agent) by
the Credit Parties pursuant to the terms of the Loan Documents,
that are subsequently rescinded or avoided, or must otherwise be
restored or returned) which may at any time (including at any
time following the payment of the Loans or the reimbursement
obligations hereunder with respect to the Letters of Credit) be
imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of the Loan Documents
or any other documents contemplated by or referred to herein or
the transactions contemplated hereby or thereby or any action
taken or omitted to be taken by the Administrative Agent under or
in connection with the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent
resulting from the finally adjudicated gross negligence or will-
ful misconduct of the Administrative Agent. Without limitation
of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its pro rata share
(calculated as set forth in the first sentence of this Section)
of any unpaid costs and expenses (including reasonable fees and
expenses of counsel) payable by the Credit Parties under Section
11.5, to the extent that the Administrative Agent has not been
reimbursed for such costs and expenses by the Credit Parties.
The failure of any Lender to reimburse the Administrative Agent
promptly upon demand for its pro rata share (as so calculated) of
any amount required to be paid by the Lenders to the Administra-
tive Agent as provided in this Section shall not relieve any
other Lender of its obligation hereunder to reimburse the Ad-
ministrative Agent for its pro rata share (as so calculated) of
such amount, but no Lender shall be responsible for the failure
of any other Lender to reimburse the Administrative Agent for
such other Lender's pro rata share (as so calculated) of such
amount. The agreements in this Section shall survive the payment
of all amounts payable under the Loan Documents.
H. Administrative Agent in Its Individual
Capacity
BNY and its affiliates may make loans to,
accept deposits from, issue letters of credit for the account of,
and generally engage in any kind of business with, the Credit
Parties or any of the Subsidiaries of the Parent as though BNY
were not the Issuing Bank, the Swing Line Lender or the Admin-
istrative Agent hereunder. With respect to the Commitment, the
Swing Line Commitment, the Individual Currency Commitment and the
Letter of Credit Commitment of BNY and the Loans made by BNY, and
the Letters of Credit issued by BNY, BNY shall have the same
109<PAGE>
rights and powers under the Loan Documents as any Lender and may
exercise the same as though it were not the Issuing Bank, the
Swing Line Lender or the Administrative Agent, and the terms
"Lender" and "Lenders" shall in each case include BNY.
I. Successor Administrative Agent
If at any time the Administrative Agent
deems it advisable, in its sole discretion, it may submit to each
of the Issuing Bank, the Swing Line Lender and each Lender a
written notice of its resignation as Administrative Agent under
the Loan Documents, such resignation to be effective upon the
written acceptance of the duties of the Administrative Agent
under the Loan Documents by a successor Administrative Agent
appointed by the Required Lenders, provided, however, that if no
such appointment is made and given within 30 days after the
delivery of such notice of resignation, the Administrative Agent
shall have the right to appoint a successor Administrative Agent.
A successor Administrative Agent shall be a commercial bank orga-
nized under the laws of the United States of America or any State
thereof and having a combined capital, surplus, and undivided
profits of at least $500,000,000 and, provided that no Default or
Event of Default shall exist, shall be reasonably satisfactory to
the Parent. Upon the acceptance of any appointment as Ad-
ministrative 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 du-
ties of the retiring Administrative Agent, and the retiring
Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be termi-
nated. The Credit Parties, the Issuing Bank, the Swing Line
Lender and the Lenders shall execute such documents as shall be
necessary to effect such appointment. After any retiring
Administrative Agent's resignation as Administrative Agent, the
provisions of the Loan Documents shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
XI. OTHER PROVISIONS
A. Amendments and Waivers
(a) With the written consent of the
Required Lenders, the Administrative Agent, the Parent and the
other appropriate Credit Parties may, from time to time, enter
into written amendments, supplements or modifications of any of
the Loan Documents and, with the consent of the Required Lenders,
the Administrative Agent on behalf of the Issuing Bank, the Swing
Line Lender and the Lenders may execute and deliver to any such
parties a written instrument waiving or granting a consent to a
departure from, on such terms and conditions as the
110<PAGE>
Administrative Agent may specify in such instrument, any of the
requirements of any of the Loan Documents or any Default or Event
of Default and its consequences; provided, however, that:
(i) no such amendment, supplement,
modification, waiver or consent shall increase or decrease the
Commitment of any Lender without the consent of such Lender, or
increase or decrease any Individual Currency Commitment of any
Lender without the consent of such Lender;
(ii) without the consent of all of the
Lenders, (A) extend the Maturity Date, (B) decrease the rate or
extend the time of payment of interest of, or extend the time of
payment or forgive the principal amount of, or change the pro
rata allocation of payments under, any Loan or reimbursement
obligation with respect to any Letter of Credit, (C) decrease or
extend the time of payment of the Facility Fee or Letter of
Credit Commissions, (D) change the provisions of Sections 2.14,
11.1 or 11.7(a), (E) change the definition of Required Lenders,
(F) change the definition of Core Currencies so as to add any
additional currency as a Core Currency, (G) release the Guaranty,
(H) change the several nature of the obligations of the Lenders
under the Loan Documents, or (I) increase the Aggregate
Commitments to an amount in excess of $160,000,000;
(iii) without the written consent of the
Issuing Bank, no such amendment, supplement, modification or
waiver shall change the Letter of Credit Commitment, change the
amount or the time of payment of the Letter of Credit Commis-
sions, or change any other term or provision which relates to the
Letter of Credit Commitment or the Letters of Credit;
(iv) without the written consent of the
Swing Line Lender, no such amendment, supplement, modification or
waiver shall change the Swing Line Commitment, change the amount
or the time of payment of the Swing Line Loans or interest
thereon or change any other term or provision which relates to
the Swing Line Commitment or the Swing Line Loans; and
(v) without the written consent of the
Administrative Agent, no such amendment, supplement, modification
or waiver shall amend, modify or waive any provision of Section
10 or otherwise change any of the rights or obligations of the
Administrative Agent under the Loan Documents.
(b) Notwithstanding anything to the
contrary contained herein, the Parent may at any time or from
time to time, at the Parent's sole cost and expense, request any
Lender to increase its Commitment, or any other bank, insurance
company, pension fund, mutual fund or other financial institution
(each a "Proposed Lender"; each such Proposed Lender to be
reasonably satisfactory to the Swing Line Lender and the Issuing
111<PAGE>
Bank) to provide a new Commitment, by submitting a supplement to
this Agreement to the Administrative Agent, the Issuing Bank, the
Swing Line Lender and the Credit Parties. If such supplement is
in all respects satisfactory to it, the Administrative Agent, the
Issuing Bank, the Swing Line Lender, the Parent, each other
Credit Party and such Lender or Proposed Lender, as the case may
be, shall each execute a copy thereof and deliver a copy thereof
to the Administrative Agent, the Parent and such Lender or such
Proposed Lender, as the case may be. Upon execution and delivery
of such supplement, (i) in the case of such Lender, the amount of
such Lender's Commitment shall be increased to the amount set
forth in such supplement, (ii) in the case of such Proposed
Lender, such Proposed Lender shall become a party hereto and
shall for all purposes of this Agreement and the other Loan
Documents be deemed a "Lender" with a Commitment and one or more
Individual Currency Commitments in the respective amounts set
forth in such supplement and (iii) in each case, the Commitments
and the Commitment Percentages set forth in Exhibit A-1 and the
Individual Commitments set forth in Exhibit A-2 shall be adjusted
accordingly by the Administrative Agent and a new Exhibit A-1 and
a new Exhibit A-2 shall be distributed by the Administrative
Agent to the Parent (on behalf of all Borrowers) and each Lender;
provided, however, that:
(x) immediately after giving effect
thereto, the Aggregate Commitments shall not exceed $160,000,000;
and
(y) notwithstanding anything to the
contrary contained in Section 11.7, if immediately after giving
effect to the events described in Sections 11.1(b)(i) or
11.1(b)(ii), as the case may be, Revolving Loans shall or would
be outstanding, then such Lender or such Proposed Lender, as the
case may be, shall enter into a master assignment and acceptance
agreement with the other Lenders in all respects reasonably
satisfactory to the other Lenders, pursuant to which each other
Lender shall sell, assign, transfer and negotiate to it a portion
of its Revolving Loans necessary to reflect the Commitments as
adjusted in accordance with Section 11.1(b)(iii).
(c) Any such amendment, supplement,
modification or waiver pursuant to this Section 11.1 shall be
binding upon the parties to the applicable agreement, all present
and future Lenders and the Administrative Agent. In the case of
any waiver, the parties to the Loan Documents, the Issuing Bank,
the Swing Line Lender, the Lenders and the Administrative Agent
shall be restored to their former position and rights thereunder
to the extent provided for in such waiver, and any Default or
Event of Default waived shall not extend to any subsequent or
other Default or Event of Default, or impair any right consequent
thereon. The Loan Documents may not be amended orally or by any
course of conduct.
112<PAGE>
(d) If any assignment made pursuant to
subsection (b)(y) above shall be made to any Proposed Lender and
such Proposed Lender is not a U.S. Person, such Proposed Lender
shall furnish such certificates, documents or other evidence to
the Parent, the Borrowers, the Lenders and the Administrative
Agent as shall be required by Section 2.13(e) or 2.13(f).
B. Notices
All notices and other communications under
the Loan Documents shall be given to the parties hereto at the
following addresses:
(i) if to the Parent or a Borrower, at its
Address for Notices set forth on Exhibit S or as set forth on the
applicable Borrower Addendum;
(ii) if to any Lender, at its Address
for Notices set forth on Exhibit R;
(iii) if to the Administrative Agent, at
its Address for Notices set forth on Exhibit Q;
(iv) if to the Swing Line Lender, at its
Address for Notices set forth on Exhibit R;
(v) if to the Issuing Bank, at its Address
for Notices set forth on Exhibit R;
or in any of the foregoing cases at such other address and/or to
such other Person as a party hereto may hereafter specify for
that purpose by written notice to the Parent, the Borrowers and
the Administrative Agent. Such notices and other communications
will be effective only if and when given in writing, and shall be
deemed to have been given three (3) days after deposit in the
mail, designated as certified mail, return receipt requested,
postage-prepaid, at the applicable address specified above, or
when delivered at the applicable address specified above, or when
sent by telecopy addressed to the party to which such notice is
directed at its address determined as provided above and receipt
is confirmed, except that any notice, request or demand by the
Parent or any Borrower to or upon the Administrative Agent, the
Swing Line Lender, the Issuing Bank or the Lenders pursuant to
Sections 2.3, 2.6, 2.9, 2.10, 2.11, 2.12 or 2.19 shall not be
effective until received. Any party to a Loan Document may rely
on signatures of the parties thereto which are transmitted by fax
or other electronic means as fully as if originally signed.
C. No Waiver; Cumulative Remedies
No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Swing
113<PAGE>
Line Lender, the Issuing Bank or any Lender, any right, remedy,
power or privilege under the Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege under the Loan Documents
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights,
remedies, powers and privileges under the Loan Documents are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
D. Survival of Representations and Warranties
All representations and warranties made
under the Loan Documents and in any document, certificate or
statement delivered pursuant thereto or in connection therewith
shall survive the execution and delivery thereof.
E. Payment of Expenses and Taxes
The Parent and each Borrower (to the
extent of such other Borrower's Proportionate Share of the amount
at issue) severally agrees, promptly upon presentation of a
statement or invoice therefor, and whether any Loan is made, or
any Letter of Credit is issued (i) to pay or reimburse the
Administrative Agent for all of the Administrative Agent's
out-of-pocket costs and expenses reasonably incurred in con-
nection with the preparation of the Loan Documents and any
amendment, supplement or modification (whether or not executed)
to the Loan Documents, any documents prepared in connection
therewith and the consummation of the transactions contemplated
thereby, including the reasonable fees and disbursements of
Special Counsel, (ii) to pay or reimburse the Administrative
Agent, the Issuing Bank, the Swing Line Lender and the Lenders
for all of their respective costs and expenses, including reason-
able fees and disbursements of counsel, incurred in connection
with (A) any Default or Event of Default and any enforcement or
collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether con-
summated or not) of the obligations of the Parent and the
Borrowers under the Loan Documents and (B) the enforcement of
this Section, (iii) to pay, indemnify, and hold each Lender, the
Swing Line Lender, the Issuing Bank and the Administrative Agent
harmless from and against, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of
any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or
in respect of, the Loan Documents and any such other documents,
and (iv) to pay, indemnify and hold each Lender, the Swing Line
Lender, the Issuing Bank and the Administrative Agent and each of
114<PAGE>
their respective officers, directors and employees harmless from
and against any and all other liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
(including reasonable counsel fees and disbursements) with
respect to the enforcement and performance of the Loan Documents
and the use of the proceeds of the Loans and the Letters of
Credit (all the foregoing, collectively, the "indemnified li-
abilities"); provided, however, that neither the Parent nor the
Borrowers shall have any obligation hereunder to pay indemnified
liabilities to the Administrative Agent, the Swing Line Lender,
the Issuing Bank or any Lender arising from the finally adju-
dicated gross negligence or willful misconduct of the
Administrative Agent, the Swing Line Lender, the Issuing Bank or
such Lender or claims between one indemnified party and another
indemnified party. The agreements in this Section shall survive
the termination of the Aggregate Commitments, the Swing Line
Commitment, the Letter of Credit Commitment and the Individual
Currency Commitments and the payment of all amounts payable under
the Loan Documents.
F. Determination of Dollar Equivalent
For purposes of the Loan Documents, the
Dollar Equivalent of each Alternate Currency Loan and each Letter
of Credit designated in an Alternate Currency shall be
recalculated (i) on the first day of each Borrowing/Issuance
Period, (ii) on the date that the Agent shall have received a Bid
Accept/Reject Letter accepting a Bid or a Negotiated Rate
Confirmation, (iii) on each date that the Aggregate Commitments
are, or the Swing Line Commitment or any Individual Currency
Commitment is, reduced and (iv) on the last Business Day of each
month unless the Dollar Equivalent was recalculated pursuant to
clause (i), (ii) or (iii) during such month. The Dollar
Equivalent for each Alternate Currency Loan and each Letter of
Credit designated in an Alternate Currency shall remain in effect
until the same is recalculated by the Administrative Agent as
provided above and notice of such recalculation is received by
the Parent, it being understood that until such notice is re-
ceived, the Dollar Equivalent shall be that Dollar Equivalent.
The Administrative Agent shall promptly notify the Parent, the
Issuing Bank, the Swing Line Lender and the Lenders of each such
determination of the Dollar Equivalent for each Alternate Cur-
rency Loan and each Letter of Credit designated in an Alternate
Currency.
G. Assignments and Participations
(a) This Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of the
Parent, the Borrowers, the Lenders, the Swing Line Lender, the
Issuing Bank, the Administrative Agent, and their respective
115<PAGE>
successors and assigns, except that neither the Parent nor the
Borrowers may assign, delegate or transfer any of their rights or
obligations under the Loan Documents without the prior written
consent of the Administrative Agent, the Issuing Bank, the Swing
Line Lender and each Lender.
(b) Except as provided in Section 11.1(b),
each Lender shall have the right at any time, upon written notice
to the Administrative Agent of its intent to do so, to sell,
assign, transfer or negotiate all or any part of such Lender's
rights and obligations under the Loan Documents to one or more of
its affiliates, to one or more of the other Lenders (or to
affiliates of such other Lenders) or, with the prior written con-
sent of the Parent, the Swing Line Lender and the Issuing Bank
(which consents shall not be unreasonably withheld), to sell, as-
sign, transfer or negotiate all or any part of such Lender's
rights and obligations under the Loan Documents to any other
bank, insurance company, pension fund, mutual fund or other
financial institution, provided that (i) each such sale, assign-
ment, transfer or negotiation (other than sales, assignments,
transfers or negotiations (x) to affiliates of such Lender or (y)
of a Lender's entire interest) shall be in a minimum amount of
$5,000,000, and (ii) there shall be paid to the Administrative
Agent by the assigning or assignee Lender a fee (the "Assignment
Fee") of $3,000. For each assignment, the parties to such
assignment shall execute and deliver to the Administrative Agent
for its acceptance and recording an Assignment and Acceptance
Agreement. Upon such execution, delivery, acceptance and record-
ing by the Administrative Agent, from and after the effective
date specified in such Assignment and Acceptance Agreement, the
assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance Agreement, the as-
signor Lender thereunder shall be released from its obligations
under the Loan Documents. Upon any such sale, assignment or
other transfer, the Commitments and the Commitment Percentages
set forth in Exhibit A-1, and the Individual Currency Commitments
set forth in Exhibit A-2, shall be adjusted accordingly by the
Administrative Agent and a new Exhibit A-1 and a new Exhibit A-2
shall be distributed by the Administrative Agent to the Parent
(on behalf of all Borrowers) and each Lender.
(c) Each Lender may grant participations
in all or any part of its rights and obligations under the Loan
Documents to one or more of its affiliates, to one or more of the
other Lenders (or to affiliates of such other Lenders) or to one
or more other banks, insurance companies, pension funds, mutual
funds or other financial institutions, provided that (i) such
Lender's obligations under the Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to
the other parties to the Loan Documents for the performance of
such obligations, (iii) the Borrowers, the Administrative Agent,
the Swing Line Lender, the Issuing Bank and the other Lenders
116<PAGE>
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the
Loan Documents, (iv) no sub-participations shall be permitted and
(v) the voting rights of any holder of any participation shall be
limited to decisions that in accordance with Section 11.1 require
the consent of all of the Lenders. The Parent and the Borrowers
acknowledge and agree that any such participant shall for pur-
poses of Sections 2.13, 2.14, 2.15, 2.22, 11.5 and 11.10, be
deemed to be a "Lender"; provided, however, neither the Parent
nor the Borrowers shall, at any time, be obligated to pay any
participant in any interest of any Lender hereunder any sum in
excess of the sum which the Parent and the Borrowers would have
been obligated to pay to such Lender in respect of such interest
had such Lender not sold such participation.
(d) If any (i) assignment is made pursuant
to subsection (b) above or (ii) any participation is granted
pursuant to subsection (c) above, shall be made to any Person
that is not a U.S. Person, such Person shall furnish such
certificates, documents or other evidence to the Parent, the
Borrowers and the Administrative Agent, in the case of clause (i)
and to the Parent, the Borrowers and the Lender which sold such
participation in the case of clause (ii), as shall be required by
Section 2.13(e) or 2.13(f).
(e) No Lender shall, as between and among
the Parent, the Borrowers, the Administrative Agent, the Swing
Line Lender, the Issuing Bank and such Lender, be relieved of any
of its obligations under the Loan Documents as a result of any
sale, assignment, transfer or negotiation of, or granting of par-
ticipations in, all or any part of its rights and obligations
under the Loan Documents, except that a Lender shall be relieved
of its obligations under the Loan Documents to the extent of any
such sale, assignment, transfer, or negotiation of all or any
part of its obligations under the Loan Documents pursuant to
subsection (b) above.
(f) Notwithstanding anything to the
contrary contained in this Section, any Lender may at any time or
from time to time assign all or any portion of its rights under
the Loan Documents to a Federal Reserve Bank, provided that any
such assignment shall not release such assignor from its obli-
gations thereunder.
H. Counterparts
Each of the Loan Documents may be executed
by one or more of the parties thereto on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same document. It shall not be
necessary in making proof of any Loan Document to produce or ac-
count for more than one counterpart signed by the party to be
117<PAGE>
charged. An executed counterpart of any Loan Document and of any
amendment, modification, consent or waiver thereto or thereof
transmitted by fax shall be deemed to be an originally executed
counterpart. A copy of any Loan Document signed by all the par-
ties thereto shall be deposited with the Parent (on behalf of all
Borrowers) and the Administrative Agent. Any party to any Loan
Document may rely upon the signatures of any other party thereto
which are transmitted by fax or other electronic means to the
same extent as if originally signed.
I. Adjustments; Set-off
(a) If any Lender (a "Benefited Lender")
shall at any time receive any payment of all or any part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in
Section 9.1 (g) or (h), or otherwise) in a greater proportion
than any such payment to and collateral received by any other
Lender in respect of such other Lender's Loans, or interest
thereon, such Benefited Lender shall purchase for cash from each
of the other Lenders such portion of each such other Lender's
Loans, and shall provide each of such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders, provided, however, that if all or any
portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrowers
agree that each Lender so purchasing a portion of another
Lender's Loans may exercise all rights of payment (including
rights of set-off, to the extent not prohibited by law) with
respect to such portion as fully as if such Lender were the
direct holder of such portion.
(b) In addition to any rights and remedies
of the Lenders provided by law, upon the occurrence of an Event
of Default and the acceleration of the obligations owing in con-
nection with the Loan Documents, or at any time upon the occur-
rence and during the continuance of an Event of Default, under
Section 9.1(a), (b), (g) or (h), each Lender shall have the
right, without prior notice to the Parent or the Borrowers, any
such notice being expressly waived by the Parent and the
Borrowers to the extent not prohibited by applicable law, to set-
off and apply against any indebtedness, whether matured or
unmatured, of the Parent or the Borrowers to such Lender, any
amount owing from such Lender to the Parent or the Borrowers, at,
or at any time after, the happening of any of the above-mentioned
events. To the extent not prohibited by applicable law, the
aforesaid right of set-off may be exercised by such Lender
118<PAGE>
against the Parent and the Borrowers or against any trustee in
bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or at-
tachment creditor of the Parent or the Borrowers, or against
anyone else claiming through or against the Parent or the
Borrowers or such trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by
such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, as-
signment for the benefit of creditors, appointment or application
for the appointment of a receiver, or issuance of execution,
subpoena, order or warrant. Each Lender agrees promptly to
notify the Parent, the Borrowers and the Administrative Agent
after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not affect
the validity of such set-off and application. With respect to
each Borrower, the right of set-off provided for in this Section
11.9(b) shall be limited to the obligations of such Borrower with
respect to Loans made to it and to its Proportionate Share of
other costs, expenses and other amounts.
J. Indemnity
Each of the Borrowers to the extent of its
Proportionate Share and the Parent severally agree to indemnify
and hold harmless the Administrative Agent, the Swing Line
Lender, the Issuing Bank and each Lender and their respective
affiliates, directors, officers, employees, attorneys and agents
(each an "Indemnified Person") with respect to each Indemnified
Person's status under the Loan Documents from and against any
loss, cost, liability, damage or expense (including the rea-
sonable fees and disbursements of counsel of such Indemnified
Person, including all local counsel hired by any such counsel)
incurred by such Indemnified Person in investigating, preparing
for, defending against, or providing evidence, producing
documents or taking any other action in respect of, any commenced
or threatened litigation, administrative proceeding or
investigation under any federal securities law or any other
statute of any jurisdiction, or any regulation, or at common law
or otherwise, which is alleged to arise out of or is based upon
(i) any untrue statement or alleged untrue statement of any
material fact by the Parent or the Borrowers in any document or
schedule executed or filed with any Governmental Authority by or
on behalf of the Parent or the Borrowers; (ii) any omission or
alleged omission to state any material fact required to be stated
in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not
misleading; (iii) any acts, practices or omissions or alleged
acts, practices or omissions of the Parent or the Borrowers or
their respective agents relating to the use of the proceeds of
119<PAGE>
any or all borrowings made by the Borrowers which are alleged to
be in violation of Section 2.18, or in violation of any federal
securities law or of any other statute, regulation or other law
of any jurisdiction applicable thereto; or (iv) any acquisition
or proposed acquisition by the Parent or the Borrowers of all or
a portion of the Stock, or all or a portion of the assets, of any
Person whether such Indemnified Person is a party thereto. The
indemnity set forth herein shall be in addition to any other
obligations or liabilities of the Parent and the Borrowers to
each Indemnified Person under the Loan Documents or at common law
or otherwise, and shall survive any termination of the Loan
Documents, the expiration of the Commitments, the Letter of
Credit Commitment, the Swing Line Commitment, the Individual
Currency Commitments, and the payment of all indebtedness of the
Parent and the Borrowers under the Loan Documents, provided that
the Parent and the Borrowers shall have no obligation under this
Section to an Indemnified Person with respect to any of the
foregoing to the extent found in a final judgment of a court
having jurisdiction to have resulted out of the gross negligence
or wilful misconduct of such Indemnified Person or arising from
claims between one such Indemnified Person and another such
Indemnified Person.
K. GOVERNING LAW
THE LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES THERETO SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
L. Severability
Every provision of this Agreement and the
other Loan Documents is intended to be severable, and if any term
or provision hereof or thereof shall be invalid, illegal or unen-
forceable for any reason, the validity, legality and enforce-
ability of the remaining provisions hereof or thereof shall not
be affected or impaired thereby, and any invalidity, illegality
or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or
provision in any other jurisdiction.
M. Integration
All exhibits to this Agreement and any
other Loan Document shall be deemed to be a part hereof or
thereof, as the case may be. Except for agreements between the
Administrative Agent, the Swing Line Lender, the Issuing Bank and
the Parent with respect to certain fees, the Loan Documents
embody the entire agreement and understanding among the Parent,
the Borrowers, the Administrative Agent, the Swing Line Lender,
the Issuing Bank and the Lenders with respect to the subject
120<PAGE>
matter thereof and supersede all prior agreements and under-
standings among the Parent, the Borrowers, the Administrative
Agent, the Swing Line Lender, the Issuing Bank and the Lenders
with respect to the subject matter thereof.
N. Judgment Currency
(a) Each Credit Party's obligations under
the Loan Documents to make payments in the Applicable Currency
(the "Obligation Currency") shall not be discharged or satisfied
by any tender or recovery pursuant to any judgment expressed in
or converted into any currency other than the Obligation Cur-
rency, except to the extent that, on the Business Day immediately
following the date of such tender or recovery, the Administrative
Agent, the Swing Line Lender, the Issuing Bank or the applicable
Lender, as the case may be, may, in accordance with normal
banking procedures, purchase the Obligation Currency with such
other currency. If for the purpose of obtaining or enforcing
judgment against any Credit Party in any court or in any
jurisdiction, it becomes necessary to convert into any currency
other than the Obligation Currency (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made at the
rate of exchange at which, in accordance with normal banking
procedures in the relevant jurisdiction, the Obligation Currency
could be purchased with the Judgment Currency as of the day im-
mediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Cur-
rency Conversion Date").
(b) If the amount of Obligation Currency
purchased pursuant to the last sentence of subsection (a) above
is less than the sum originally due in the Obligation Currency,
the applicable Credit Party covenants and agrees to indemnify the
applicable recipient against such loss, and if the Obligation
Currency so purchased exceeds the sum originally due to such
recipient, such recipient agrees to remit to the applicable
Credit Party such excess.
O. Confidentiality
Any information disclosed by any Credit
Party to the Administrative Agent or any of the Lenders shall be
used solely for purposes of the Loan Documents and not in any
other manner detrimental to the Parent and, if such information
is not otherwise in the public domain, shall not be disclosed by
the Administrative Agent or such Lender to any other Person
except (i) to its independent accountants, legal counsel and
affiliates (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of
such information and instructed to keep such information
confidential), (ii) pursuant to statutory and regulatory
121<PAGE>
requirements or the request of bank examiners, (iii) pursuant to
any mandatory court order, subpoena or other legal process, (iv)
to the Administrative Agent, the Issuing Bank, the Swing Line
Lender or any other Lender, (v) pursuant to any agreement
heretofore or hereafter made between such Lender and the Parent
which permits such disclosure, (vi) in connection with the
exercise of any remedy under the Loan Documents or (vii) subject
to an agreement containing provisions substantially the same as
those of this Section, to any participant in or assignee of, or
prospective participant in or assignee of, any Loan, Letter of
Credit Commitment, Individual Currency Commitment or Commitment
(it being understood that prior to any such disclosures
contemplated by clauses (ii) and (iii) above, the Agent or such
Lender shall, if practicable, give the Parent prior written
notice of such disclosure).
P. CONSENT TO JURISDICTION
EACH CREDIT PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS. EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED OR NOT PROHIBITED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Q. Service of Process
Each Credit Party hereby irrevocably
consents to the service of process in any suit, action or
proceeding by sending the same by certified mail, return receipt
requested or by overnight courier service, to the address of such
Credit Party set forth in Section 11.2.
R. No Limitation on Service or Suit
Nothing in the Loan Documents or any
modification, waiver, consent or amendment thereto shall affect
the right of the Administrative Agent, the Swing Line Lender, the
Issuing Bank or any Lender to serve process in any manner permit-
ted by law or limit the right of the Administrative Agent, the
Swing Line Lender, the Issuing Bank or any Lender to bring
proceedings against any Credit Party in the courts of any
jurisdiction or jurisdictions in which such Credit Party may be
served.
S. WAIVER OF TRIAL BY JURY
EACH OF THE ADMINISTRATIVE AGENT, THE
122<PAGE>
SWING LINE LENDER, THE ISSUING BANK, THE LENDERS AND EACH CREDIT
PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY.
T. International Banking Facilities
The Parent and the Borrowers acknowledge
that some or all of the Lenders may, in connection with the Loan
Documents, utilize an International banking facility (as defined
in Regulation D).
Each Borrower which is an entity located
outside the United States, understands that it is the policy of
the Board of Governors of the Federal Reserve System that
deposits received by International banking facilities may be used
only to support the non-U.S. operations of a depositor (or its
foreign affiliates) located outside the United States and that
extensions of credit by International banking facilities may be
used only to finance the non-U.S. operations of a customer (or
its foreign affiliates) located outside the United States.
Each Borrower which is an entity located
outside the United States acknowledges that the proceeds of its
borrowings hereunder from an International banking facility will
be used solely to finance its operations outside the United
States, or that of its foreign affiliates.
123<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
TIFFANY & CO.,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY AND COMPANY,
a New York corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. INTERNATIONAL,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
SOCIETE FRANCAISE POUR LE DEVELOPPMENT DE LA
PORCELAINE D'ART (S.A.R.L.), a French
corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. OF NEW YORK LIMITED, a Hong Kong
corporation
By: ________________________
Name: ________________________
Title: ________________________
124<PAGE>
TIFFANY-FARAONE S.P.A.,
an Italian corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. JAPAN INC.,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. PTE. LTD.,
a Singapore corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO.,
a United Kingdom corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. WATCH FACTORY S.A.,
a Swiss corporation
By: ________________________
Name: ________________________
Title: ________________________
125<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
THE BANK OF NEW YORK,
as the Swing Line Lender, as the Issuing Bank,
as a Lender, as Arranging Agent and as Adminis-
trative Agent
By: ________________________
Name: ________________________
Title: ________________________
126<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
CHEMICAL BANK
By: ________________________
Name: ________________________
Title: ________________________
127<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
CREDIT SUISSE
By: ________________________
Name: ________________________
Title: ________________________
128<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
THE DAI-ICHI KANGYO BANK, LIMITED (NEW YORK
BRANCH)
By: ________________________
Name: ________________________
Title: ________________________
129<PAGE>
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by
their proper and duly authorized officers as of the day and year
first above written.
THE FUJI BANK, LTD.
By: ________________________
Name: ________________________
Title: ________________________
130<PAGE>
TIFFANY EXHIBIT A-1
LIST OF COMMITMENTS
<TABLE>
<CAPTION>
Commitment
Lender Commitment Percentage
-------------------------- ------------------ -------------
<S> <C> <C>
The Bank of New York $30,000,000.00 0.23076924
Chemical Bank 25,000,000.00 0.19230769
Credit Suisse 25,000,000.00 0.19230769
The Dai-Ichi Kangyo Bank,
Limited (New York Branch) 25,000,000.00 0.19230769
The Fuji Bank, Limited 25,000,000.00 0.19230769
TOTAL $130,000,000.00 100%
=============== =====
</TABLE>
131<PAGE>
TIFFANY EXHIBIT A-2
LIST OF INDIVIDUAL CURRENCY COMMITMENTS
Australian Dollars
-------------------
Lender Individual Currency Commitment
Dai-Ichi Kangyo $3,000,000.00
Fuji Bank $3,000,000.00
Canadian Dollars
-----------------
Lender Individual Currency Commitment
Credit Suisse $5,000,000.00
Hong Kong Dollars
------------------
Lender Individual Currency Commitment
BNY $3,000,000.00
Italian Lira
--------------
Lender Individual Currency Commitment
Chemical Bank $3,000,000.00
Credit Suisse $5,000,000.00
Korean Won
--------------
Lender Individual Currency Commitment
BNY $3,000,000.00
Malaysian Ringgit
------------------
Lender Individual Currency Commitment
- -
Mexican Pesos
-------------------
Lender Individual Currency Commitment
- -
New Taiwan Dollars
-------------------
Lender Individual Currency Commitment
BNY $3,000,000.00
132<PAGE>
Philippine Pesos
-----------------
Lender Individual Currency Commitment
- -
Singapore Dollars
------------------
Lender Individual Currency Commitment
BNY $3,000,000.00
Swiss Francs
--------------------
Lender Individual Currency Commitment
Chemical Bank $3,000,000.00
Credit Suisse $5,000,000.00
Thai Baht
---------------------
Lender Individual Currency Commitment
- -
133<PAGE>
LEASE AGREEMENT
dated as of
August 1, 1995
by and between
First Fidelity Bank, National Association, not in its individual
capacity,
but solely as the trustee under that certain
Trust Agreement 1995-1 dated as of July 1, 1995, as Owner-Lessor
and
TIFFANY AND COMPANY, a New York corporation, as Lessee<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. AGREEMENT TO LEASE . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4. CONDITIONS PRECEDENT PRIOR TO BASIC TERM COMMENCEMENT DATE . . 4
SECTION 5. RENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 7. NET LEASE; NONTERMINABILITY . . . . . . . . . . . . . . . . . . 8
SECTION 8. TAXES AND OTHER CHARGES; LAWS AND AGREEMENTS . . . . . . . . . 9
SECTION 9. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10. OWNERSHIP OF THE LEASED PROPERTY . . . . . . . . . . . . . . . 12
SECTION 11. OWNER'S DISCLAIMER; ACKNOWLEDGEMENT BY LESSEE . . . . . . . . 12
SECTION 12. REPRESENTATIONS OF PARTIES . . . . . . . . . . . . . . . . . . 13
SECTION 13. MAINTENANCE; QUIET ENJOYMENT . . . . . . . . . . . . . . . . . 16
SECTION 14. COMPLIANCE WITH LEGAL REQUIREMENTS . . . . . . . . . . . . . . 18
-2-
<PAGE>
SECTION 15. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 16. LOSS, DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . 21
SECTION 17. ADDITIONS AND IMPROVEMENTS; REMOVAL . . . . . . . . . . . . . 25
SECTION 18. RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 19. ASSIGNMENTS AND SUBLEASING . . . . . . . . . . . . . . . . . . 26
SECTION 20. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . 28
SECTION 21. ENVIRONMENTAL INDEMNITY. . . . . . . . . . . . . . . . . . . . 31
SECTION 22. INDEMNIFICATION AND HOLD HARMLESS AGREEMENT . . . . . . . . . 32
SECTION 23. EVENTS OF DEFAULT BY LESSEE . . . . . . . . . . . . . . . . . 34
SECTION 24. REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . 36
SECTION 25. OWNER'S RIGHT TO PERFORM FOR LESSEE . . . . . . . . . . . . . 38
SECTION 26. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 27. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 28. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 29. LESSEE'S EXTENSION LEASE OPTIONS AND END OF TERM PURCHASE
OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 30. THIRD PARTY SALE OF LEASED PROPERTY . . . . . . . . . . . . . 41
SECTION 31. END OF TERM ADJUSTMENT . . . . . . . . . . . . . . . . . . . . 43
-3-
<PAGE>
SECTION 32. PROCEDURE FOR OWNER CONVEYANCE . . . . . . . . . . . . . . . . 44
SECTION 33. TIME OF THE ESSENCE; MANNER OF PAYMENT . . . . . . . . . . . . 45
SECTION 34. RETURN OF LEASED PROPERTY . . . . . . . . . . . . . . . . . . 45
SECTION 35. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . 47
SECTION 36. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 37. NO RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 38. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 39. VENUE; GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 48
SECTION 40. ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . . . . . . 49
SECTION 41. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . 49
SECTION 42. NONRECOURSE . . . . . . . . . . . . . . . . . . . . . . . . . 49
-4-
<PAGE>
LIST OF EXHIBITS
EXHIBIT A Legal Description of Land
EXHIBIT A-1 Description of Improvements to be
Constructed pursuant to Construction
Agency Agreement
EXHIBIT B Rental Factor
EXHIBIT C Interest Rate Terms
EXHIBIT D Termination Value Percentages
EXHIBIT E Purchase Price Percentages
EXHIBIT F Percentages for Maximum Lessee
Risk Amount and Maximum Owner Risk Amount
LIST OF SCHEDULES
SCHEDULE I List of Listed Permits
SCHEDULE II List of Acceptable Hazardous Materials
-5-
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"), dated as of August 1,
1995, by and between First Fidelity Bank, National Association, a
national banking association, not in its individual capacity,
except as expressly set forth herein, but solely as trustee under
that certain Trust Agreement 1995-1 dated as of July 1, 1995, as
owner-lessor hereunder ("Owner") and TIFFANY AND COMPANY, a
corporation organized and operated under the laws of the State of
New York, as lessee hereunder ("Lessee").
PRELIMINARY STATEMENT
Lessee has entered into an Agreement for Purchase and Sale
of Real Estate by and between Pru Beta-3, as seller, and Lessee,
as purchaser, dated as of November 4, 1994 (the "P&S") to acquire
a parcel of land consisting of approximately 40.713 acres, more
or less, located in the Township of Parsippany-Troy Hills, Morris
County, New Jersey, more particularly described in Exhibit A
attached hereto (the "Land"). Lessee wishes to cause the
construction of an office building, distribution center,
warehouse facility and light manufacturing facility more
particularly described in Exhibit A-1 hereof (all site
improvements, base building, building systems, equipment and
related fixtures now or hereafter existing on the Land, and any
substitutions or replacements of or additions to the same are
referred to as the "Improvements"). Lessee has determined that
the most advantageous financing for the acquisition of the Land
and the design and construction of the Improvements can be
realized by assigning purchaser's rights under the P&S to Owner,
permitting Owner to purchase the Land, contracting with Owner to
construct the Improvements as Owner's agent and leasing the Land
and Improvements (collectively, with all easements, privileges,
rights and appurtenances thereto, the "Leased Property") from
Owner pursuant to this Lease. Concurrently with the assignment
of the P&S by Lessee to Owner, and Owner's purchase of the Land,
Owner and Lessee will enter into this Lease for the Leased
Property, which Lease is intended to be an operating lease for
accounting purposes under GAAP. The date upon which Lessee
assigns the P&S to the Owner, the Owner acquires the Land and
Lessee and Owner enter into this Lease is referred to as the
"Closing Date".
On the Closing Date, Owner will purchase the Land pursuant
to the P&S for a purchase price of $4,800,000 and pay a broker's
commission equal to eight percent (8%) of said purchase price to
Cushman & Wakefield of New Jersey, Inc., a portion of which
amount will be provided by the beneficiary of Owner, First
-6-
<PAGE>
Fidelity Bank, not in its individual capacity but solely as
trustee under that certain Trust Agreement 1995-2 dated as of
July 1, 1995 (the "Beneficiary"), from the proceeds of a loan
(the "Investor Loan") in the amount of $1,925,000 to be made to
the Beneficiary by Stellar Capital Corporation ("Construction
Lender"). Lessee and Owner will enter into a Construction Agency
Agreement on the Closing Date which will provide, among other
things, that Lessee will construct the Improvements upon the Land
as agent for Owner. Pursuant to the Construction Agency
Agreement, Owner will finance the purchase of the Land and
payment of the brokerage commission therefor (to the extent the
proceeds of the Investor Loan are insufficient) and will finance
the construction of the Improvements from the proceeds from a
Construction Loan to be made to Owner by the Construction Lender
in an amount not to exceed $36,575,000. Lessee, Owner and
Construction Lender have agreed upon a total "Project Budget"
proposed by Lessee for all Development Costs. Lessee has agreed
that if at any time the undisbursed portion of the funds
available for advance by the Construction Lender under the
Construction Loan, together with any unadvanced Owner's Equity,
is not sufficient to pay for all Development Costs, then Lessee,
out of its own funds, will pay all Development Costs (or such
Development Costs of the particular line item of the Project
Budget for which there is a deficiency) until (A) there is no
longer any deficiency and (B) there are sufficient undisbursed
funds available under the Loan to pay all remaining Development
Costs. The Project Budget includes three major subcategories of
Development Costs including "Acquisition Costs", "Hard Costs" and
"Soft Costs". The Project Budget does not include any amounts
allocated for the cost of furniture, fixtures and equipment,
other than equipment which forms a part of the building systems.
The Lease provides for an Interim Term during which the
Improvements are to be completed by Lessee (provided, however,
such completion shall take place on or before January 31, 1997,
subject to extension pursuant to Section 4(a) of the Lease). If
Lessee satisfies all of the conditions set forth in Section 4(a)
of the Lease on or prior to the date set forth therein, has not
previously given notice to the Owner that it has elected not to
enter into the Basic Lease Term and Owner is not entitled to
terminate the leasehold estate created hereby pursuant to Section
4(c) hereof, a Basic Lease Term shall commence and continue until
the Basic Lease Term Expiration Date. Upon the expiration of the
Basic Lease Term, Lessee will have options to extend the Lease
for nine (9) consecutive one (1)-year Extension Lease Terms. At
the end of the Interim Lease Term, Basic Lease Term or any
Extension Lease Term, Lessee has an option to purchase the Leased
Property for the Purchase Price set forth in this Lease. If
Lessee does not exercise its option to purchase the Leased
Property, Lessee is obligated to solicit bids for the purchase of
-7-
<PAGE>
the Leased Property from third parties. If the Leased Property
is sold to a third party pursuant to the provisions of the Lease
or is returned to the Owner upon the completion of the Interim
Lease Term, the Basic Lease Term or any Extension Lease Term or
upon any Termination Date, Lessee will be obligated to pay the
applicable End of Term Adjustment provided for in this Lease to
Owner.
On the date hereof, BOT Financial Corporation or a designee
thereof ("LC Issuer") shall enter into a Reimbursement and
Remarketing Agreement with the Beneficiary pursuant to which the
LC Issuer will issue or agree to issue its Letter of Credit for
the benefit of the holder of the Investor Loan in an amount up to
the Maximum Owner Risk Amount.
The construction of the Improvements shall be undertaken by
Lessee, as agent under the Construction Agency Agreement. In
connection therewith, Lessee has previously entered into and
assigned to Owner on the Closing Date or will enter into or will
receive and approve on or before the Closing Date as agent
thereunder, the following documents:
(a) Guaranteed Maximum Price Construction Contract with
Turner Construction Company, as general contractor dated July 31,
1995;
(b) Agreement for Architectural and Engineering Services
with Perkins & Will Architects, P.C., dated December 15, 1993
("Architect's Contract");
(c) Agreements other design and engineering services which
are more particularly listed in Exhibit E to the Construction
Loan Agreement;
(d) The plans, specifications and working drawings prepared
by the Architect which are more particularly listed in Exhibit E
to the Construction Loan Agreement; and
(e) The other contracts and documents described in Section
5.1 of the Construction Loan Agreement.
The foregoing documents, as they may be hereafter amended or
supplemented in accordance with the Transaction Documents from
time to time, are referred to as the "Approved Construction
Documents".
At Closing, Lessee, as agent for Owner under the
Construction Agency Agreement, will accept the assignment of the
Development Services Agreement made as of the 4th day of
November, 1994 between Lessee and PIC Realty, a Delaware
-8-
<PAGE>
corporation having an office at 751 Broad Street, Newark, New
Jersey and Lessee shall be reimbursed for all costs incurred
under such Development Services Agreement (to the extent of such
expense as shown on the Project Budget) pursuant to the terms of
the Construction Agency Agreement.
In consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
Section 1. Definitions. Unless the context otherwise
requires, and except as specifically provided herein, each of the
capitalized terms shall have the meaning set forth in the
Definitions Appendix attached to this Lease, as the same may be
amended, modified or supplemented from time to time.
Unless otherwise expressly stated, the words "this Lease,"
"herein," "hereunder," "hereof" or other like words mean and
include this Lease, all exhibits hereto and each amendment and
supplement hereto.
Section 2. Agreement to Lease. Owner hereby leases, lets
and demises unto Lessee, and Lessee hereby leases, rents and
takes possession from Owner, all of the Owner's right, title and
interest in (i) the Land, (ii) all Improvements now or hereafter
constructed thereon and (iii) all easements, privileges, rights
and appurtenances thereto (the Land, Improvements and all such
easements, privileges, rights and appurtenances are collectively
referred to herein as the "Leased Property"), to have and to hold
the same for the Term, subject to the covenants, agreements,
terms, conditions, limitations and provisions hereinafter set
forth.
Section 3. Term.
The Interim Lease Term shall commence on the Closing Date,
and, unless this Lease is sooner terminated pursuant to the
provisions hereof, shall end on the day immediately preceding the
Basic Term Commencement Date. Subject to the conditions set
forth in Section 4(a) below and the exercise of Lessee's right to
elect to enter into the Basic Lease Term pursuant to Section 29
hereof, the Basic Lease Term shall commence on the Basic Term
Commencement Date, and, unless this Lease is sooner terminated
pursuant to the provisions hereof, shall end on the Basic Lease
Term Expiration Date, or if this Lease is extended pursuant to
Section 29(a) hereof, on the last day of the last Extension Lease
Term hereof for which this Lease is renewed.
Section 4. Conditions Precedent Prior to Basic Term
Commencement Date.
-9-
<PAGE>
(a) Unless otherwise waived in writing by the Owner or the
Lender, the right of Lessee to lease the Leased Property from the
Owner under this Lease beyond the Interim Lease Term is subject
to the fulfillment of each of the following conditions of the
Owner during and as of the end of the Interim Lease Term: (i)
Lessee shall perform all of its obligations under the
Construction Agency Agreement, as agent or for itself, during the
Interim Lease Term; (ii) no event which is a Default or an Event
of Default hereunder or under the Construction Agency Agreement
has occurred and is continuing; (iii) Owner shall have received a
certificate from the Lender's Construction Consultant that the
Improvements are Substantially Complete and shall also have
received such other documents, appraisals, opinions, certificates
and waivers, as Owner may require in the exercise of reasonable
business judgment, including, if requested, certificates from the
Architect and General Contractor, in form and substance
reasonably satisfactory to assure Owner that the Improvements are
ready for occupancy and that no liens or claims are outstanding
against the Leased Property (other than Permitted Liens), and
(iv) Lessee shall have satisfied each of the foregoing conditions
on or before January 31, 1997, provided, however, that if an act
or event of Force Majeure occurs which prevents Lessee from
completing the Improvements by January 31, 1997, Lessee shall be
entitled to an extension beyond January 31, 1997 in which to
satisfy such conditions, provided, however, that such extension
shall not extend beyond the earlier to occur of July 31, 1997 or
the number of days which the act or event of Force Majeure
delayed completion of the Improvements.
(b) If such conditions set forth in Section 4(a) above have
not been met in full to the satisfaction of Owner by January 31,
1997 (or such later date determined in accordance with paragraph
(a) above for delays due to an act or event of Force Majeure) and
regardless of whether Lessee has elected not to enter the Basic
Lease Term pursuant to Section 29(a) hereof, Owner may declare by
written notice to Lessee that an amount equal to the sum of (i)
all unpaid Base Rental and Additional Rental for all Rental
Periods through the payment date specified in the notice, plus
(ii) an amount equal to one hundred percent (100%) of all Project
Costs (incurred through the date of payment) including, without
limitation, all Interim Rental accruing during the Construction
Period, plus, (iii) to the extent such amounts have not been
included in Project Costs, all interest, costs, fees,
reimbursements and all other amounts due and payable to either
Owner or Lender under the Transaction Documents, including,
without limitation, the costs to complete the Improvements
incurred to the date of payment shall be due and payable on a
date specified by Owner in such notice. Upon payment of such
amount to Owner by Lessee, Owner shall transfer to Lessee all of
the Owner's interest in the Leased Property to Lessee in
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accordance with the terms and provisions of Section 32 hereof,
and this Lease shall terminate without any further action being
required, and all rights and obligations hereunder and thereunder
shall cease, except for those which by their terms survive the
termination of this Lease.
(c) Lessee agrees that it shall use its reasonable good
faith efforts to arrange for (x) a Long-Term Loan between the
Owner and Long-Term Lender on terms and conditions acceptable to
Owner and Lessee to be effective as of the Conversion Date and
(y) the assignment as of the Conversion Date of the Investor Loan
by the Construction Lender for consideration and on terms and
conditions which are acceptable to the Construction Lender, such
arrangements to be made prior to the expiration of the Interim
Lease Term. The financing described in (x) and (y) above is
referred to as the "Takeout Financing." If the Takeout Financing
has not been entered into by the Owner and Long-Term Lender on or
prior to January 31, 1996, the Owner may elect in its sole and
absolute discretion to terminate the leasehold estate created
hereby, such termination to be effective on January 31, 1997 (or
such later date permitted for delays due to an act or event of
Force Majeure by which date Lessee is required to meet in full to
the satisfaction of the Owner the conditions set forth in Section
4(a)) (the date of the termination of the Lessee's leasehold
estate pursuant to this sentence will be deemed the "Termination
Date" applicable to the Interim Lease Term). Unless Lessee
notifies Owner, Lender and LC Issuer in writing on or prior to
January 31, 1996 that such Takeout Financing has been entered
into, it shall be conclusively deemed by the parties hereto that
there has been a failure by Owner and the Long-Term Lender to
enter into the Takeout Financing on or prior to January 31, 1996.
The Owner shall be conclusively deemed to have exercised its
right to elect to terminate the leasehold estate for a failure to
enter into the Takeout Financing unless Owner shall have given
written notice to Lessee on or before February 10, 1996 that the
Owner has not elected to terminate the leasehold estate created
hereby. If Owner elects (or is deemed to have elected) to
terminate the leasehold estate for a failure to enter into the
Takeout Financing as aforesaid, Lessee shall be entitled, at its
option (x) to give notice that the Lessee intends to remarket the
Leased Property in accordance with Section 30(a) hereof and to
pay to Owner on the Termination Date the End of Term Adjustment
as set forth in Section 31(a) or 31(b), as applicable, or (y) to
give notice ("Special Nonreturn Option Notice") that on the
Termination Date, (A) the Leased Property will be sold to a third
party pursuant to a bid which meets the requirements of Section
30(b) below or (B) the Lessee will purchase the Owner's interest
in the Leased Property in accordance with Section 32 hereof for
an amount equal to the Purchase Price applicable to the Interim
Lease Term or (C) if Owner and the Long-Term Lender enter into
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the Takeout Financing on or before January 31, 1997 (or such
later date permitted for delays due to an act or event of Force
Majeure by which date Lessee is required to meet in full to the
satisfaction of the Owner the conditions set forth in Section
4(a) hereof) and the conditions set forth in Section 4(a) hereof
to the commencement of the Basic Term have been met in full to
the satisfaction of the Owner, to enter into the Basic Lease
Term, in which case the election by Owner (whether deemed or
otherwise) to terminate the leasehold estate created hereby shall
be rescinded without further notice or action being required of
any party. To exercise the option set forth in clause (x) above
to remarket the Leased Property and to pay to Owner on the
Termination Date the applicable End of Term Adjustment, the
Lessee shall give written notice to the Owner, Construction
Lender and LC Issuer on or prior to February 15, 1996 that Lessee
intends to exercise such option. If the Lessee elects to
exercise the option set forth in clause (x) above, the Leased
Property shall be returned to the Owner in accordance with the
provisions of Section 34 hereof on the Termination Date (unless
delivered to a bidder in accordance with Section 30(b) hereof).
If Lessee does not give Owner, the Construction Lender and LC
Issuer notice that the Lessee intends to exercise the option set
forth in clause (x) above on or prior to February 15, 1996, the
Lessee shall be conclusively deemed to have issued a Special
Nonreturn Option Notice. If Lessee has issued (or is deemed to
have issued) a Special Nonreturn Option Notice and the Lessee
desires to sell the Property to a third party, it shall be
required to submit a third-party bid which meets the requirements
of Section 30(b) no later than thirty (30) days prior to the
Termination Date; otherwise, (i) the Lessee shall be obligated to
purchase the Leased Property on the Termination Date as if an
election to purchase had been made under Section 29(b) hereof, or
(ii) if the conditions to the rescission of Owner's election to
terminate the leasehold estate of Lessee described in subclause
(C) of clause (y) above have been met, to enter into the Basic
Lease Term. If the Lessee elects to purchase the Leased Property
after a Special Nonreturn Option Notice has been issued (or
deemed issued), then notwithstanding the provisions of Section 19
below, Lessee may freely assign its option to purchase to any
third party.
Section 5. Rental. Lessee shall pay to Owner (or as
otherwise directed in writing by Owner as to place and manner of
payment) the Base Rental and Additional Rental in the amounts, at
the times and in the manner set forth below, such amounts
constituting in the aggregate the total of the rental payable
under this Lease, as follows:
(a) Lessee hereby agrees to pay Base Rental semiannually in
arrears on the first day of each January and July during the
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Basic Lease Term and each Extension Lease Term in an amount equal
to the applicable Rental Factor (as shown on Exhibit B hereto, as
such Exhibit may be revised by Owner from time to time in
accordance with Section 5(c) hereof) multiplied by the Project
Costs. During and after the Interim Lease Term but prior to the
Basic Term Commencement Date, Interim Rental shall be capitalized
and added to Project Costs in an amount equal to the sum of (x)
for each day during the Interim Lease Term on and after which the
Owner's Equity has been contributed, an amount equal to a
fraction, the numerator of which is the then Interim Rental Rate
and the denominator of which is 360, multiplied by the Owner s
Equity, plus (y) all interest accruing during the Construction
Period on advances made on the Construction Loan to the extent
that such interest has not been funded by a further advance under
the Construction Loan.
(b) In addition to the Base Rental, Lessee agrees during the
Term to pay as Additional Rental to the Owner or the Person
entitled to receive the same all of the following:
(i) All "taxes and other impositions" (as defined in
Section 8(a) hereof);
(ii) Insurance premiums, if any, on all insurance
required to be obtained and maintained in force and effect by
Lessee under the provisions of Section 15 of this Lease;
(iii) All other costs and expenses of every nature
whatsoever incurred by Lessee incident to the ownership,
management, maintenance, repair, replacement, restoration, and
operation of the Leased Property;
(iv) All indemnities, fees and expenses (not
otherwise paid or provided for out of the proceeds of the Loan or
the Owner's Equity) incurred by Owner or which the Owner is
obligated to pay in connection with the transactions contemplated
in this Lease or the Loan;
(v) All amounts, liabilities and obligations which
Lessee assumes or agrees to pay hereunder to Owner or others,
including, if any, payments of Termination Value, indemnities,
and any Reinvestment Premium that may become payable by Lessee
hereunder, in addition to any other amounts due as Base Rental
and Additional Rental hereunder; and
(vi) In the event Lessee shall fail to pay Base
Rental or Additional Rental or any other payment (including,
without limitation, the Maximum Lessee Risk Amount, Termination
Value or Purchase Price) owing in respect hereof in accordance
with the terms of this Lease on the date fixed for such payment
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or upon the occurrence of an Event of Default, an additional
amount calculated daily from and after the date fixed for payment
until paid or upon the occurrence of the Event of Default and
during the continuance thereof, as the case may be, equal to the
product of (A) a fraction, the numerator of which is the then
effective Default Rate applicable under the Loan and the
denominator of which is 360 multiplied by (B) the Termination
Value (or, if the Basic Term Commencement Date has not occurred,
100% of all Project Costs plus the amount described in clause
(iii) of Section 4(b) above). Amounts constituting Additional
Rental under this clause (vi) shall be payable by Lessee
immediately upon demand, or if no demand is made, upon the first
day of each month.
Amounts constituting Additional Rental payable pursuant
to clauses (i), (ii), (iii) and (iv) of this Section 5(b) shall
be paid by Lessee directly to the person or persons to whom such
amounts are payable. The obligation of Lessee to pay all such
amounts shall survive the termination of this Lease.
(c) The Owner shall determine and compute the amount of
Interim Rental accrued during and after the Interim Lease Term
but prior to the Basic Term Commencement Date and add such amount
to the other Project Costs and, upon such determination by Owner,
Owner will provide the Lessee with a written statement of the
total Project Costs. Exhibit F sets forth the Maximum Lessee Risk
Amount and Maximum Owner Risk Amount applicable prior to the
Basic Term Commencement Date. The Rental Factor, Termination
Value, Purchase Price, Maximum Lessee Risk Amount and Maximum
Owner Risk Amount shall be determined by the Owner prior to the
Conversion Date and will be effective as of the Basic Term
Commencement Date for the Maximum Term. Said amounts will be
determined by Owner to reflect the actual interest rates
established for the Long-Term Loan and Investor Loan for all
periods after the Basic Term Commencement Date. On the Basic
Term Commencement Date, the Owner shall prepare and deliver to
Lessee exhibits to this Lease which sets forth the actual Rental
Factor (Exhibit B), Termination Value Exhibit D), Purchase Price
(Exhibit E), Maximum Lessee Risk Amount (Exhibit F) and Maximum
Owner Risk Amount (Exhibit F) after such adjustment. All such
amounts will be determined to provide that the Purchase Price
shall amortize to seventy-five percent (75%) of Project Costs at
the expiration of the Maximum Term. The determination of Project
Costs and of the Rental Factor, the Termination Value, Purchase
Price, Maximum Lessee Risk Amount and Maximum Owner Risk Amount
by Owner shall, in the absence of manifest error, be deemed
conclusive.
(d) All payments of Base Rental and Additional Rental
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required to be made by Lessee to Owner shall be made in good
funds. While any of the Construction Loan, Long-Term Loan or
Investor Loan remains outstanding, all payments hereunder
assigned to Lender, whether Base Rental, Additional Rental or
otherwise, shall be paid in such manner as shall be designated by
such Lender. If neither the Construction Loan, the Long-Term
Loan nor the Investor Loan are outstanding, all payments
hereunder shall be paid in such manner as designated by Owner or
any other Assignee.
Section 6. Use. Lessee may use the Leased Property,
including related amenities such as a parking garage, for office
purposes, distribution, warehousing, light manufacturing,
research and development (or any one or more of such uses) or for
any other lawful uses as may be permitted by Owner and which are
consistent with all covenants and restrictions of Permitted
Liens.
Section 7. Net Lease; Nonterminability
(a) This Lease is a "net lease." All costs, expenses and
obligations of every kind and nature whatsoever relating to the
Leased Property and the appurtenances thereto and the use and
occupancy thereof by Lessee or anyone claiming by, through or
under Lessee which may arise or become due during or with respect
to the period constituting the Term hereof shall be paid by
Lessee, and Lessee shall indemnify the Indemnified Parties
against any of the foregoing as provided in Section 8 below.
Lessee assumes, during the Term of this Lease, the sole
responsibility for the condition, use, operation, maintenance,
subletting and management of the Leased Property, neither Owner
nor any other Indemnified Party shall have any responsibility in
respect thereof, nor shall Owner nor any other Indemnified Party
have any liability for damage incurred by any Person or for
damage to the property of Lessee or any sublessee of Lessee for
any reason whatsoever. Without limiting the generality of the
foregoing, during the Term of this Lease, Lessee shall perform
all of the obligations of the sublessor under any subleases
affecting all or any part of the Leased Property which Lessee may
hereinafter enter into as sublessor to the extent that Lessee's
failure to perform such obligations could result in the
occurrence of an Event of Default under this Lease.
(b) Lessee acknowledges and agrees that its obligations
hereunder, including, without limitation, its obligations to pay
Base Rental and Additional Rental, shall be unconditional and
irrevocable under any and all circumstances and shall not be
subject to cancellation, termination, modification or repudiation
by Lessee. This Lease shall not terminate, nor shall Lessee have
any right to terminate this Lease, and Lessee shall perform all
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obligations hereunder, including the payment of all Base Rental
and Additional Rental, without notice, demand, counterclaim, set-
off, deduction, defense or recoupment, and without abatement,
suspension, deferment, diminution or reduction for any reason,
including, without limitation, any past, present or future claims
which Lessee may have against the Owner, Construction Lender,
Long-Term Lender, LC Issuer, BFS or any other Person for any
reason whatsoever; any defect in the Leased Property or any
portion thereof, or in the title, condition, design,
construction, habitability or fitness for a particular use
thereof; any damage to or destruction or loss of all or part of
the Leased Property; any restriction, deprivation (including
eviction) or prevention of, or any interference with or
interruption of, any use or occupancy of the Leased Property
(whether due to any defect in or failure of Owner's title to the
Leased Property, any Owner Lien or otherwise); any condemnation,
requisition or other taking or sale of the use, occupancy or
title to the Leased Property; any action, omission or breach on
the part of the Owner under this Lease (including without
limitation, any breach of the Owner's representations and
warranties set forth in Section 12 hereof) or under any other
agreement between Owner and Lessee, or any other indebtedness or
liability, howsoever and whenever arising, of Owner, any Assignee
or Lessee to any other Person, or by reason of insolvency,
bankruptcy or similar proceedings by or against Owner, any
Assignee or Lessee; the inadequacy or inaccuracy of the
description of the Leased Property or the failure to demise and
let to Lessee the property intended to be leased hereby; Lessee's
acquisition of ownership of the Leased Property or any sale or
other disposition of the Leased Property; the impossibility or
illegality of performance by Owner or Lessee or both; the failure
of Owner to deliver possession of the Leased Property on the
Closing Date; any action of any court, administrative agency or
other governmental authority; or any other cause, whether similar
or dissimilar to the foregoing, any present or future law
notwithstanding; it being the intention of the parties hereto
that all Base Rental and Additional Rental payable by Lessee
hereunder shall continue to be payable in all events and in the
manner and at the times herein provided, without notice or
demand, unless the obligation to pay the same shall be terminated
pursuant to the express provisions of this Lease.
(c) Lessee will remain obligated under this Lease in
accordance with its terms, and will not take any action to
terminate, rescind or avoid this Lease for any reasons,
notwithstanding any bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding affecting Owner, or
any assignee of Owner, or any action with respect to this Lease
which may be taken by any receiver, trustee or liquidator, or any
assignee of Owner or by any court in any such proceeding. Lessee
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waives all rights at any time conferred by statute or otherwise
to quit, terminate or surrender this Lease or the Leased Property
(except as otherwise expressly provided in Sections 4(c), 16(c)
or 29 hereof), or to any abatement, reduction, deferment or set-
off of any Base Rental, Additional Rental or other sum payable by
Lessee hereunder, for damage, loss or expense suffered by Lessee
on account of any cause referred to in this Section 7 or
otherwise.
Section 8. Taxes and Other Charges; Laws and Agreements.
(a) Lessee agrees to pay, defend and indemnify and hold each
Indemnified Party harmless on an after-tax basis from any and all
Federal, state, local and foreign taxes, fees, withholdings,
levies, imposts, duties, assessments and charges of any kind and
nature whatsoever, including, without limitation, all amounts
payable hereunder as Additional Rental hereunder, together with
any penalties, fines or interest thereon (herein called "taxes or
other impositions") attributable to any given period prior to or
within the Indemnification Period, howsoever imposed, whether
levied or imposed upon or asserted against Owner, Trust Company,
Beneficiary, W. Jeffrey Kramer ("Kramer"), any Assignee, Lessee,
the Leased Property, or any portion thereof (including, without
limitation, taxes and assessments referred to in clause (i) of
Section 5(b) hereof) or any other Indemnified Party, by any
Federal, state or local government or taxing authority in the
United States, or by any taxing authority or governmental
subdivision of a foreign country, upon or with respect to (a) the
Leased Property or any portion thereof (including, without
limitation, all fixtures, equipment and personal property which
forms a part of the Leased Property), (b) the acquisition,
manufacture, construction, ordering, purchase, ownership,
delivery, leasing, subleasing, re-leasing, possession, use,
maintenance, registration, re-registration, titling, re-titling,
licensing, documentation, return, repossession, foreclosure,
condemnation, conveyance, assignment, sale or other application
or disposition of the Leased Property or any other portion
thereof, (c) the rentals, receipts or earnings arising from the
Leased Property or other portion thereof, or (d) this Lease, the
Base Rental or Additional Rental payable by Lessee hereunder or
any of the Transaction Documents, provided, however, that the
foregoing indemnity shall not apply to and nothing in this Lease
shall require the payment by the Lessee of (i) any taxes or
impositions based upon or measured solely by any Principal
Party's gross, net or taxable income, tax preferences or
dividends paid or taxes payable in the nature of capital gains,
excess profits, accumulated earnings or personal holding company
taxes of such Principal Party, unless any such tax is in lieu of
or in substitute for any other taxes of such Principal Party or
impositions upon or with respect to the Leased Property which, if
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such other taxes or impositions were in effect, would be payable
by Lessee hereunder; (ii) any franchise, estate, inheritance,
succession, capital stock tax, unless any such tax is in lieu of
or in substitute for any other taxes of such Principal Party or
impositions upon or with respect to the Leased Property which, if
such other taxes or impositions were in effect, would be payable
by Lessee hereunder; (iii) any taxes of the Trust Company or the
Beneficiary imposed on or measured by the administrative fees
earned by such Persons in connection with the transaction
contemplated herein; (iv) any taxes of an Indemnified Party
arising by reason of any voluntary transfer of the Lease or
Leased Property or part thereof other than (A) a transfer by
Owner pursuant to an exercise of remedies which are enforceable
after the occurrence of an Event of Default hereunder, (B) a
transfer constituting an Owner Conveyance hereunder; or (C) a
subsequent transfer by the Lender or any nominee, designee or
affiliate thereof if such entity purchases the Leased Property at
a foreclosure sale or accepts a deed-in-lieu of foreclosure to
the Leased Property, and (v) any taxes of an Indemnified Party
arising by reason of the voluntary transfer by the Beneficiary of
its interests held pursuant to the Trust Agreement. As used
herein, the term "Indemnification Period" means the period
commencing on the Closing Date and ending on the date that the
Owner or any Assignee sells, transfers or otherwise conveys such
Person's interest in and to the Leased Property to the Lessee or
a third person. "Principal Party" means any Indemnified Party
other than the Owner, the Beneficiary, the Trust Company or
Kramer. Lessee will promptly notify Owner of all reports or
returns required to be made with respect to any tax or other
imposition with respect to which Lessee is required to indemnity
hereunder, and will promptly provide each of them with all
information necessary for the making and timely filing of such
reports or returns by Owner. If Owner requests that any such
reports or returns be prepared and filed by Lessee, Lessee will
prepare and file the same if permitted by applicable law to file
the same, and if not so permitted, Lessee shall prepare such
report or returns for signature by Owner, and shall forward the
same, together with immediately available funds for payment of
any tax or other imposition due, to Owner, at least ten (10) days
in advance of the date such payment is due. Upon written
request, Lessee shall furnish Owner with copies of all paid
receipts or other appropriate evidence of payment for all taxes
or other impositions paid by Lessee pursuant to this Section 8.
All of the indemnities contained in this Section 8 shall continue
in full force and effect notwithstanding the expiration or
earlier termination of this Lease in whole or in part, including
the expiration or termination of the Term with respect to the
Leased Property, and are expressly made for the benefit of, and
shall be enforceable by, Owner and each Assignee.
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(b) Notwithstanding the provisions of paragraph (a) of this
Section 8 and the provisions of Section 9 and so long as no
Default or Event of Default shall have occurred and be
continuing, Lessee shall have the right to contest, by
appropriate legal proceedings, any tax, charge, levy, assessment,
lien or other encumbrance affecting the Leased Property, and to
postpone payment of or compliance with the same during the
pendency of such contest, provided that (i) the commencement and
continuation of such proceedings shall suspend the collection
thereof from, and suspend the enforcement thereof against, the
Person on whom such tax, charge, levy, assessment, lien or other
encumbrance is sought to be imposed and/or the Leased Property,
(ii) no part of the Leased Property nor any Base Rental or
Additional Rental or other sums payable by Lessee hereunder shall
be in danger of being sold, forfeited, attached or lost, (iii)
there shall not exist (x) any interference with the use and
occupancy of the Leased Property or any part thereof, or (y) any
interference with the payment of Base Rental or any Additional
Rental (other than the portion subject to the contest), (iv)
Lessee shall promptly prosecute such contest to a final
settlement or conclusion, or if Lessee deems it advisable to
abandon such contest, Lessee shall promptly pay or perform the
obligation which was the subject of such contest and (v) at no
time during the permitted contest shall there be a risk of the
imposition of criminal liability on Owner for failure to comply
therewith. If (i) any such contest shall involve an amount of
money or potential loss (including penalties and similar charges)
in excess of $250,000, and (ii) either the Lessee's Parent is not
then Investment Grade or a Default or an Event of Default shall
have occurred and be continuing, then Lessee shall either (A)
deposit with the Owner an amount equal to 125% of the tax,
charge, levy, assessment, lien or other encumbrance affecting the
Leased Property, or (B) post an equivalent bond for security
issued by a surety or other issuer reasonably acceptable to Owner
and containing such terms which are reasonably acceptable to
Owner. Lessee shall not postpone the payment of any such tax,
charge, levy, assessment, lien or other encumbrance for such
length of time as shall permit the Leased Property, or any lien
thereon created by such item being contested, to be sold or
foreclosed by federal, state, county or municipal authority for
the non-payment thereof. Lessee shall not postpone compliance
with any such law, rule, order, ordinance, regulation or other
governmental requirement if Owner will thereby be subject to
criminal prosecution, or if any municipal or other governmental
authority shall be in a position according to applicable law to
commence and carry out any action which would prevent compliance
with the same or to foreclose or sell any lien affecting all or
part of the Leased Property which shall have arisen by reason of
such postponement or failure of compliance. Owner agrees to
provide Lessee with a copy of any of its tax returns upon the
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written request of Lessee.
Section 9. Liens. Lessee represents and warrants that on
the Closing Date, fee simple title in the Leased Property will be
vested in Owner subject only to Permitted Liens. Subject to the
provisions of paragraph (b) of Section 8, Lessee will promptly,
but in any event no later than 60 days after Lessee acquires
actual knowledge of the filing thereof but in any event prior to
the enforcement of the same, at its own expense, remove and
discharge of record, by bond or otherwise, any charge, lien,
security interest or encumbrance upon the Leased Property, upon
any Base Rental, or upon any Additional Rental or other sums
payable by Lessee under this Lease which arises for any reason
(except for Owner Liens) including all liens which arise out of
Lessee's possession, use, construction, operation and occupancy
of the Leased Property, but not including any Permitted Liens.
Nothing contained in this Lease shall be construed as
constituting the consent or request of Owner, express or implied,
to or for the performance by any contractor, laborer,
materialman, or vendor of any labor or services or for the
furnishing of any materials for construction, alteration,
addition, repair or demolition of or to the Leased Property or
any part thereof. Notice is hereby given that Owner will not be
liable for any labor, services or materials furnished or to be
furnished to Lessee, or to anyone holding an interest in the
Leased Property or any part thereof by, through or under Lessee,
and that no mechanic's or other liens for any such labor,
services or materials shall attach to or affect the interest of
Owner in and to the Leased Property. In the event of the failure
of Lessee to discharge any charge, lien, security interest or
encumbrance within the time period set forth above and otherwise
as aforesaid, except during the pendency of any contest permitted
and conducted pursuant to paragraph (b) of Section 8, Owner may
(but shall not be required to) discharge such items by payment or
bond or both, and Lessee will repay to Owner, upon demand, any
and all amounts paid therefor, or by reason of any liability on
such bond, and also any and all reasonable incidental expenses,
including reasonable attorney's fees, incurred by Owner in
connection therewith.
Section 10. Ownership of the Leased Property.
(a) The Owner and the Lessee intend that (i) for financial
accounting purposes with respect to the Lessee, this Lease will
be treated as an "operating lease" pursuant to Statement of
Financial Accounting Standards No. 13, as amended, but (ii) for
federal and all state and local income tax purposes, (A) this
Lease will be treated as a financing arrangement, (B) the
Construction Lender and the Long-Term Lender will be deemed
lenders making loans for the benefit of the Lessee, which loans
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are secured by all of the Leased Property, and (C) the Lessee
will be treated as the owner of all of the Leased Property and
will be entitled to all tax benefits ordinarily available to an
owner of a property similar to the Leased Property for such tax
purposes. Owner and Beneficiary shall take no action
inconsistent with such intent for tax purposes, provided that
nothing in this Section 10(a) shall deemed to restrict the
Owner's right to exercise any remedies after the occurrence of an
Event of Default.
(b) This Lease is a lease intended as security. Lessee
hereby grants to Owner a security interest in all of the Lessee's
right, title and interest in and to the Leased Property
(including, without limitation, all site improvements, base
building, building systems, equipment and related fixtures now or
hereafter existing on the Land), together with any substitutions,
replacements and additions thereto, all of the Lessee's rights in
and to the Approved Construction Documents and all general
intangibles related to the Leased Property and all of Lessee's
rights, claims and damages arising from warranties (whether
express or implied) of architects, contractors and subcontractors
with respect to the development and construction of the
Improvements, and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities
or other property, whether in cash, investments, securities or
other property. The Owner and the Lessee shall, to the extent
consistent with this Lease, take such actions and execute,
deliver, file and record such other documents, financing
statements, mortgages and deeds of trust as may be necessary to
ensure that, if this Lease were deemed to create a security
interest in the Leased Property in accordance with this Section
10, such security interest would be deemed to be a perfected
security interest of first priority under applicable federal,
state and local law, subject only to Permitted Liens, and will be
maintained as such throughout the Term.
Section 11. Owner's Disclaimer; Acknowledgement by Lessee.
The Leased Property is demised and let in its present condition
without representation and warranty by Owner subject to (i)
Permitted Liens, (ii) the rights of parties in possession, (iii)
the state of title transferred to Owner on the Closing Date
pursuant to the P&S, (iv) any state of facts which an accurate
survey or physical inspection might show, (v) the existing
environmental condition of the Leased Premises, (vi) all
applicable laws, rules, regulations, ordinances and restrictions,
including, without limitation, all Environmental Legal
Requirements, now in effect or hereafter adopted by any
governmental authority having jurisdiction, and (vii) any
violation of such laws, rules, regulations, ordinances and
restrictions occurring on or before the Closing Date. Lessee has
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examined the Leased Property and the Owner's title and interest
thereto and has found as between Lessee and Owner (and each
Person claiming by, through or under Owner) the same to be
satisfactory for all purposes.
LESSEE REPRESENTS, WARRANTS AND ACKNOWLEDGES THAT THE
CONSTRUCTION OF THE IMPROVEMENTS ON THE LAND WILL BE WITHIN THE
EXCLUSIVE CONTROL OF, AND WILL BE THE SOLE RESPONSIBILITY OF,
LESSEE. OWNER HAS NOT MADE AN INSPECTION OF THE LEASED PROPERTY
AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LEASED PROPERTY OR ANY PORTION THEREOF OR THE
LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
HABITABILITY, ENVIRONMENTAL CONDITION, COMPLIANCE WITH
SPECIFICATIONS, CONDITION, OPERATION, ABSENCE FROM DEFECTS
(PATENT OR LATENT), DURABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE LEASED PROPERTY OR ANY PORTION THEREOF; AND ALL
RISKS INCIDENTAL TO THE LEASED PROPERTY SHALL BE BORNE BY THE
LESSEE AND THE OWNER SHALL HAVE NO RESPONSIBILITY WITH RESPECT
THERETO. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IN
THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE LEASED
PROPERTY OR ANY PORTION THEREOF, WHETHER PATENT OR LATENT,
WHETHER DISCOVERABLE BY LESSEE, OWNER SHALL NOT HAVE ANY
RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY
DIRECT OR INDIRECT DAMAGE TO PERSONS OR PROPERTY RESULTING
THEREFROM, OR FOR LESSEE'S LOSS OF USE OF THE LEASED PROPERTY, OR
ANY PORTION THEREOF, OR FOR ANY INTERRUPTION IN LESSEE'S
BUSINESS CAUSED BY LESSEE'S INABILITY TO USE THE LEASED PROPERTY,
OR ANY PORTION THEREOF, FOR ANY REASON WHATSOEVER. THE
PROVISIONS OF THIS SECTION 11 HAVE BEEN NEGOTIATED BY LESSEE AND
OWNER AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND DISCLAIMER
BY OWNER OF ANY AND ALL WARRANTIES BY OWNER WITH RESPECT TO THE
LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER EXPRESS OR
IMPLIED, AND WHETHER ARISING UNDER THE UNIFORM COMMERCIAL CODE,
ANY OTHER APPLICABLE LAW OR OTHERWISE. LESSEE REPRESENTS AND
WARRANTS TO OWNER THAT THE PROVISIONS OF THIS SECTION 11 ARE
ENFORCEABLE BY OWNER AGAINST LESSEE (AND THOSE CLAIMING BY,
THROUGH OR UNDER LESSEE) AND THAT OWNER SHALL NOT HAVE ANY
LIABILITY FOR ANY OF THE MATTERS SUBJECT TO THIS DISCLAIMER.
Section 12. Representations of Parties.
Lessee hereby represents and warrants to Owner that as
of the Closing Date and at all times during the Term as follows:
(a) Lessee is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
York, with full corporate power and authority to own its
properties and to conduct its business as currently conducted.
(b) Lessee is qualified to do business as a foreign
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corporation and is in good standing in the State of New Jersey.
(c) Lessee has the corporate power and authority to enter
into this Lease and the Transaction Documents to which it is a
party and to carry out and perform the obligations of Lessee
under the terms hereof and thereof.
(d) The execution, delivery and performance by Lessee of
this Lease and the Transaction Documents to which it is a party
have been duly authorized by all the necessary corporate action
of Lessee and do not (A) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Lessee, (B) result in a
breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to
which Lessee is a party or by which it or its properties are
bound, or (C) result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance. Lessee is not in violation of or
in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or reward or any such
indenture, agreement, lease or instrument described in this
paragraph.
(e) The Lease and the Transaction Documents to which Lessee
is a party have been duly executed and delivered by Lessee and
constitute the legal, valid and binding obligations of Lessee
enforceable against Lessee in accordance with their terms,
including, without limitation, the choice of laws provisions
therein.
(f) Neither the execution and delivery of this Lease, nor
the payment and performance by Lessee of all of its obligations
hereunder, require the consent or approval of, the giving of
notice to, or the registration, filing or recording with, or the
taking of any other action in respect of, any Federal, state,
local or foreign government or governmental authority or agency
or other Person other than the recording of a Memorandum of
Lease.
(g) All balance sheets, statements of profit and loss and
other financial data that have been delivered to Owner and Lender
with respect to Lessee's Parent (A) are complete and correct in
all material respects, (B) accurately present the financial
condition of Lessee's Parent on the dates for which, and the
results of its operations for the periods for which, the same
have been furnished, and (C) have been prepared in accordance
with generally accepted accounting principles consistently
applied throughout the periods covered thereby, and there has
been no material adverse change in the condition of Lessee or
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Lessee's Parent, financial or otherwise, since the date of the
most recent financial statements delivered to Owner with respect
to Lessee's Parent;
(h) Except as otherwise stated in Schedule I (the "Listed
Permits"), Lessee holds all licenses, certificates and permits
(including any applicable environmental permits) from
governmental authorities necessary to complete the Improvements
pursuant to the Construction Agency Agreement and/or required to
construct the Improvements as contemplated in the Approved
Construction Documents and prior to the Basic Term Commencement
Date, shall obtain all licenses, certificates and permits
(including applicable environmental permits) from governmental
authorities necessary to occupy and use the Leased Property for
its intended purposes. All such licenses, certificates and
permits will remain in full force and effect and be complied with
in all respects.
(i) No litigation or administrative proceedings of or before
any court, tribunal or governmental body is pending, or, to the
knowledge of Lessee, threatened against Lessee or any of its
properties or with respect to this Lease which, if adversely
determined, would have a material adverse effect on the business,
assets or financial condition of Lessee or upon its right to
enter into this Lease or the validity or effectiveness thereof.
(j) Lessee is not in default in the payment or performance
of any of its material obligations or in the performance of any
material contract, agreement or other instrument to which it is a
party or by which it or any of its assets may be bound and which
will continue to exist subsequent to the date hereof.
(k) The Leased Property is not subject to any mortgage,
lien, pledge, charge, encumbrance, security interest or title
retention or other security agreement or arrangement of any
nature whatsoever, except for Permitted Liens.
(l) Lessee has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection
with the transaction contemplated in this Lease or the other
Transaction Documents, except for the fee payable to Cushman and
Wakefield, which fee is listed on the Project Budget and shall be
paid promptly upon becoming due in accordance with the
Construction Agency Agreement.
Owner hereby represents and warrants to Lessee that as of
the Closing Date and at all times during the Term as follows:
(a) Trust Company is a national banking association duly
organized, validly existing and in good standing under the laws
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of the United States of America with full corporate power and
authority to own its properties and to conduct the business
contemplated under the Transaction Documents.
(b) Trust Company is either qualified to do business and is
in good standing in the State of New Jersey or because of the
nature of its activities, Owner is not required to be qualified
to do business in the State of New Jersey.
(c) Owner has the power and authority under its Trust
Agreement to enter into this Lease and the Transaction Documents
to which it is a party and to carry out and perform the
obligations of Owner under the terms hereof and thereof.
(d) The execution, delivery and performance by Owner of this
Lease and the Transaction Documents to which it is a party have
been duly authorized and do not (A) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Owner, (B) result in a
breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to
which Owner is a party or by which it or its properties are
bound, or (C) result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance. Owner is not in violation of or
in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or reward or any
such indenture, agreement, lease or instrument described in this
paragraph.
(e) The Lease and the Transaction Documents to which Owner
is a party have been duly executed and delivered by Owner and
constitute the legal, valid and binding obligations of Owner
enforceable against Owner in accordance with their terms,
including, without limitation, the choice of laws provisions
therein.
(f) Neither the execution and delivery of this Lease, nor
the performance by Owner of all of its obligations hereunder,
requires the consent or approval of, the giving of notice to, or
the registration, filing or recording with, or the taking of any
other action in respect of, any Federal, state, local or foreign
government or governmental authority or agency or other Person
other than the recording of a Memorandum of Lease.
(g) No litigation or administrative proceedings of or before
any court, tribunal or governmental body is pending, or, to the
knowledge of Owner, threatened against Owner or any of its
properties or with respect to this Lease which, if adversely
determined, would have a material adverse effect on the business,
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assets or financial condition of Owner or upon its right to enter
into this Lease or the validly or effectiveness thereof.
(h) Owner has not contracted with a broker or a finder
relating to or in connection with the transactions contemplated
in this Lease or the other Transaction Documents.
(i) Owner will not, during the entire term of this Lease,
engage in any business other than the business of owning the
Leased Property and will not incur any debts other than the debts
contemplated in the Transaction Documents and debts incurred to
satisfy and discharge such debts.
Section 13. Maintenance; Quiet Enjoyment.
(a) In addition to the other covenants contained in this
Lease, Lessee hereby further covenants and agrees that during the
Term of this Lease:
(i) Lessee acknowledges that on and as of the Basic Term
Commencement Date, all Improvements will be in new condition,
repair and appearance, subject only to the completion of the
"punchlist items" set forth in writing on such date and
referenced in Section 10.15 of the Construction Agency Agreement.
Lessee shall, at its cost and expense, keep and maintain the
Improvements, including any altered, rebuilt, additional or
substituted buildings, structured and other improvements thereto,
in the same condition as on the Basic Term Commencement Date (or
with respect to any "punchlist items" acquired or constructed
subsequent thereto, in the same condition as on the date that
such "punchlist items" have been Substantially Completed and the
provisions of Section 10.15 of the Construction Agency Agreement
in respect thereof have been satisfied), ordinary wear and tear
excepted, and on a basis consistent with the operation and
maintenance of first class office buildings, warehouse facilities
and/or light manufacturing facilities and other uses permitted
under Section 6 hereof, as the case may be, comparable in style
and location to the Leased Property and in no event less than the
standards applied by Lessee or its Affiliates in the operation of
other comparable properties owned or leased by Lessee or its
Affiliates. Lessee will make all structural and nonstructural,
and ordinary and extraordinary changes, repairs and replacements,
foreseen or unforeseen, which may be required, whether or not
caused by its act or omission, to be made upon or in connection
with the Improvements in order to keep the same in such
condition, including taking, or causing to be taken, action
necessary to maintain the Leased Property in compliance with the
provisions of any insurance policy with respect to the Leased
Property and any applicable Legal Requirements, including all
applicable Environmental Legal Requirements. Lessee shall
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provide or cause to be provided all security service, custodial
service, janitorial service and other services necessary for the
proper upkeep and maintenance of the Leased Property.
(ii) Lessee covenants to perform or observe all
terms, covenants or conditions of any Permitted Liens, easement
or maintenance agreements to which it may at any time be a party
or to which the Leased Property or any portion thereof is subject
at any time or any other like matters which now or hereafter
affect the Leased Property, the Owner, the Lease or any one of
the foregoing. Lessee shall, at its expense, use its reasonable
efforts, consistent with sound business practice, to enforce
compliance with any Permitted Liens, easement, or maintenance
agreements or similar agreements benefiting the Leased Property
or any portion thereof by any other Person subject to such
agreement, provided, however, that if a failure to comply with
any of the foregoing would adversely affect the utility, fair
market value or useful life of the Leased Property, the Lessee
shall enforce compliance with the same. Lessee expressly waives
the right to make repairs at the expense of the Owner pursuant to
any law at any time in effect that would impose any such
obligations on a lessor or give any such rights to a lessor.
Lessee shall not abandon the Leased Property or any portion
thereof or commit waste thereon.
(iii) If any Improvements situated on the Leased
Property at any time during the Term of this Lease shall encroach
upon any property, street or right-of-way adjoining or adjacent
to the Leased Property, or shall violate the agreements or
conditions contained in any restrictive covenant affecting the
Leased Property or any part thereof, or shall impair the rights
of others under or obstruct any easement or right-of-way to which
the Leased Property is subject, then, promptly after the written
request of Owner or any Person affected by any such encroachment,
violation, impairment or obstruction, Lessee shall, at its
expense, either (A) obtain effective waivers or settlements of
all claims, liabilities and damages resulting from each such
encroachment, violation, impairment or obstruction whether the
same shall affect Owner, Lessee, the Construction Lender, the
Long-Term Lender or the LC Issuer or any one or more of the
foregoing, or (B) make such changes in the Improvements on the
Leased Property and take such other action as shall be necessary
to remove such encroachments or obstructions and to end such
violations or impairments, including, if necessary, the
alteration or removal of any Improvement on the Leased Property.
Any such alteration or removal shall be made in conformity with
the requirements of Section 17 to the same extent as if such
alteration or removal were an alteration under Section 17 of this
Lease and there shall be no abatement of Basic Rental or
Additional Rental by reason of such alteration or removal.
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(iv) Owner shall have no obligation to incur any
expense of any kind or character in connection with the
management, operation or maintenance of the Leased Property
during the Term of this Lease. Owner shall not be required at
any time to make any improvements, alterations, changes,
additions, repairs or replacements of any nature whatsoever in or
to the Leased Property. Lessee shall use and operate the Leased
Property or cause it to be used and operated only by personnel
authorized by Lessee, and Lessee shall use reasonable precautions
to prevent loss or damage to the Leased Property from fire and
other hazards.
(v) Lessee shall pay all charges for utility,
communication and other services on or about the Leased Property,
whether or not payment therefor shall become due after the Term
of this Lease.
(vi) Other than the provisions of Section 13(b)
hereof, Lessee shall perform all covenants and agreements (except
for those covenants and agreements which are by their express
terms capable of being, or specifically required to be, performed
by Owner acting alone) which it and/or Owner agree to perform
under the Construction Loan Documents, the Long-Term Loan
Documents, the Construction Agency Agreement and the other
Transaction Documents.
(b) Owner hereby covenants and agrees that during the Term
of this Lease it shall not take any affirmative action which will
interfere with the quiet use and enjoyment of the Leased Property
by Lessee, that it will not fail to take any affirmative action
required to prevent interference with the quiet use and enjoyment
of the Leased Property as contemplated under this Lease by
Lessee, unless such interference arises out of a Default or Event
of Default by Lessee and that each lender whose debt is secured
by a lien on the Leased Property shall enter into an agreement
with Lessee to such effect that such lender shall not disturb
Lessee's occupancy of the Leased Property and shall respect all
Lessee's right under this Lease, including Lessee's right to
purchase as provided in Section 4(c) above and in Section 29
below, so long as no Event of Default shall have occurred under
this Lease and provided that Lessee shall have entered into an
agreement, satisfactory in all respects to Lessee, subordinating
its interest in the Leased Property to the lien of such lender
and agreeing to attorn to such lender in the event of
foreclosure. Owner further covenants and agrees that, so long as
no Default or Event of Default shall have occurred and be
continuing and provided that Lessee shall bear all associated
costs, it shall take all reasonably necessary actions as owner of
the Leased Property (i) to permit Lessee or its nominee to
exercise Owner's voting rights as a member of the Campus
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Conservation and Management Association, Inc., a New Jersey not-
for-profit corporation (the "Association") and serve as Owner's
representative on the Association's Design Review Committee,
provided that such exercise and representation shall be
consistent with and permitted by the By-Laws and Articles of
Incorporation of the Association; and (ii) to grant and/or to
convey such necessary utility easements or rights of passage over
the Leased Property as may be necessary to enable the Lessee to
operate the Leased Property for the uses permitted under Section
6 hereof.
Section 14. Compliance with Legal Requirements. Lessee
shall at all times, at Lessee's own cost and expense, perform and
comply with all laws, rules, orders, ordinances, regulations and
requirements now or hereafter enacted or promulgated, of every
government and municipality having jurisdiction over the Leased
Property and of any agency thereof, relating to the Leased
Property, or the improvement thereon, or the facilities or
equipment thereon or therein, or the streets, sidewalks, vaults,
vault spaces, curbs and gutters adjoining the Leased Property, or
the appurtenances to the Leased Property, or the franchise and
privileges connected therewith (collectively, "Legal
Requirements"), whether or not such Legal Requirements so
involved shall necessitate structural changes, improvements,
interference with use and enjoyment of the Leased Property,
replacements or repairs, extraordinary as well as ordinary, and
Lessee shall so perform and comply, whether or not such Legal
Requirements shall now exist or shall hereafter be enacted or
promulgated, and whether or not such Legal Requirements can be
said to be within the present contemplation of the parties
hereto. Lessee shall, at its expense, comply with all provisions
of insurance policies required pursuant to Section 15 hereof, and
with the provisions of all Permitted Liens and all contracts,
agreements, instruments and restrictions existing at the
commencement of this Lease or thereafter suffered or permitted by
Lessee, affecting the Leased Property or any part thereof or the
ownership, occupancy, use, operation or possession thereof.
Lessee shall at all times comply with the terms of and perform
its obligations under any assignment to Lender of this Lease and
any consent of Lessee to such assignment.
Notwithstanding the foregoing provisions of this Section 14
and so long as no Default or Event of Default shall have occurred
and be continuing, Lessee shall have the right to contest by
appropriate legal proceedings, any order or other direction
issued by any federal, state or local governmental agency which
order or direction affects the Lessee or the Leased Property, and
to postpone compliance with the same during the pendency of such
contest, provided that (i) the commencement and continuation of
such proceedings shall suspend the enforcement of such order or
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direction, (ii) no part of the Leased Property nor any Base
Rental or Additional Rental or other sums payable by Lessee
hereunder shall be in danger of being sold, forfeited, attached
or lost, (iii) there shall not exist (x) any interference with
the use or occupancy of the Leased Property or any part thereof,
or (y) any interference with the payment of Base Rental or
Additional Rental (iv) Lessee shall promptly prosecute such
contest to a final settlement or conclusion, or if Lessee deems
it advisable to abandon such contest, Lessee shall promptly pay
or perform the obligation which was the subject to such contest,
and (v) at no time during the permitted contest shall there be a
risk of the imposition of criminal liability on Owner for failure
to comply therewith. If (i) any such contest shall involve an
amount of money, or potential loss (including penalties and
similar charges) in excess of $100,000, and (ii) either Lessee's
Parent is not then Investment Grade or a Default or an Event of
Default shall have occurred and be continuing, then Lessee shall
either (A) deposit with the Owner an amount equal to 125% of the
amount of money or potential loss involved in such contest or (B)
post an equivalent bond for security issued by a surety or other
issuer reasonably acceptable to Owner and containing such terms
which are reasonably acceptable to Owner. In no event shall
Lessee postpone the payment or performance of the order or
direction for such length of time as shall permit the Leased
Property, or any lien thereon created by such order or direction
being contested, to be sold or foreclosed by any federal, state,
county or municipal authority for the nonpayment or
nonperformance thereof. Lessee shall not postpone compliance
with any such order or direction if Owner will thereby be subject
to criminal prosecution, or if any governmental authority shall
be in a position according to applicable law to commence or carry
out any action which would then prohibit compliance with same or
to foreclose or sell any lien affecting all or a part of the
Leased Property which shall have arisen by reason of such
postponement or failure of compliance.
Section 15. Insurance. Lessee shall during the Term of
this Lease obtain and maintain or cause to be obtained and
maintained at all times the following insurance:
(1) A policy or policies of insurance against loss or
damage to the Leased Property and all replacement and
additions thereto known as "all risk" without exception
(other than those approved by Owner in writing). During the
Construction Period, the Lessee shall maintain builder's
risk insurance in "completed value non-reporting form" (and
which shall include all insurance required to be carried by
Lessee, as "owner," under the provisions of the construction
contracts let by Lessee). Such insurance shall insure the
Improvements, including all materials in storage and while
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in transit during the Construction Period, against loss or
damage by fire or other casualty, with extended coverage and
with coverage for such other hazards (including "collapse,"
"explosion," "underground hazards," "vandalism and malicious
mischief," and coverage in so-called "all-risk" form) as
either the Owner or the Lender may from time to time
require. All such insurance shall contain a replacement
cost endorsement (which shall evidence coverage of 100% of
full replacement cost, with only those deductibles approved
by Owner, Lender and LC Issuer) and, if required by either
Owner or Lender, an agreed amount endorsement.
(2) If any portions of the Leased Property is located in
an area designated by the Secretary of Housing and Urban
Development as having special flood hazards, flood insurance
in the maximum available amount.
(3) Comprehensive public liability insurance, naming
Owner, Beneficiary, Kramer and Trust Company, each as
insured and Lender and LC Issuer, each as additional
insured, against legal liability for claims for death,
personal injury, bodily injury, or property damage occurring
on, in or about the Leased Property and the adjoining land,
streets, sidewalks or ways or occurring as a result of
construction and use of the Improvements on the Land or as a
result of any activities taking place on the Leased Property
after construction, with liability insurance limits of not
less than $20,000,000 combined single limit for personal
injury and property damage.
(4) Boiler and machinery insurance commencing at such
time as fixtures and equipment are connected and ready for
use.
(5) Workers' compensation insurance issued by a
responsible carrier authorized under the laws of the State
of New Jersey to insure employers against liability for
compensation or in lieu thereof, such workers' compensation
insurance to cover all persons employed by Lessee in
connection with the Leased Property and to cover full
liability for compensation under any such act aforesaid.
(6) Business interruption insurance to cover loss
resulting from delay of the completion of the Improvements.
After the Basic Term Commencement Date, such insurance shall
cover loss of use, total or partial, of any part of the
Leased Property in an amount sufficient at all times to pay
the total Base Rental and Additional Rental payable under
this Lease with respect to the Leased Property for a period
adequate to cover the period of loss of use of any part of
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the Leased Property. Such policy shall provide that the
amount payable thereunder shall not be less than an amount
equal to one (1) year's Base Rental and Additional Rental.
(7) Professional liability insurance covering all
architects and engineers involved in the design and/or
construction of the Improvements.
(8) Such other insurance coverages in such amounts as
the Owner may reasonably request consistent with the
customary practices of prudent developers and owners of
similar properties or which Owner is required to maintain
under either the Construction Loan or Long-Term Loan.
The originals or duplicate originals of such policies
required shall be deposited with the Owner by Lessee on the
Closing Date and thereafter, no less frequently than annually and
in no event later than thirty (30) days prior to the commencement
of the Basic Lease Term and each Extension Lease Term. With
respect to the policies described under subparagraphs (1), (2),
(4) and, if applicable, (8), the Lessee also shall deliver
originals or duplicate originals evidencing the coverage required
under said subparagraphs to Lender; with respect to all other
insurance, the Lessee shall deliver insurance certificates naming
Lender as the certificateholder, the form and substance of such
certificates to be satisfactory to Lender and shall be issued by
the insurer or a duly authorized agent of the insurer and shall
be accompanied by evidence of the full payment of premiums.
All policies of property insurance provided for therein
shall name the Owner and Trust Company as insured, and all
liability policies (other than the policies discussed under
paragraph (7) above) shall name the Owner, Trust Company, Lender
and LC Issuer as additional insured, as its interests may appear
and the policies required under paragraphs (1), (2), (4) and (6)
above shall identify the Owner as the owner of the Leased
Property. The Lessee shall be required to deliver copies of
insurance certificates evidencing the insurance coverage required
under paragraph (7) received from its architects and engineers in
the form required under the Lessee's agreements with such
parties. In addition, all insurance required under this Lease
shall be with companies and in form, amounts and with coverage
and deductibles satisfactory to the Lender, and containing a
standard mortgagee clause form endorsement naming the Lender as
loss payee and mortgagee. All insurance carriers shall have a
Best Insurance Guide rating of "A-XI" or better (or an equivalent
rating from another publication of a similar nature as shall be
in current use and approved by the Owner and the Lender) and
shall be qualified to do business in the State of New Jersey.
All policies required under this Section 15 shall provide that
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(i) the insurance evidence thereby shall not be cancelled or
modified without at least thirty (30) days' prior written notice
from the insurance carrier to the Owner and the Lender, (ii) no
act or omission on the part of the Lessee shall invalidate the
coverage as to the Owner, Trust Company and LC Issuer and no act
or omission on the part of the Owner or the Lessee shall
invalidate the coverage as to the Lender and (iii) no claims
shall be paid thereunder without ten (10) days' advance written
notice to the Owner and the Lender. Furthermore, the Lessee
shall be required to deliver renewal policies of all insurance
required under this Section 15, together with written evidence of
full payment of the annual premiums therefor, at least thirty
(30) days prior to the expiration of the existing insurance
period. All insurance policies and endorsements shall be fully
prepaid and nonassessable. The Lessee shall not obtain any
separate or additional insurance which is contributing in the
event of loss unless the Owner, Trust Company, LC Issuer and
Lender are each insured thereunder (as their interests may
appear) and the policies therefor are satisfactory to the Owner
and the Lender.
Section 16. Loss, Damage or Destruction.
(a) Risk of Loss, Damage or Destruction. Lessee hereby
assumes all risk of loss, damage, theft, Taking, destruction,
confiscation, requisition or commandeering, partial or complete,
of or to the Leased Property, however caused or occasioned, such
risk to be borne by Lessee with respect to the Leased Property
from and after the Closing Date. Lessee agrees that no
occurrence specified in the preceding sentence shall impair, in
whole or in part, any obligation of Lessee under this Lease,
including, without limitation, the obligation to pay Base Rental
and Additional Rental.
(b) Lessee hereby assigns to Owner any award, compensation,
insurance proceeds or other payment to which Lessee may become
entitled by reason of its interest in the Leased Property, (i) if
the Leased Property, or any portion thereof, is damaged or
destroyed by fire or other hazard or casualty or cause (a
"Casualty"), or (ii) by reason of any condemnation, requisition
or other taking or sale of the use, occupancy or title to the
Leased Property or any portion thereof in, by or on account of
any actual or threatened Taking. So long as no Event of Default
has occurred and is continuing, Lessee shall, at its cost and
expense, in the name and on behalf of Owner, Lessee, Lender, LC
Issuer or otherwise, appear in any such proceeding or other
action, to negotiate, accept and prosecute any claim for any
award, compensation, insurance proceeds or other payment on
account of any such loss, damage or destruction, condemnation,
requisition or other taking or sale and to cause any such award,
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compensation, insurance proceeds or other payment to be paid to
Owner. Lessee shall use its commercially reasonable efforts to
achieve the maximum award or other recovery obtainable under the
circumstances. Any negotiated awards, settlement or recoveries
shall be subject to Owner's prior approval. Owner may appear in
any such proceeding or other action, in a manner consistent with
the foregoing and the costs and expenses of any such appearance
shall be borne by Lessee and payable to Owner as Additional Rent.
If an Event of Default has occurred and is continuing, the Owner
shall have the right to negotiate, adjust and settle such awards,
settlements and recoveries without the approval of Lessee.
Unless either the Lessee's Parent is not then Investment Grade or
a Default or an Event of Default shall have occurred and be
continuing, the Lessee shall be entitled to receive all amounts
paid or payable for any Casualty or Taking of all or any portion
of the Leased Property, subject to the prior rights of Lender and
less any costs and expenses incurred by Owner or Lender in
connection with the negotiation, settlement or collection of such
amounts (the amounts received for any Casualty, less such costs
and expenses, shall be referred to as the "Net Casualty Award"
and the amounts received for any Taking, less such costs and
expenses, shall be referred to as the "Net Taking Award"),
otherwise the Owner shall be entitled to receive the Net Taking
Award or the Net Casualty Award. All such amounts shall be
applied either (x) to the payment of the Termination Value and
the other amounts due under Section 16(c) hereof, if such
Casualty or Taking results in, or the Lessee elects to deem such
Casualty or Taking as, an Event of Loss, or (y) to pay in
accordance with Section 16(d) hereof for the actual cost of
repair, restoration, rebuilding or replacement of the
Improvements by Lessee (collectively, "Cost To Repair") if such
Casualty or Taking does not result in, or the Lessee does not
elect to deem such Casualty or Taking as, an Event of Loss.
(c) If a Taking or Casualty to the Leased Property occurs,
Lessee shall give Owner immediate telephonic notice thereof
followed promptly by written notice, and describe in reasonable
detail in each case the circumstances of the Taking or Casualty
and the damage to or loss of the Leased Property. If the Taking
or Casualty constitutes an Event of Loss, Lessee shall pay to
Owner on the Rent Payment Date next following the date of such
Event of Loss (or, if prior to the Basic Term Commencement Date,
on the thirtieth (30th) day after the final determination that
the Taking or Casualty constitutes an Event of Loss or, if after
the Basic Term Commencement Date, on the last day of the Rental
Period in which such Event of Loss occurs if there is no
succeeding Rent Payment Date) the sum of (i) all unpaid Base
Rental due on or before such Rent Payment Date or such last day
of the Rental Period, plus (ii) the Termination Value as of the
Rent Payment Date next following the date of such Event of Loss,
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or if the Event of Loss occurs prior to the Basic Term
Commencement Date, an amount equal to one hundred percent (100%)
of all Project Costs (incurred through the date of payment) in
lieu of the Termination Value plus, to the extent such amounts
have not been included in Project Costs, all interest, costs,
fees, reimbursements and other amounts due and payable either to
Owner or Lender under the Transaction Documents, plus (iii)
Additional Rental due as of the date of payment of the amounts
specified in the foregoing clauses (i) and (ii), plus (iv) the
Reinvestment Premium. Any payments received at any time by Owner
or by Lessee constituting Net Casualty Award or Net Taking Award
from any insurer or other party (except Lessee) as a result of
the occurrence of such Event of Loss will be applied in reduction
of Lessee's obligation to pay the foregoing amounts, if not
already paid by Lessee, or, if already fully paid by Lessee, will
be applied to reimburse Lessee for its payment of such amount.
Upon payment in full of such Termination Value, Base Rental,
Additional Rental and Reinvestment Premium, (A) the obligation of
Lessee to pay Base Rental hereunder shall terminate and the Term
of this Lease shall thereupon terminate, and (B) the Owner shall
transfer to Lessee all of the Owner's interest in the Leased
Property in accordance with the provisions of Section 32 hereof.
As used in this Lease, the term "Termination Value" of the Leased
Property as of any Rent Payment Date means an amount determined
by multiplying the Project Costs by the percentage set forth
opposite such Rent Payment Date on the schedule of Termination
Values appearing in Exhibit D. An "Event of Loss" shall be
deemed to have occurred if either (a) with respect to a Casualty,
the Costs To Repair is equal to or greater than sixty-six and
two-thirds percent (66 2/3%) of the full replacement cost of the
Improvements; or (b) with respect to a Taking, the Taking renders
the Leased Property or any substantial portion thereof
permanently unfit for its intended use under the Lease. For
purposes of determining whether an Event of Loss has occurred, it
shall be assumed that the Leased Property or the affected portion
had been repaired or restored to the fullest extent reasonably
practicable. Either the Owner or the Lessee may declare that the
Taking or Casualty constitutes an Event of Loss, provided,
however, that the Lessee may deem such Taking or Casualty as an
"Event of Loss," regardless of the amount of the Costs To Repair,
with respect to a Casualty, and regardless of the effect of the
Taking on the utility of the Leased Property, with respect to a
Taking, and pay the Owner the Termination Value and the other
amounts required to be paid under this Section 16(c). Upon
making such determination, the party making such determination
shall notify the other party in writing thereof. If Owner
determines that such Taking or Casualty constitutes an Event of
Loss, it shall notify the Lessee thereof and the Lessee shall
have ten (10) days from the date the Owner delivers notice of its
determination to initiate a challenge in writing to such
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determination pursuant to the provisions of Section 16(f) below.
If no challenge in writing is made by the Lessee of an Owner's
determination of an Event of Loss, such determination shall be
binding upon Lessee. If Owner and Lessee determine that such
Taking or Casualty does not constitute an Event of Loss (or if
Owner's determination of an Event of Loss is not upheld after
arbitration pursuant to Section 16(f) hereof), Lessee shall be
required to repair, replace and restore the Leased Property as
provided in paragraph (d) below.
(d) If a Taking or Casualty to the Leased Property occurs
which does not result in (or is not otherwise deemed to
constitute) an Event of Loss and the Lessee elects to repair,
replace and restore the Leased Property, it shall, at its sole
cost and regardless of whether any amounts constituting a Net
Casualty Award or Net Taking Award are made available to Lessee
for such purpose, proceed with diligence and promptness to carry
out any demolition and to restore, repair, replace and/or rebuild
the Leased Property, as nearly as practicable, to a condition and
fair market value not less than the condition required to be
maintained and fair market value thereof immediately prior to
such Taking or Casualty. No repair or restoration work
undertaken by Lessee pursuant to this Section shall violate the
terms of any Permitted Lien or other restriction, easement,
condition or covenant or other matter affecting title to the
Leased Property, and shall be undertaken and completed in a good
and workmanlike manner and in compliance in all material respects
with all Legal Requirements then in effect with respect to the
Leased Property. If the Lessee elects to repair, replace and
restore the Leased Property, it agrees to submit for approval by
Owner all plans, specifications, cost estimates and contracts for
the restoration or repair of the loss or damage, provided,
however, the Owner shall not unreasonably withhold such approval
provided that the utility, fair market value and useful life of
the Leased Property after the restoration or repair is not less
than the utility, fair market value and useful life of the Leased
Property prior to the Taking or Casualty.
Unless otherwise agreed to by Owner, any Net Casualty Award
or Net Taking Award received by Owner will be released in partial
monthly disbursements equal to ninety percent (90%) of the value
of the work completed (or if the contract is on a cost-plus
basis, then monthly advances of ninety percent (90%) of the costs
of the work completed if less than the value of the work). The
release by Owner of Net Casualty Awards or Net Taking Awards
shall be subject to the satisfaction of the following conditions:
(i) no Default or Event of Default shall have occurred
and be continuing hereunder;
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(ii) Owner is in receipt of any architect's
certificates, contractor's sworn statements and other evidence of
costs, payments and completion as the Owner may require and
satisfactory evidence of payment and release of all Liens of
contractors, sub-contractors, and materialmen and of any other
Person providing work, service or materials in connection with
the repair, replacement and restoration of the Leased Premises;
(iii) Receipt by Owner of all approvals of any
municipal or other governmental authorities having jurisdiction
over the Leased Premises and all approvals required under any
Permitted Liens.
The final payment shall be released by Owner upon completion
of the restoration and repairs provided that the conditions set
forth above have been met in full. The Lessee agrees at the
Owner's request to provide the Owner with copies of any as-built
surveys and as-built plans and specifications of the Leased
Property after completion of the restoration and repair of the
Leased Property.
(e) The Lessee's obligation to pay Base Rental and
Additional Rental shall not abate by reason of a Taking or a
Casualty, and this Lease shall continue in full force and effect
and Lessee shall continue to perform and fulfill all obligations,
covenants and agreements hereunder notwithstanding such Taking or
Casualty.
(f) In the event the Lessee objects to the Owner's
determination that a Taking or a Casualty constitutes an Event of
Loss and notifies the Owner in writing of its objection, the
parties agree in good faith to attempt to resolve the dispute
through negotiation and agree to refer the matter to one or more
of their respective officers or employees who have the authority
to resolve the dispute. If no resolution is reached within ten
(10) days (or such longer period as the parties may mutually
determine), then Lessee and Owner shall submit to arbitration
before a single arbiter in Morristown, New Jersey, under the
Commercial Arbitration Rules of the American Arbitration
Association then in effect. The resulting decision of the
arbiter shall be deemed final from which no appeal or review may
be taken. All expenses and costs of such arbitration shall be
borne by the party not prevailing in the proceeding.
(g) If a Taking or Casualty occurs while the Construction
Loan is outstanding, then notwithstanding the provisions of this
Section 16 to the contrary, the rights of the parties hereto as
to the adjustment of claims, the retainage of the proceeds of a
Taking or Casualty, the use of such proceeds to repair or restore
the Leased Property or to pay the Construction Loan and any other
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matters pertaining to a Taking or Casualty shall be determined in
accordance with the provisions of Section 14 of the Construction
Loan Agreement. The exercise by Lender of any right by the
Construction Lender to accelerate the Construction Loan in
accordance with Section 14 of the Construction Loan Agreement
shall be conclusively deemed an "Event of Loss" hereunder which
requires the payment of the amounts set forth in Section 16(c)
above. If the Construction Lender applies any proceeds of a
Taking or a Casualty to pay-down the Construction Loan, the
amount of the Project Costs payable by Lessee shall be
appropriately reduced hereunder.
Section 17. Additions and Improvements; Removal. Prior to
the Basic Term Commencement Date, Lessee shall cause the
development and construction of the Improvements in accordance
with the Approved Construction Documents and subject to the terms
and conditions of this Lease, the Construction Agency Agreement
and the other Transaction Documents. Subject to the requirements
of law, Lessee shall have the right (from and after the Basic
Term Commencement Date) during the Term of this Lease to make any
additions or improvements to the Leased Property to attach
fixtures, structures or signs, and to affix any personal property
to the Leased Property, so long as (i) the utility, fair market
value and useful life of the Leased Property is not thereby
reduced, (ii) prior to the construction of any structural
improvement, Lessee shall deliver a certificate of an AIA
registered architect and a certificate of a registered engineer
to the effect that the planned structural improvement will comply
with all Legal Requirements, will not adversely affect or
interfere with the utility, operation or structural integrity of
the then existing Improvements and shall conform to the character
and quality of the existing Improvements, (iii) Lessee shall
finance such construction with its own funds or through a
borrowing unsecured by the Leased Property. Each such
improvement (and all fixtures and equipment included as a part
thereof) shall be deemed a part of the Leased Property and become
part of Owner's property. Lessee may remove, during or at the
expiration or other termination of the Term of this Lease, all
equipment and personal property placed or installed in or upon
the Leased Property after the Basic Term Commencement Date by
Lessee or under its authority, other than any equipment or
personal property included as a part of the Leased Property title
to which, prior to the exercise of Lessee's purchase option or a
third party sale, is held by the Owner, provided that Lessee
shall repair any damage to the Leased Property resulting from
such removal.
Section 18. Right Of Entry. Representatives of the Owner
shall have the right to enter upon the Leased Property (and to
review and copy Lessee's records regarding the Leased Property)
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during reasonable business hours (i) to inspect the same
(including, without limitation, the use of photographic and video
equipment) or (ii) for any purpose connected with the rights or
obligations of the parties under this Lease.
Section 19. Assignments and Subleasing.
(a) By Lessee. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
BELOW, LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
OWNER IN EACH INSTANCE, SUBLEASE OR OTHERWISE RELINQUISH
POSSESSION OF THE LEASED PROPERTY OR ANY PART THEREOF, OR ASSIGN,
TRANSFER, MORTGAGE OR ENCUMBER ITS RIGHTS, INTERESTS OR
OBLIGATIONS HEREUNDER AND ANY ATTEMPTED SUBLEASE, RELINQUISHMENT,
ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL AND
VOID. Furthermore, Lessee shall not be permitted to merge,
consolidate or sell a substantial portion of its assets (other
than inventory in the ordinary course of its business) without
Owner's prior written consent in each instance unless each of the
following conditions are met in full or waived in writing by
Owner (i) the surviving, resulting or acquiring entity expressly
assumes in writing all of Lessee's past, current and future
obligations and liabilities under this Lease, the form and
content of such documentation, including an opinion of counsel,
to be satisfactory to Owner in its sole and absolute discretion,
(ii) at the time of such merger, consolidation or sale, no Event
of Default shall have occurred and be continuing, (iii) all of
the representations of Lessee set forth in Section 12 hereof
shall be true and correct with respect to the surviving,
resulting or acquiring entity as if made directly by such entity
as of the date of the merger, consolidation or sale (except that
such entity may be a corporation organized under the laws of a
jurisdiction other than the State of New York and may be a
partnership, limited liability company or business trust provided
that such entity is duly qualified to transact business in the
State of New Jersey); and (iv) prior to the consummation of such
merger, consolidation or sale, the Owner has received a
certificate from one of the so-called "big six" firms of
independent certified public accountants (or any of their
successors) selected by Lessee and approved by the Owner to the
effect that the tangible net worth (as determined in accordance
with GAAP consistently applied) of such surviving, resulting or
acquiring entity shall be no less than the tangible net worth of
Lessee immediately prior to such merger, consolidation or sale;
notwithstanding the foregoing, Lessee may freely sublet all or
any portion of the Leased Premises at any time after the Basic
Lease Term Commencement Date, for all or any portion of the
remaining Term, and may assign this Lease or any of its rights
hereunder, provided however, (i) that Lessee remains primarily
liable hereunder (as a principal and not as a surety), (ii)
Lessee certifies in writing to Owner, in advance of such sublease
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or assignment, that such sublease or assignment does not
materially adversely affect the value of the Leased Property,
provided that such certification shall not be necessary in the
case of any sublease or assignment to any corporation,
partnership, limited liability company or business trust
controlling, controlled by or under common with Lessee by reason
of stock or equity ownership of greater than fifty percent (50%),
(iii) the proposed sublease provides that it terminates no later
than the day prior to the Termination Date, (iv) the sublease
expressly states that it is subject and subordinate to this
Lease, (v) the proposed sublease contains provisions regarding
use, lien lifting, maintenance, insurance, casualty and
condemnation, additions and improvements, right of entry,
environmental matters, repossession after default and further
assurances all in favor of the Lessee, as sublessor under the
proposed sublease, which are, in the reasonable determination of
the Owner, no less favorable to the Lessee, as sublessor, than
the corresponding provisions of this Lease are to the Owner, (vi)
if the Lessee's Parent is not Investment Grade at any time while
the proposed sublease is in effect, the Lessee will execute and
deliver any documents and instruments and take any actions
reasonably required by Owner to collaterally assign the Lessee's
interest in and rights under the sublease to the Owner and, if
required by the Lender, to the Lender, and (vii) Lessee notifies
the Owner in writing of the sublease and delivers an executed
copy thereof to Owner.
(b) By Owner. This Lease and all Base Rental and Additional
Rental (except for the Excepted Rights) due and to become due
hereunder is being contemporaneously assigned by Owner to Lender,
and Owner is contemporaneously herewith granting a mortgage and a
security interest in this Lease, the Base Rental and all
Additional Rental (except for the Excepted Rights) due and to
become due hereunder to Construction Lender under the Assignment
of Leases and Rents. On or prior to the Basic Term Commencement
Date, the Construction Lender shall assign such Assignment of
Leases and of Rents to the Long-Term Lender, or the Owner and
Long-Term Lender may enter into a separate collateral assignment
of this Lease, to secure the Long-Term Loan and any and all other
obligations of the Owner to the Long-Term Lender. Lessee and
Owner agree that the Base Rental, all Additional Rental (other
than the Excepted Rights) and any other amounts payable by Lessee
to Owner hereunder (except with respect to the Excepted Rights)
shall be paid directly to Lender (on behalf of Owner) or upon its
written order until the Loan shall have been paid in full. The
Lender may re-assign and/or grant a security interest in any of
such rights, obligations, title or interest assigned to such
Lender. Lessee agrees to execute the Assignment of Leases and
Rents and other documents that may be requested by Owner or the
Lender. Lessee acknowledges receipt of an executed counterpart
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of the Loan Documents and Investor Loan Documents. Any Person to
whom any sale, assignment, transfer or grant of security interest
is made by Owner is herein called an "Assignee"
Without limiting the foregoing or any of the provisions of
Section 7 hereof, Lessee further acknowledges and agrees that (i)
the rights of the Lender in and to the sums payable by Lessee
under any provision of this Lease shall not be subject to any
abatement whatsoever and shall not be subject to any defense,
set-off, counterclaim or recoupment whatsoever, whether by reason
of failure of or defect in Owner's title, or any interruption
from whatsoever cause in the use, operation or occupancy of the
Leased Property, or any damage to, loss, destruction, reduction
or impairment of the Leased Property for any reason whatsoever,
or by reason of any other indebtedness or liability, howsoever
and whenever arising, of Owner to Lessee or to any other Person
or for any cause whatsoever, it being the intent hereof that
Lessee shall be unconditionally and absolutely obligated to pay
directly to the Lender (on behalf of Owner) all of the Base
Rental and all Additional Rental (except the Excepted Rights
which remain payable directly to Owner) payable by Lessee
hereunder; (ii) Lessee's covenants, representations and
warranties in this Lease (including, without limitation, in
Section 12 hereof) shall be deemed to be made to and for the
benefit of, the Lender and the LC Issuer as well as Owner; and
(iii) the Lender shall be entitled to the benefit of all
covenants and obligations to be performed by Lessee under this
Lease, except Lessee's covenants and obligations relating to
Excepted Rights. Notwithstanding the assignment to the Lender,
Lessee and Owner acknowledge that all obligations of Owner to
Lessee under this Lease shall be and remain enforceable by Lessee
against, and only against, Owner. Notwithstanding the foregoing,
Owner agrees that Lessee's rights under this Lease shall not be
subordinate to the rights of any mortgagee or other lender taking
security in the Leased Property unless such mortgagee or lender
shall agree, with or for the benefit of Lessee, that it shall not
disturb Lessee's possession under the Lease and shall respect
Lessee's right to purchase the Leased Property under the terms of
this Lease, so long as no Event of Default shall have occurred
and be continuing under this Lease. If a mortgagee or lender who
has taken security in the Leased Property shall succeed to the
rights of the Owner under this Lease, whether through possession
or foreclosure action or delivery of a new lease or deed, then at
the request of such party so succeeding to Owner's rights
("Successor Owner"), the Lessee shall be deemed to have attorned
to and recognized such Successor Owner as the lessor under this
Lease, and shall promptly execute and deliver any instrument that
such Successor Owner may reasonably request to evidence such
attornment, provided, however, that the Lessee shall be entitled
to receive from such Successor Owner an agreement not to disturb
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Lessee's possession under this Lease (so long as no Event of
Default shall have occurred and be continuing) as a condition to
the execution and delivery of such attornment agreement. Upon
such attornment, this Lease shall continue in full force and
effect as if it were a direct lease between the Lessee and the
Successor Owner, and all of the terms, covenants and conditions
of this Lease shall remain applicable after such attornment.
Upon the payment in full of all indebtedness outstanding
under the Loan and the termination of the Lender's security
interest in the Leased Property in accordance with the provisions
of the Mortgage, the Owner may re-assign, sell or transfer and/or
grant a security interest in, this Lease, in whole or in part
and/or Leased Property to any Person, and upon notice of such
assignment, sale, transfer or grant, Lessee shall comply with the
requests and demands of such Person as if such Person was the
Lender as provided above provided that such Person shall agree,
with or for the benefit of Lessee, that it shall not disturb
Lessee's possession under the Lease and shall respect Lessee's
right to purchase the Leased Premises under the terms of this
Lease, so long as no Event of Default shall have occurred and be
continuing under this Lease
Section 20. Environmental Matters. Lessee hereby
represents and warrants to and covenants with Owner, Trust
Company, Beneficiary, Kramer, the Construction Lender, the Long-
Term Lender, LC Issuer, BFS, Trust Company, and their respective
Affiliates, successors, assigns, stockholders, partners,
directors, officers, trustees, employees, beneficiaries,
attorneys and accountants and any other Person claiming by
through or under Owner, its Beneficiary, the Construction Lender,
the Long-Term Lender, LC Issuer, BFS, Trust Company or any of
their assignees (collectively, "Indemnified Parties") as follows:
(a) Lessee covenants and agrees that (i) Lessee shall comply
and cause each permitted sublessee and assignee to comply with
all Environmental Legal Requirements, including, but not limited
to, Hazardous Materials Legal Requirements, applicable to the
Leased Property or as required by any governmental agency or
third party, and (b) Lessee shall take, and cause each permitted
sublessee and assignee to take, all remedial action necessary to
avoid any liability of Lessee, or any Indemnified Party for, and
to avoid the imposition of, or to discharge, any liens on the
Leased Property, as a result of, any failure to comply with
Environmental Legal Requirements with respect to the Leased
Property.
(b) Without limiting the generality of the foregoing, Lessee
agrees that it shall not:
(i) release any Hazardous Materials on or under the
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Leased Property or fail to take commercially reasonable
precautions to prevent the release or threat of release of any
Hazardous Materials on or under the Leased Property;
(ii) generate any Hazardous Materials on or under the
Leased Property or fail to take commercially reasonable
precautions to prevent the generation of Hazardous Materials on
or under, or the migration of Hazardous Materials to, the Leased
Property;
(iii) except in compliance with all Environmental
Legal Requirements, store or utilize, or permit any Hazardous
Materials to be stored or utilized on the Leased Property
provided, however, that the materials listed in Schedule II
attached may be used on or about the Lease Property and stored on
the Leased Property in the quantities listed in such Schedule
provided that all Environmental Legal Requirements are complied
with in connection with such use or storage;
(iv) dispose of or permit any Hazardous Materials to
be disposed of on the Leased Property except in compliance with
all Environmental Legal Requirements; and
(v) use, or allow the Leased Property to be used, in a
manner which does not comply with all Environmental Legal
Requirements.
(c) Lessee shall provide Owner with prompt written notice,
but in no event later than ten (10) Business Days after obtaining
any actual knowledge or actual notice thereof, of any of the
following conditions: (i) the presence, or any release or threat
of release, of any Hazardous Materials on, under or from the
Leased Property, whether or not caused by any of the Indemnified
Parties; (ii) any Environmental Enforcement Action instituted or
threatened in writing; or (iii) any condition or occurrence on
the Leased Property that constitutes a violation of any of the
Environmental Legal Requirements.
(d) Upon Lessee obtaining knowledge or notice of: (i) the
violation of any Environmental Legal Requirement related to the
Leased Property, or (ii) the presence, or any release or any
threat of release, of any Hazardous Materials on, under, or from
the Leased Property, which is lawfully claimed by any
governmental agency or third party to violate any other
Environmental Legal Requirement, or any combination thereof,
Lessee shall immediately take all reasonable actions to cure or
eliminate any such violation of any such Environmental Legal
Requirement and, where applicable, to arrange for the assessment,
monitoring, clean-up, containment, removal, remediation, or
restoration of the Leased Property as are required pursuant to
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any Hazardous Materials Legal Requirements or by any governmental
authority.
(e) Owner shall have the right (but not the obligation) to
require Lessee, at its own cost and expense, to obtain a
professional environmental assessment of the Leased Property in
accordance with Owner's requirements and sufficient in scope to
determine compliance with Hazardous Materials Legal Requirements
upon the occurrence of any one or more of the following events:
(i) an Event of Default hereunder; or (ii) upon receipt of any
notice of any of the conditions specified in Section 20(c) hereof
unless Lessee complies with the remedial actions required
pursuant to Section 20(d) or (iii) upon any return of the Leased
Property in accordance with Section 34(d) hereof.
(f) Owner may exercise its rights and remedies under all of
this paragraph (f) only upon and following the existence of one
or more of the following events or conditions: (i) an Event of
Default has occurred and is continuing; (ii) an Indemnified
Party, or an affiliate thereof, or any nominee or designee of an
Indemnified Party or an affiliate thereof has taken possession of
all or some portion of the Leased Property based upon an Event of
Default; (iii) an Indemnified Party, or an affiliate thereof or
any nominee or designee of an Indemnified Party or an affiliate
thereof, has commenced foreclosure proceedings or has acquired
title to all or some portion of the Leased Property by virtue of
foreclosure or deed in lieu of foreclosure; or (iv) a claim has
been asserted against an Indemnified Party for which
indemnification is provided herein, but Lessee has not undertaken
or is not continuing to pursue, after having undertaken,
commercially reasonable efforts to remediate, defend and
otherwise indemnify any such Indemnified Party. In any of such
events, the Owner shall have the right, but not the obligation,
through such representatives or independent contractors as it may
designate, to enter upon the Leased Property and to expend funds
to:
(A) cause one or more environmental assessments of
the Leased Property to be undertaken, if Owner in its sole
discretion determines that such assessment is appropriate.
Such environmental assessments shall be reasonable in scope
considering the history and use of the Leased Property and
the data available from prior reports, provided, however,
the foregoing shall not limit or restrict the reasonable
discretion of the Owner's engineers and consultants in
formulating the exact parameters of any such site assessment
and such site assessment may include, without limitation,
(i) detailed visual inspections of the Leased Property,
including without limitation all storage areas, storage
tanks, drains, drywells and leaching areas; (ii) the taking
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of soils and surface and sub-surface water samples; (iii)
the performance of soils and ground water analysis; and (iv)
the performance of such other investigations or analysis as
are necessary or appropriate and consistent with sound
professional environmental engineering practice in order for
Owner to obtain a complete assessment of the compliance of
the Leased Property and the use thereof with all
Environmental Legal Requirements and to make a determination
as to whether or not there is any risk of contamination (x)
to the Leased Property resulting from Hazardous Materials
originating on, under, or from any surrounding property or
(y) to any surrounding property resulting from Hazardous
Materials originating on, under, or from the Leased
Property;
(B) cure any breach of the representations, warranties,
covenants and conditions made by or imposed upon Lessee
under this Lease including without limitation any violation
by Lessee, or by the Leased Property, of any of the
Environmental Legal Requirements;
(C) take all actions as are necessary to (i) prevent the
migration of Hazardous Materials on, under, or from the
Leased Property to any other property; or (ii) prevent the
migration of any Hazardous Materials on, under, or from any
other property to the Leased Property;
(D) comply with, settle, or otherwise satisfy any
Environmental Enforcement Action as the same relates to the
Leased Property including, but not limited to, the payment
of any funds or penalties imposed by any governmental
authority and the payment of all amounts required to remove
any lien or threat of lien on or affecting the Leased
Property; and
(E) comply with, settle, or otherwise satisfy any
Environmental Legal Requirement and correct or abate in
accordance with all applicable Environmental Legal
Requirements any environmental condition on, or which
threatens, the Property and which could cause damage or
injury to the Property or to any person.
(g) Any amounts reasonably paid or advanced by Owner and all
reasonable costs and expenditures incurred in connection with any
action taken pursuant to the terms of this Section 20, including
but not limited to environmental consultants' and experts' fees
and expenses, attorneys' fees and expenses, court costs and all
costs of assessment, monitoring, clean-up, containment,
remediation, removal and restoration, with interest thereon at
the then effective rate applicable under Section 25 hereof shall
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be a demand obligation of Lessee to the Owner if not paid within
ten (10) days after notice, and, to the extent not prohibited by
law, and shall be deemed to be Additional Rental hereunder.
(h) The exercise by Owner of any one or more of the rights
and remedies set forth in this Section 20 shall not operate or be
deemed to place upon Owner any responsibility for the operation,
control, care, service, management, maintenance or repair of the
Leased Property.
(i) Without limiting the generality of the other provisions
of this Section 20, any partial exercise by Owner of any one or
more of the rights and remedies set forth in this Section 20
including, without limitation, any partial undertaking on the
part of Owner to cure any failure by any of Lessee, or of the
Leased Property, or any other occupant, prior occupant or prior
owner thereof, to comply with any of the Hazardous Materials
Legal Requirements shall not obligate the Owner to complete such
actions taken or require Owner to expend further sums to cure
such non-compliance.
Section 21. Environmental Indemnity. Lessee hereby agrees
that it shall at its sole cost and expense indemnify, defend,
exonerate, protect and save harmless each Indemnified Party on an
after-tax basis against and from any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or nature whatsoever, including, without
limitation, attorneys' and experts' fees and disbursements, which
may at any time be imposed upon, incurred by, or asserted or
awarded against Owner or an Indemnified Party and arising from or
out of any of the following, or any claims alleging any of the
following:
(a) Any Hazardous Materials on, in, under, or which emanated
from, all or any portion of the Leased Property, or which may
hereafter be on, in, under or emanate from, all or any portion of
the Leased Property whenever discovered;
(b) The violation of any Hazardous Materials Legal
Requirements by Lessee, or with respect to the Leased Property,
existing on or before the date hereof or which may so exist in
the future, whenever discovered;
(c) The violation of any Environmental Legal Requirement by
Lessee, or with respect to the Property, existing on or before
the date hereof or which may so exist in the future, whenever
discovered;
(d) Any material breach of warranty or representation made
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under or pursuant to Section 20 hereof;
(e) Any Environmental Enforcement Action with respect to the
Leased Property, whenever asserted; and
(f) The enforcement of this Section 21 or the assertion by
Lessee of any defense to the obligations of Lessee hereunder,
which is not sustained by a final order of a court of competent
jurisdiction which is not subject to further appeal, whether any
of such matters arise before, during or after the Term of this
Lease or the taking of possession of all or any portion of the
Leased Property by the Owner, and specifically including therein,
without limitation, the following which are incurred following an
Event of Default: (i) costs incurred for any of the matters set
forth in Section 20 of this Agreement; and (ii) costs and
expenses incurred in ascertaining the existence or extent of any
asserted violation of any Environmental Legal Requirements
relating to the Leased Property and any remedial action taken on
account thereof including, without limitation, the costs, fees
and expenses of engineers, geologists, chemists, other
scientists, attorneys, surveyors, and other professionals, or
testing and analyses performed in connection therewith.
(g) The obligations of Lessee under this Section 21 are not
subject to any limitation as to amount. Nothing herein shall
limit the right of an Indemnified Party to obtain injunctive
relief or to pursue equitable remedies under this Section 21.
The provisions of this Section 21, and the obligations of Lessee
under this Section 21, shall apply from the Closing Date
(notwithstanding the failure of Lessee to satisfy any condition
set forth in Section 4(a) hereof), and shall survive and continue
in full force and effect, notwithstanding the expiration or
earlier termination of this Lease in whole or in part, including
the expiration or termination of the Term, and are expressly made
for the benefit of, and shall be enforceable by, each Indemnified
Party, provided, however, that notwithstanding the foregoing, the
Lessee shall not have any indemnification obligations to the
Indemnified Parties for a violation of any Hazardous Materials
Legal Requirements or Environmental Legal Requirements or for any
Environmental Enforcement Actions attributable solely to any
facts or circumstances arising after possession of the Leased
Property has been returned to Owner, the Termination Date has
occurred and the Owner has relet or sold the Leased Property.
Section 22. Indemnification and Hold Harmless Agreement. To
the fullest extent not prohibited by applicable law, Lessee
hereby agrees to indemnify and hold harmless each Indemnified
Party, on an after-tax basis from and against any and all losses,
damages, injuries, costs or expenses (including reasonable
attorneys' fees and expenses) and from and against any and all
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suits, demands, claims, actions or other proceedings whatsoever,
brought by any entity or person whatsoever (except suits brought
by Lessee against an Indemnified Party in which Lessee is the
prevailing party) and arising or allegedly arising from (i) this
Lease or the Transaction Documents; (ii) any transaction
contemplated hereby or thereby; (iii) the acquisition, financing,
construction, installation, ownership, lease and operation of the
Leased Property (including patent or latent defects in the Land
or Improvements, whether or not discoverable by Lessee or any
Indemnified Party), including, without limitation, any suit,
demand, claim or action arising under the Loan Documents by
reason of Lessee being in default or failing to otherwise perform
thereunder, hereunder or under the Construction Agency Agreement
or under any other Transaction Document; (iv) the defense of any
suit, demand, claim, action or other proceeding brought against
such Indemnified Party in connection with the foregoing; (v) the
enforcement of any provision of this Lease; (vi) damage, injury
or death to any Person or damage to the property of any Person,
due to any defect in the Land or Improvements, or any act or
omission of any person including the defense of any suit, demand,
claim, action or other proceeding brought against such
Indemnified Party in connection with such damage or injury; (vii)
any claims based upon absolute or strict liability in tort or
claims based upon patent, trademark, tradename or copyright
infringement; and (viii) any action taken in good faith by such
Indemnified Party in connection with this Lease or the Leased
Property; except that, as to any Indemnified Party, the foregoing
indemnities shall not apply to the following:
(i) losses, damages, injuries, costs or expenses
solely and directly caused by the gross negligence or
willful misconduct of such Indemnified Party;
(ii) losses, damages, injuries, costs or
expenses solely and directly caused by the mishandling
or misapplication by any Indemnified Party of payments
made by the Lessee hereunder if such payments are made
to such Indemnified Party in accordance with the
Transaction Documents;
(iii) the inaccuracy in any material respect
of any representation or warranty made by such
Indemnified Party in any of the Transaction Documents;
(iv) the creation or existence of an Owner
Lien attributable to such Indemnified Party;
(v) if such Indemnified Party is the Owner,
Lender, or the Beneficiary, the voluntary disposition of
the Leased Property or the Lease, other than in
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connection with (A) a voluntary disposition permitted
after the occurrence of an Event of Default, (B) an
Owner Conveyance, (C) the voluntary assignment by the
Beneficiary of its ownership interest under the Trust
Agreement, or (D) a subsequent transfer by the Lender or
any nominee, designee or affiliate thereof if such
entity purchases the Leased Property at a foreclosure
sale or accepts a deed-in-lieu of foreclosure of the
Leased Property;
(vi) any other matters expressly excluded
from any other indemnity provisions contained in the
Transaction Documents pursuant to which the Lessee has
agreed to indemnify any Indemnified Party; and
(vii) acts or events that occur after the
Indemnification Period.
Lessee shall give each Indemnified Party prompt notice of
any occurrence, event or condition known to Lessee as a
consequence of which any Indemnified Party may be entitled to
indemnification hereunder. Lessee shall forthwith upon demand of
any such Indemnified Party reimburse such Indemnified Party for
amounts expended by it in connection with any of the foregoing or
pay such amounts directly. Lessee shall be subrogated to an
Indemnified Party's rights in any matter with respect to which
Lessee has actually reimbursed such Indemnified Party for amounts
expended by it or has actually paid such amounts directly
pursuant to this Section 22. In case any action, suit or
proceeding is brought against any Indemnified Party in connection
with any claim indemnified against hereunder, such Indemnified
Party will, promptly after receipt of notice of the commencement
of such action, suit or proceeding, notify Lessee thereof,
enclosing a copy of all papers served upon such Indemnified
Party, but failure to give such notice or to enclose such papers
shall not relieve Lessee from any liability hereunder. Lessee
may, and upon such Indemnified Party's request will, at Lessee's
expense, resist and defend such action, suit or proceeding, or
cause the same to be resisted or defended by counsel selected by
Lessee and reasonably satisfactory to such Indemnified Party and
in the event of any failure by Lessee to do so, Lessee shall pay
all costs and expenses (including, without limitation, attorney's
fees and expenses) incurred by such Indemnified Party in
connection with such action, suit or proceeding. The provisions
of this Section 22, and the obligations of Lessee under this
Section 22, shall apply from the Closing Date (notwithstanding
the failure of Lessee to satisfy any condition set forth in
Section 4(a) hereof), and shall survive and continue in full
force and effect, notwithstanding the expiration or earlier
termination of this Lease in whole or in part, including the
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expiration or termination of the Term, and are expressly made for
the benefit of, and shall be enforceable by, each Indemnified
Party. The foregoing obligation of Lessee to indemnify the
Indemnified Parties as aforesaid shall not operate as a
limitation or waiver of any rights that Lessee may have (whether
directly, by assignment, by subrogation or otherwise) against
either the LC Issuer or Owner arising by reason of the occurrence
of an Event of Default described in Section 23(i) hereof.
Section 23. Events of Default by Lessee. Any of the
following events shall constitute Events of Default under this
Lease:
(a) Lessee shall fail to make any payment of Base Rental
within ten (10) days after the same is due and payable or fails
to make any payment of Additional Rent when the same becomes due
and payable and such failure continues for thirty (30) days after
written notice thereof is given to Lessee; or
(b) Lessee shall fail to pay the Termination Value, Purchase
Price or End of Term Adjustment, as applicable, when the same
becomes due and payable; or
(c) Lessee shall fail to observe or perform any of its
covenants or agreements set forth in Sections 4(b), 4(c), 15,
16(c), 19, 29, 30, 31, 32 or 34 of this Lease or shall fail to
obtain any of the Listed Permits and such failure to obtain any
of the Listed Permits materially delays the commencement,
continuation or completion of the development or construction of
the Improvements; or
(d) Lessee shall fail to perform or observe any other
covenant, condition, or agreement to be performed or observed by
it under this Lease and such failure shall continue unremedied,
for thirty (30) days after written notice to Lessee specifying
such failure and demanding the same to be remedied, provided,
however, that no Event of Default shall be deemed to have
occurred with respect to breach of any covenant, condition or
agreement that cannot be remedied, with the exercise of
reasonable diligence on Lessee's part, within such thirty (30)
day period, if Lessee commences cure of such failure within such
thirty (30) day period and diligently pursues such cure to
completion, provided further, however, that the period given to
the Lessee to remedy such failure should not exceed a total of
ninety (90) days from the initial notice of default is given to
Lessee, provided further still, that if such failure relates to a
failure to comply with Environmental Legal Requirements, such
ninety (90) day period may be extended to such longer period as
may be reasonably necessary to remedy such failure; or
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(e) Lessee or Lessee's Parent shall be in default (i) under
any of the Construction Loan Documents, Long-Term Loan Documents,
Investor Loan Documents, the Construction Agency Agreement, any
other Transaction Document or any lease, loan agreement or other
agreement, instrument or document heretofore, now or hereafter
entered into between Lessee and Owner, or between Lessee and any
parent, subsidiary or affiliate of Owner, or between Lessee and
Lender, or between Lessee and LC Issuer, or between Lessee's
Parent and Owner or between Lessee's Parent and Lender or between
Lessee's Parent and LC Issuer or (ii) under any promissory note
or guarantee heretofore, now or hereafter executed by Lessee or
Lessee's Parent and delivered to any party referred to in clause
(i) above evidencing or guaranteeing a loan made by any such
party to Lessee, Lessee's Parent or Owner; or any obligation of
Lessee or Lessee's Parent, to any Person (other than Owner, or
any parent, subsidiary or affiliate of Owner) in excess of $2
million relating to the payment of borrowed money or the payment
of rent or hire under any lease agreement, shall be declared to
be due and payable or otherwise accelerated prior to the maturity
thereof by reason of a default in payment or performance by
Lessee or Lessee's Parent (excluding any such default which is
being contested in good faith by Lessee or Lessee's Parent by
appropriate proceedings and the liability for which has not been
reduced to judgment); or an attachment or other Lien shall be
filed or levied against a substantial part of the property of
Lessee or Lessee's Parent (taken in aggregate), and such judgment
shall continue unstayed and in effect, or such attachment or Lien
shall continue undischarged or unbonded, for a period of thirty
(30) days; or
(f) Lessee or Lessee's Parent shall become insolvent or make
an assignment for the benefit of creditors or consent to the
appointment of a trustee or receiver; or a trustee or a receiver
shall be appointed for Lessee or Lessee's Parent or for a
substantial part of its property without its consent and shall
not be dismissed for a period of sixty (60) days; or any petition
for the relief, reorganization or arrangement of Lessee or
Lessee's Parent, or any other petition in bankruptcy or for the
liquidation, insolvency or dissolution of Lessee or Lessee's
Parent, shall be filed by or against Lessee or Lessee's Parent
and, if filed against Lessee or Lessee's Parent, shall be
consented to or be pending and not be dismissed for a period of
sixty (60) days, or an order for relief under any bankruptcy or
insolvency law shall be entered by any court or governmental
authority of competent jurisdiction with respect to Lessee or
Lessee's Parent; or any execution or writ or process shall be
issued under any action or proceeding against Lessee or Lessee's
Parent whereby any of the Leased Property may be taken or
restrained (other than a Taking); or Lessee's or Lessee's
Parent's corporate existence shall cease; or Lessee or Lessee's
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Parent shall (whether in one transaction or a series of
transactions) without Owner's prior written consent, sell,
transfer or dispose of, or pledge or otherwise encumber, all or
substantially all of its assets or property, or consolidate or
merge with any other entity (except as otherwise permitted under
Section 19(a) hereof), or become the subject of, or engage in, a
leveraged buy-out or any other form of corporate reorganization;
(g) any representation, warranty, statement or certification
made by Lessee under this Lease or in any document or certificate
furnished to Owner or any Assignee in connection herewith or
pursuant hereto, shall prove to be untrue or incorrect in any
material respect when made, or shall be breached;
(h) a default or an Event of Default shall have occurred
under the Lease Guaranty; or
(i) (A) the Lender shall be unable to make a draw
request under any outstanding Letter of Credit because it has
deemed that the conditions in such Letter of Credit for a drawing
thereunder not to have been met or (B) a Draw Conditions Failure
shall have occurred and, in the case of either (A) or (B), the
Lessee shall not have previously delivered a Nonreturn Option
Notice pursuant to Section 30(d) hereof or shall not have issued,
or shall not be deemed to have issued a Special Nonreturn Option
Notice pursuant to Section 4(c) hereof.
Section 24. Remedies Upon Default. Upon the occurrence of
any Event of Default and at any time thereafter so long as the
same shall be continuing, Owner may exercise one or more of the
following remedies:
(a) The Owner may take action at law or in equity to
collect any payments then due or thereafter to become due under
this Lease, or to enforce performance and observance of any term,
covenant or condition of this Lease applicable to Lessee.
(b) The Owner may, in addition to or in lieu of taking such
action at law or in equity as it may otherwise be entitled to,
terminate the leasehold estate created hereby by giving Lessee
not less than forty-five (45) days' prior written notice of the
date Owner elects to make such termination effective (such notice
period is referred to as the "Standstill Period") and, subject to
the Lessee's rights under Section 24(e) below, the Owner may upon
or after the completion of the Standstill Period repossess the
Leased Property without further notice, either by summary
proceeding or other suitable action either at law or in equity or
otherwise, and without being deemed guilty of any manner of
trespass and without prejudice to any remedies which might
otherwise be used to demand, sue for or collect arrears of Base
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Rental and Additional Rental and any other accrued obligations of
Lessee under this Lease, and Lessee hereby waives all statutory
rights (including without limitation rights of redemption, if
any, to the extent such rights may be lawfully waived), provided,
however, that if the Basic Lease Term or Extension Lease Term
then in effect would otherwise expire during said Standstill
Period, such Basic Lease Term or Extension Lease Term shall be
extended to the end of the Standstill Period and Lessee shall be
liable for the payment of all Basic Rent and Additional Rent
during such extended rental period. In calculating the amount of
any deficiency for which Lessee shall be liable hereunder, there
shall be included, in addition to Base Rental and Additional
Rental, the value of all other considerations agreed to be paid
or performed by Lessee under this Lease. In calculating the
amounts to be paid by Lessee pursuant to the foregoing sentence,
there shall also be included all of the Owner's reasonable
expenses in connection with any sale or reletting of the Leased
Property, including, without limitation, all repossession costs,
brokerage commissions, fees for legal services and expenses of
preparing the Leased Property for such sale or reletting, it
being agreed by Lessee that the Owner may, but shall not be
obligated to, (A) relet the Leased Property or any other portion
thereof for a term or terms which may at the Owner's option be
equal to or less than or exceed the period which would otherwise
have constituted the balance of the Interim Lease Term, the Basic
Lease Term or an Extension Lease Term then in effect and may
grant such concessions and free rent as the Owner in its
reasonable judgment considers advisable or necessary to relet the
same, (B) make such alterations, repairs and decorations in or to
the Leased Property as the Owner in its reasonable judgment
considers advisable or necessary to sell or relet the same, or
(C) keep the Leased Property vacant. No action of the Owner in
accordance with the foregoing or failure to sell or relet or to
collect rent upon reletting shall operate or be construed to
release or reduce Lessee's liability hereunder except (i) that a
sale of the Leased Property not subject to this Lease shall
terminate any further accruals of rent hereunder and Owner's only
remedy in respect of such rentals shall be pursuant to Section
24(c) below. Upon the occurrence and during the continuation of
an Event of Default, the Owner shall also be entitled to
foreclose upon any fixtures, furniture or equipment or other
personalty which is part of the Leased Property pursuant to the
Uniform Commercial Code of New Jersey.
(c) Whether or not Owner shall have exercised, or shall
thereafter at any time exercise, any of its rights under
subsection (a) or (b) above with respect to the Leased Property
(but subject to Lessee's rights set forth in Section 24(e)
hereof), Owner, by written notice to Lessee specifying a payment
date, may demand that Lessee pay to Owner, and Lessee shall pay
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to Owner, on the payment date specified in such notice
("Liquidated Damage Payment Date") which shall not be earlier
than the end of the Standstill Period and shall not be later than
the end of the then applicable Interim Lease Term, Basic Lease
Term or Extension Lease Term (if the Standstill Period expires
after the applicable Interim Lease Term, Basic Lease Term or
Extension Lease Term, the Liquidated Damage Payment Date shall be
the first Business Day after the last day of the Standstill
Period), as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the Base Rental due for the Leased Property
for any Rental Period commencing after the Liquidated Damage
Payment Date and in lieu of the exercise by Owner of its remedies
under subsection (b) above in the case of a reletting of the
Leased Property or with respect to a sale of the Leased
Property), the sum of (i) all unpaid Base Rental payable for all
Rental Periods through the Liquidated Damage Payment Date
specified in such notice, plus (ii) all unpaid Additional Rental
due with respect to such Leased Property as of the Liquidated
Damage Payment Date, plus (iii) an amount equal to the
Termination Value of such Leased Property computed as of the Rent
Payment Date coincident with or next preceding the Liquidated
Damage Payment Date, or if the Liquidated Damage Payment Date
occurs prior to the Basic Term Commencement Date, an amount equal
to one hundred percent (100%) of all Project Costs incurred as of
the later of (A) Liquidated Damage Payment Date or (B) the date
of payment, plus, to the extent such amounts have not been
included in Project Costs, all interest, cost, fees,
reimbursements and all other amounts due and payable either to
Owner or Lender under the Transaction Documents and which are
incurred prior to the date of payment, and, on payment of such
amounts, Owner shall convey the Leased Property to Lessee as an
Owner's Conveyance as provided in Section 32 below.
(d) Subject to Lessee's rights under Section 24(e) below,
Owner may exercise any other right or remedy which may be
available to it under applicable law or proceed by appropriate
court action to enforce the terms hereof or to recover damages
for the breach hereof or to rescind this Lease. The remedies
herein conferred upon and reserved to the Owner are not intended
to be exclusive of any other available remedy or remedies which
the Owner may have at law or in equity, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Lease or now or hereafter existing
at law or in equity. No delay or omission to exercise any right
or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and
as often as may be deemed expedient. In order to entitle the
Owner to exercise any remedy reserved to it in this Section, it
shall not be necessary to give any notice, other than such notice
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as may be required in this Section.
In addition, Lessee shall be liable for all costs and
expenses, including without limiting the generality of the
foregoing, reasonable attorney's fees, incurred by Owner or any
Assignee by reason of the occurrence of any Event of Default or
the exercise of Owner's remedies with respect thereto, including
all costs and expenses incurred in connection with the surrender
of the Leased Property in accordance with Section 33 hereof or in
placing the Leased Property in the condition required by said
Section. No express or implied waiver by Owner of any Event of
Default shall in any way be, or be construed to be, a waiver of
any future or subsequent Event of Default. To the extent
permitted by applicable law, Lessee hereby waives any rights now
or hereafter conferred by statute or otherwise which may require
Owner to sell, lease or otherwise use the Leased Property in
mitigation of Owner's damages as set forth in this Section 24 or
which may otherwise limit or modify any of Owner's rights and
remedies in this Section 24.
Notwithstanding any provision contained in this Lease to the
contrary, any and all remedies available to Owner upon the
occurrence of an Event of Default shall survive the termination
of this Lease.
(e) If the Owner notifies the Lessee that it elects to
repossess the Leased Property pursuant to Section 24(b) hereof or
to rescind the Lease pursuant to Section 24(d) hereof, the Lessee
shall be entitled to require the Owner to exercise the remedies
set forth in Section 24(c) hereof in lieu of repossessing the
Leased Property or in lieu of rescinding the Lease by delivering
to the Owner at any time during the Standstill Period written
notice of its election to have the Owner exercise its remedies
under Section 24(c). Unless the Owner specifies another date as
the Liquidated Damage Payment Date pursuant to the notice
required under Section 24(c) hereof, the Liquidated Damage
Payment Date shall be the first Business Day after the last day
of the Standstill Period. If no notice of such election by
Lessee is received by Owner within the Standstill Period, the
Owner may pursue the remedies set forth in Section 24(b) or
Section 24(d) hereof.
Section 25. Owner's Right to Perform for Lessee. If Lessee
fails to make any payment of Additional Rental required to be
made by it hereunder or fails to obtain the insurance required by
Section 16 hereof or to otherwise perform or comply with any of
its material agreements contained herein, Owner may (but shall
not be required) itself, after notice to Lessee, make such
payment or perform or comply with such agreement, and the amount
of such payment and the amount of the reasonable expenses of
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Owner incurred in connection with such payment or the performance
of or compliance with such agreement, together with interest on
all such amounts calculated at a per annum rate equal to the rate
equal to the Default Rate applicable under the Loan shall be due
and payable by Lessee upon demand by Owner; provided, however,
that no such payment, performance or compliance by Owner shall be
deemed to cure or waive any Event of Default hereunder.
Section 26. Expenses. Lessee agrees, whether or not the
transactions contemplated by this Lease are consummated, but
solely to the extent such are incurred in connection with the
transactions contemplated under the Transaction Documents (i) to
pay the fees and expenses of the Trust Company (and any
successors or co-trustees) for ordinary or extraordinary services
as trustee under the Trust Agreement, including, without
limitation, the reasonable fees and expenses of its counsel, (ii)
all fees and expenses of the Owner, Beneficiary, Construction
Lender, the Long-Term Lender, LC Issuer (except that no fees
shall be payable by the Lessee or any other party to the LC
Issuer for the issuance of the Letter of Credit) and BFS
including, without limitation, the reasonable fees and expenses
of their respective counsel and (iii) to pay to or reimburse
Owner, Beneficiary, Construction Lender, Long-Term Lender, LC
Issuer and BFS for (A) the payment of lien searches, filing and
transfer fees, and taxes, fees and expenses relating to the
titling and registration of and recording of this Lease or any
mortgage, collateral, assignment of leases and rents, UCC
financing statements and any other security documents with
respect to the Leased Property incurred by or on behalf of Owner,
Construction Lender, Long-Term Lender and LC Issuer, (B)
appraisal fees, engineering fees, environmental assessments,
title insurance fees, survey costs and (C) all other fees and
expenses which the Owner is obligated to pay in connection with
the negotiation and documentation of, and consummation of the
transactions contemplated by, and the ongoing performance of the
various parties under this Lease, the Construction Loan
Documents, the Long-Term Loan Documents, the Investor Loan
Documents, the Construction Agency Agreement, the Transaction
Documents, and any other instruments and documents related to the
transaction described in this Lease and said other documents,
including, without limiting the generality of the foregoing, the
organization and qualification of the Owner. The obligation of
Lessee to pay all such fees, expenses and other amounts shall
survive the termination of this Lease for any reason.
Section 27. Further Assurances. Further Assurances .
Lessee will promptly and duly execute and deliver to Owner and
any Assignee of Owner such other documents and assurances,
including, without limitation, such amendments to this Lease as
may be reasonably required by Owner and by any Assignee of Owner,
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and Uniform Commercial Code financing statements and continuation
statements, and will take such further action as Owner or any
Assignee of Owner may from time to time reasonably request in
order to carry out more effectively the intent and purposes of
this Lease and to establish and protect the rights and remedies
created or intended to be created in favor of Owner and of any
Assignee of Owner and their respective rights, title and
interests in and to the Leased Property or portions thereof.
Owner, at Lessee's sole cost and expense, will promptly and
duly execute and deliver to Lessee and any permitted assignee of
Lessee such other documents and assurances, including, without
limitation, such amendments to this Lease as may be reasonably
required by Lessee and by any permitted assignee of Lessee, and
will take such further action as Lessee or any permitted assignee
of Lessee may from time to time reasonably request in order to
carry out more effectively the intent and purposes of this Lease
and to establish and protect the rights and remedies created or
intended to be created in favor of Lessee and of any permitted
assignee of Lessee and their respective rights, title and
interests in and to the Leased Property or portions thereof.
Section 28. Notices. All notices provided for or required
under the terms and provisions hereof shall be in writing, and
any such notice shall be deemed given (a) when personally
delivered, (b) when deposited in the United States mails, with
proper postage prepaid, for first class certified mail, return
receipt requested, or (c) when delivered by an overnight courier
service, addressed (i) if to Owner or Lessee, at their respective
addresses as set forth below or at such other address as either
of them shall, from time to time, designate in writing to the
other, and (ii) if to any Assignee, to the address of such
Assignee as such Assignee shall designate in writing to Owner and
Lessee.
If to Owner:
First Fidelity Bank, National Association, trustee
c/o First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103
Attn: W. Jeffrey Kramer
With a copy to:
James G. Scantling, Esq.
Bingham, Dana & Gould
100 Pearl Street
Hartford, Connecticut 06103-4507
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If to Lessee:
Tiffany and Company
727 Fifth Avenue
New York, NY 10022
Attn: General Counsel
With a copy to:
Tiffany and Company
5 Sylvan Way
Parsippany, New Jersey 07054
Attn: Assistant Treasurer
Copies of any notices sent either to Owner or Lessee shall
be delivered to each Assignee and to the LC Issuer. Notices sent
to the LC Issuer shall be sent to the address set forth below:
BOT Financial Corporation
125 Summer Street
Boston, Massachusetts 02110
Attn: Senior Vice President-Administration
Section 29. Lessee's Extension Lease Options and End of
Term Purchase Options.
(a) If (i) if no Default and no Event of Default shall have
occurred and be continuing; and (ii) this Lease shall not have
been earlier terminated, Lessee shall be entitled, at its option
upon written notice to Owner, as hereinafter provided, to enter
into the Basic Lease Term if all of the conditions set forth in
Section 4(a) hereof have been met and Owner is not entitled to
terminate the leasehold estate pursuant to Section 4(c) hereof at
the expiration of the Interim Lease Term and after the Basic
Lease Term Expiration Date, to extend this Lease annually for up
to nine consecutive Extension Lease Terms of one (1) year each.
The Lessee shall be conclusively deemed to have elected to enter
into the Basic Lease Term unless Lessee shall give written notice
to Owner on or prior to January 31, 1996 that Lessee will not
enter into the Basic Lease Term. The first Extension Lease Term
will commence on the day immediately following the Basic Lease
Term Expiration Date, and each succeeding Extension Lease Term
will commence on the day immediately following the last day of
the immediately preceding Extension Lease Term. All of the
provisions of this Lease shall be applicable during each
Extension Lease Term. Except during the ninth (9th) Extension
Lease Term, this Lease shall be deemed automatically extended for
the succeeding Extension Lease Term without the necessity of any
notice or the taking of any other action unless Lessee shall give
written notice to Owner that Lessee does not elect to extend the
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Lease for the next succeeding Extension Lease Term at least three
hundred and sixty-five (365) days prior to the last day of the
then current Term. Unless Lessee has exercised its purchase
option under Section 4(c) or Section 29(b) hereof or Lessee has
delivered to Owner a Nonreturn Option Notice or has issued or is
deemed to have issued a Special Nonreturn Option Notice, in the
event Lessee elects not to enter into the Basic Lease Term or to
exercise said extension option the Leased Property shall be
returned to Owner in accordance with the provisions of Section 34
hereof, in which case the provisions of Section 31(b) hereof
shall apply(unless delivered to a bidder in accordance with
Section 30(b) hereof, in which case the provisions of Section
31(a) shall apply). If the Leased Property has not been so
returned or delivered to Owner on the last day of the then
effective Interim Lease Term, Basic Lease Term or Extension Lease
Term, as the case may be, Lessee shall pay Base Rental and
Additional Rental payable as provided in Section 34(f) hereof.
If Lessee elects not to enter into the Basic Lease Term or has
not renewed this Lease for an Extension Lease Term as provided
above, then during the period from February 1, 1996 to the end of
the Interim Lease Term and during the three hundred sixty-five
(365)-day period preceding the date on which the then effective
Basic Lease Term or Extension Lease Term, as the case may be,
shall terminate or expire, Owner may, subject to all applicable
governmental laws, rules and regulations, place signs in
locations on the grounds in front of the Leased Property
advertising that the same will be available for rent or purchase.
(b) If (i) no Default and no Event of Default shall have
occurred and be continuing which, in the reasonable opinion of
the Owner, materially and adversely affects the ability of the
Lessee to effect a purchase of the Leased Property under this
Lease, and (ii) this Lease shall not have been earlier
terminated, Lessee shall be entitled, at its option, upon written
notice to Owner, as hereinafter provided, to purchase Owner's
interest in the Leased Property in accordance with Section 32
hereof, on the then applicable Termination Date, for an amount
equal to the Purchase Price applicable to the Interim Lease Term,
Basic Lease Term or Extension Lease Term thereof then ending
(i.e., the Termination Date), plus, in the event that Lessee
exercises its purchase option hereunder prior to the end of the
Maximum Term, the Reinvestment Premium, if any. To exercise said
purchase option, Lessee shall give written notice to Owner to
such effect at least three hundred sixty-five (365) days prior to
the expiration of the then current Term. If Lessee gives written
notice of its exercise of its right to purchase to Owner, such
notice shall constitute a binding obligation of Lessee to
purchase the Leased Property and to pay Owner the Purchase Price
and, if applicable, the Reinvestment Premium on the Termination
Date. Notwithstanding the provisions of Section 19 above, Lessee
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may freely assign its option to purchase to any third party.
Section 30. Third Party Sale of Leased Property.
(a) Remarketing Obligations. If Lessee does not exercise
either its option to to enter into the Basic Lease Term or renew
this Lease or its option to purchase the Leased Property and
regardless of whether the Lessee has delivered a Nonreturn Option
Notice, then Lessee shall have the obligation during the final
three hundred sixty-five (365) days of the then current Term (the
"Remarketing Period"), to use such commercially reasonable
efforts as would be made by a self- interested property owner in
the area to actively market commercial property to obtain bona
fide bids for the Leased Property from prospective purchasers who
are financially capable of purchasing the Leased Property for
cash on an as-is, where-is basis, without recourse or warranty on
the terms and conditions set forth in Section 32 hereof
applicable to Owner Conveyances. The Lessee shall be responsible
for hiring brokers who shall be reasonably acceptable to Owner
and promptly upon Owner's request, shall permit inspection of the
Leased Property and any maintenance records relating to the
Leased Property by Owner, Assignee or any potential purchasers,
and shall otherwise do all things necessary to sell and deliver
possession of the Leased Property to any purchaser. All such
marketing of the Leased Property shall be at Lessee's sole
expense. The Lessee shall allow the Owner and any potential
purchaser access to the Leased Property for purposes of showing
the same. All bids received by Lessee prior to the end of the
Basic Lease Term, or Extension Lease Term if applicable, shall be
immediately certified to Owner in writing, setting forth the
amount of such bid and the name and address of the person or
entity submitting such bid. Notwithstanding the foregoing, Owner
shall have the right, but not the obligation, to seek bids for
the Leased Property during the Remarketing Period.
(b) Delivery of Leased Property to Third Party Buyer. Not
later than the Termination Date, Lessee shall deliver the Leased
Property to the bidder, if any, who shall have submitted such
highest bid during the Remarketing Period, and Owner shall
simultaneously therewith sell (or cause to be sold), its
ownership in such Leased Property to such bidder, provided, that
Owner shall not be obligated to sell the Leased Property if
either (x) all of the conditions set forth in Sections 29(b), 32
and 33 have not been complied with on or before such Termination
Date or (y) the Net Proceeds of Sale of the Leased Property would
be less than the Maximum Owner Risk Amount applicable as of the
Termination Date; and, further provided, that in any event, Owner
shall not sell the Leased Property under the circumstances
described in clause (y) without the prior written consent of the
LC Issuer. The Net Proceeds of Sale shall be retained by the
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Owner. This Section 30(b) is for the benefit of, and may be
enforced by, LC Issuer as a third party beneficiary.
(c) Delivery of Appraisals and Reports. Owner shall have
the right in its sole discretion, but not the obligation, to
retain a third party as its agent for the purpose of determining
compliance of the Lessee with the conditions applicable to a
return of the Leased Property pursuant to Section 34, at Lessee's
cost and expense. Upon the request of Owner and at Lessee's sole
cost and expense, Lessee shall provide Owner with a written
report describing in reasonable detail Lessee's efforts during
the Remarketing Period to obtain bona bids for the purchase of
the Leased Property, including a list of all Persons approached
for the purpose of soliciting bids to purchase the Leased
Property.
(d) Nonreturn Option Notice. If Lessee does not exercise
either its option to enter into the Basic Lease Term or to renew
this Lease or its option to purchase the Leased Property at the
end of the Term and if no Default or Event of Default has
occurred and is continuing, then at any time on or prior to July
31, 1996, if the Termination Date is to occur prior to the Basic
Term Commencement Date, or one-hundred eighty (180) days prior to
the last day of the then current Basic Lease Term or Extension
Lease Term, as the case may be, the Lessee may deliver to the
Owner a written notice that on the Termination Date either the
Leased Property will be sold to a third party pursuant to a bid
which meets the requirements of Section 30(b) above or the Lessee
shall purchase the Leased Property for the full Purchase Price
and Reinvestment Premium, if any. The written notice described
in the preceding sentence is referred to as a "Nonreturn Option
Notice." If the Lessee delivers a Nonreturn Option Notice to
Owner and the Lessee desires to sell the Leased Property to a
third party, it shall be required to submit a third-party bid
which meets the requirements of Section 30(b) no later than
thirty (30) days prior to the Termination Date; otherwise, the
Lessee shall be obligated to purchase the Leased Property on the
Termination Date as if it had elected to purchase the Leased
Property pursuant to Section 29(b).
Section 31. End of Term Adjustment.
(a) This Section 31(a) shall apply only if a sale of the
Leased Property has been consummated on or prior to the
Termination Date pursuant to Section 30(b) hereof. If the Net
Proceeds of Sale of the Leased Property from a sale to a third
party are less than the Purchase Price of the Leased Property as
of such Termination Date, Lessee shall, on the Termination Date,
pay to Owner as an End of Term Adjustment, in immediately
available funds, an amount equal to such deficiency (a
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"Deficiency") as an adjustment to the Rent payable under this
Lease; provided, however, that if all of the Limited Lessee Risk
Conditions have been met, the amount of the Deficiency payable by
Lessee with respect to the Leased Property shall not exceed the
Maximum Lessee Risk Amount then applicable. If the Net Proceeds
of Sale of the Leased Property exceed the Purchase Price, Owner
shall pay to Lessee an amount equal to such excess as an
adjustment to the Rent paid or payable under this Lease;
provided, however, that Owner shall have the right to offset
against such adjustment payable by Owner, any other amounts then
due and payable from Lessee to Owner hereunder or under any other
agreements between Owner and Lessee. Lessee shall also pay to
Owner on the Termination Date the Base Rental due and payable for
the Leased Property on the Termination Date, plus all Additional
Rental then due and owing. Owner's obligation to sell (or cause
to be sold) the Leased Property to a third party under Section 30
is contingent upon the receipt of the amounts, if any, payable by
Lessee pursuant to this Section 31(a) and Section 31(c).
(b) If upon the expiration of the Interim Lease Term, the
Basic Lease Term or any Extension Lease Term or upon any
Termination Date, Lessee does not purchase the Leased Property
pursuant to Section 4(c) or Section 29 hereof, a third party sale
is not consummated in accordance with Section 30 hereof, the
Lessee does not elect to enter into the Basic Lease Term or does
not extend the Term of the Lease by an Extension Term pursuant to
Section 29(a) hereof, then Lessee shall, on the Termination Date,
pay to Owner as an End of Term Adjustment as an adjustment to the
rent payable under this Lease, an amount equal to (i) the Maximum
Lessee Risk Amount then applicable if all of the Limited Lessee
Risk Conditions have been met, or (ii) the Purchase Price, if all
of the Limited Lessee Risk Conditions have not been met, plus, in
either case, the Base Rental due and payable on the Termination
Date, plus all Additional Rental then due and owing. The total
selling price realized from any sale of the Leased Property after
the Termination Date shall be retained by Owner. Lessee shall
remain liable for the payment of, and upon the consummation by
Owner of the sale of the Leased Property after the Termination
Date, Lessee shall pay or reimburse Owner for the payment of, all
applicable sales, excise, transfer, recording or other taxes
imposed as a result of such sale, and fees and all expenses
incurred by Owner as a result of such sale, including, without
limitation, expenses incurred in titling and registering the
conveyance of Owner's title to the Leased Property, title
insurance fees and expenses and fees and expenses of counsel, but
the Lessee shall not be required to pay or reimburse Owner for
any tax based upon or measured solely by Owner's or Beneficiary's
gross, net or taxable income realized upon such sale or any taxes
payable in the nature of capital gains, unless any such tax is in
lieu of or a substitute for any sales, excise, transfer or
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recording taxes imposed as a result of a sale of the Leased
Property.
(c) If the Lender submits a draw request to the LC Issuer
for payment of the Letter of Credit and there is a Draw
Conditions Failure, such shall constitute an Event of Default by
Lessee hereunder, but the occurrence of an Event of Default for
such reason shall not operate as a limitation or waiver of any
rights that Owner, Beneficiary or Lessee may have against LC
Issuer for wrongful dishonor, and in such event, (i) Owner agrees
to take all actions (and agrees to cause the Beneficiary and any
Assignee to take all actions) which are reasonably required to
preserve any claims against the LC Issuer and (ii) upon payment
in full of all amounts due from Lessee at the expiration of this
Lease, the Owner shall assign (and agrees to cause the
Beneficiary and any Assignee to assign) all of its rights against
LC Issuer to the Lessee. If an Event of Default described in
Section 23(i) hereof shall have occurred by reason of the Owner's
default under the Reimbursement and Remarketing Agreement, the
Lessee shall be subrogated to the LC Issuer's rights against the
Owner and Leased Property, all as provided in Section 13 of the
Reimbursement and Remarketing Agreement.
(d) In the event a Termination Date occurs prior to the last
day of the Maximum Term hereof, Lessee shall pay to Owner on the
Termination Date, in addition to any other obligations hereunder,
the Reinvestment Premium, if any
(e) If (A), as of the Termination Date, the Lessee shall
have met all of the Limited Lessee Risk Conditions and the Lessee
shall not have received notice of the occurrence of an Event of
Default described in Section 23(i) hereof, and (B) an Event of
Default described in Section 23(i) hereof subsequently occurs on
or after the Termination Date, then the Lessee shall pay in
immediately available funds and on demand from Owner (or its
Assignee) an amount equal to the difference, if any, between (x)
the amount which would have been payable by the Lessee on the
Termination Date under Section 31(a) or 31(b) hereof as if the
Limited Lessee Risk Conditions were not met as of such date and
(y) the amount actually paid by Lessee on the Termination Date
pursuant to Section 31(a) or 31(b) hereof, plus interest at the
Default Rate on such difference for the period from the
Termination Date to the date of payment.
Section 32. Procedure for Owner Conveyance. In the event
of an Owner Conveyance, the terms and conditions of this Section
32 shall apply. On the closing date for such transfer:
(i) (A) The Owner shall have received all amounts due and
payable to it under the applicable provisions of this Lease, and
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without limitation of the foregoing, Lessee shall have paid all
Basic Rental and Additional Rental and all other sums due and
payable by Lessee under this Lease, through the date of
consummation of the transfer, in each case in funds of the type
specified and otherwise in accordance with Section 33 hereof.
(ii) Each Owner's Conveyance shall be made by a good and
sufficient bargain and sale deed, or such other instruments as
may be appropriate in the circumstances, which shall transfer all
of the Owner's interest in the Leased Property to Lessee or third
party, as the case may be. OWNER'S TRANSFER OF ITS OWNERSHIP IN
THE LEASED PROPERTY SHALL BE ON AN AS-IS, WHERE-IS BASIS, WITHOUT
ANY REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS
TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY,
HABITABILITY, DURABILITY, SUITABILITY OR FITNESS OF THE LEASED
PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER
CONCERNING THE LEASED PROPERTY OR ANY PORTION THEREOF. LESSEE
AND, IF APPLICABLE, ANY THIRD PARTY SHALL WAIVE ANY CLAIM
(INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN
TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST OWNER FOR ANY LOSS,
DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE
CAUSED BY THE LEASED PROPERTY OR BY LESSEE'S LOSS OF USE THEREOF
FOR ANY REASON WHATSOEVER. Owner shall convey all of its then
right, title and interest in and to the Leased Property to Lessee
or third party, as the case may be, free and clear of any Owner
Liens (other than Permitted Liens), and any liens securing debt
incurred by Owner, whether recourse or otherwise, including but
not limited to the Construction Loan and the Long-Term Loan and
any replacements for or additions to the foregoing, but NO
REPRESENTATION OR WARRANTY SHALL BE MADE BY OWNER AS TO THE
EXISTENCE OF ANY OTHER LIENS OR ENCUMBRANCES ON THE LEASED
PROPERTY AS OF THE DATE OF SALE.
(iii) The Lessee shall have paid all charges and expenses
incident to the transfer of the Leased Property in an Owner's
Conveyance, including, without limitation, all transfer taxes,
recording fees, title insurance premiums and federal, state and
local taxes arising as a result of such transfer. Lessee shall
have paid all fees and expenses of Owner's counsel and Lender's
counsel incurred by reason of the transfer.
Section 33. Time of the Essence; Manner of Payment. The
provisions of this Lease requiring the payment by Lessee to the
Owner or to any third party, whether such payments are for Base
Rental, Additional Rental, Termination Value, Purchase Price, End
of Term Adjustment, Maximum Lessee Risk Amount, Late Charges or
otherwise are of the essence of this Lease, and time is of the
essence for any payment and performance of such obligations of
Lessee set forth herein. All payments to be made to Owner
hereunder shall be in immediately available funds paid by wire
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transfer to an account designated by Owner, or at Owner's
request, by certified or cashier's check.
Section 34. Return of Leased Property.
(a) Upon the expiration or earlier termination of the Term
(unless Lessee has purchased the Leased Property pursuant to
Section 4(c) or Section 29 hereof, or has delivered a Nonreturn
Option Notice or has issued or is deemed to have issued a Special
Nonreturn Option Notice), Lessee will vacate and surrender and
deliver possession of the Leased Property to Owner in broom clean
condition and in the condition required pursuant to Section 13(a)
hereof. Lessee shall remove from the Leased Property on or prior
to such expiration or earlier termination of this Lease, all
personal property, furniture and fixtures (other than equipment
and fixtures which form a part of the building systems) situated
thereon which is not the property of Owner, and shall repair any
damage caused by such removal. Property not so removed shall
become the property of Owner, and Owner may cause such property
to be removed from the Leased Property and disposed of, and
Lessee shall pay the reasonable cost of any such removal and
disposition and of repairing any damage caused by such removal.
(b) Except for surrender upon the expiration or earlier
termination of the Term hereof, no surrender to Owner of this
Lease or of the Leased Property shall be valid or effective
unless agreed to and accepted in writing by Owner and any
Assignee of Owner.
(c) Without limiting the generality of the foregoing, upon
the surrender and return of the Leased Property to Owner
pursuant to this Section 34, the Leased Property shall (i) be
capable of being immediately utilized by a third-party purchaser
or third-party lessee without further inspection, construction,
repair, replacement, alterations or improvements, licenses,
permits, or approvals, except for any of the foregoing required
solely by virtue of the change in ownership (other than to Owner
or Assignee), use or occupancy of the Leased Property, (ii) be in
accordance and compliance with all Legal Requirements and
Environmental Legal Requirements including, without limitation,
any of the foregoing required by virtue of a change in ownership,
use or occupancy of the Leased Property other than to Lessee,
(iii) be free and clear of all Liens, other than any Permitted
Liens and Owner Liens and any liens securing debt incurred by
Owner, whether recourse or otherwise, including but not limited
to the Construction Loan, the Investor Loan and the Long-Term
Loan and any replacements for or additions to the foregoing.
(d) On or prior to the date of such surrender and return of
the Leased Property, Owner shall have received from Lessee, at
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Lessee's expense, evidence satisfactory to Owner and each
Assignee, of compliance with the provisions of this Section 34,
including without limitation, an environmental assessment for the
Leased Property addressed in form and substance satisfactory to
Owner and each Assignee or, in lieu of addressing to such parties
directly, accompanied by a letter permitting Owner and each
Assignee to rely thereon, performed by an independent, licensed
professional engineer satisfactory to Owner and each Assignee,
and which assessment (x) shall be sufficient in scope to
determine compliance with the applicable Environmental Legal
Requirements, (y) shall reveal no actual or potential
environmental liabilities which cannot be remediated by Lessee as
provided in the following clause (z), and (z) if such
environmental assessment reveals the need for additional review,
Lessee shall have provided such additional information or
environmental assessments as are required by Owner and each
Assignee and, subject to Section 20 hereof, any remediation
recommended therein to be performed shall have been performed,
and evidence of compliance with Section 34(c)(ii).
(e) Upon such return of the Leased Property to Owner, Lessee
shall deliver to Owner a then current title insurance policy or a
binding commitment to issue a title insurance policy written by a
title insurance company reasonably acceptable to Owner, insuring
good and marketable title in the Leased Property in an amount
equal to the Termination Value determined as of the Termination
Date, unencumbered except for Owner Liens or Permitted Liens.
Upon the request of Owner, Lessee shall continue to maintain its
insurance policies for the Leased Property required under Section
15 hereof if able to do so on a commercially reasonable basis,
provided that Owner pays or reimburses Lessee for its pro rata
costs thereof.
(f) Until the Leased Property has been returned to Owner in
the condition required under Section 34(a) through (d) hereof,
Lessee shall continue to pay Owner, on the same dates on which
Base Rental was payable during the Basic Lease Term or any
Extension Lease Term thereof, 125% of the Base Rental that was
payable on the last Rent Payment Date of the Basic Lease Term
thereof, or if the Term has been renewed pursuant to Section
29(a) hereof, 125% of the same Base Rental that was payable on
each Rent Payment Date during the last Extension Lease Term,
plus, in each case, all Additional Rental for which Lessee is
liable applicable to such periods.
(g) The provisions of this Section 34 are of the essence of
this Lease, and any breach thereof shall be deemed an Event of
Default hereunder, and upon application to any court of equity
having jurisdiction in the premises, Owner shall be entitled to a
decree against Lessee requiring specific performance of the
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covenants of Lessee set forth in this Section 34.
Section 35. Financial Information. Lessee agrees to
furnish Owner (a) as soon as available, and in any event within
105 days after the last day of each fiscal year of Lessee, a copy
of the balance sheet of Lessee's Parent on a consolidated basis
as of the end of such fiscal year, and related consolidated
statements of income and retained earnings of Lessee's Parent for
such fiscal year, certified by an independent certified public
accounting firm of recognized standing, each on a comparative
basis with corresponding statements for the prior fiscal year,
and a copy of Lessee's Parent's form 10-K, if any, filed with the
Securities and Exchange Commission for such fiscal year; (b)
within 50 days after the last day of each fiscal quarter of
Lessee's Parent (except the last such fiscal quarter), a copy of
the balance sheet as of the end of such quarter, and statement of
income and retained earnings covering the fiscal year to date of
Lessee Parent on a consolidated basis, each on a comparative
basis with the corresponding period of the prior year, all in
reasonable detail and certified by the treasurer or principal
financial officer of Lessee's Parent, together with a copy of
Lessee's Parent's form 10-Q, if any, filed with the Securities
and Exchange Commission for such quarterly period; (c)
contemporaneously with its transmittal to each stockholder of
Lessee's Parent and to the Securities and Exchange Commission,
all such other financial statements and reports as Lessee's
Parent shall send to its stockholders and to the Securities and
Exchange Commission; (d) as soon as available to Lessee's Parent,
the notice of any material adjustment resulting from any audit of
the books and/or records of Lessee's Parent by any taxing
authority having jurisdiction over Lessee's Parent; and (e) such
additional financial information as Owner may reasonably request
concerning Lessee's Parent.
Section 36. Recording. Lessee will execute, acknowledge,
deliver and cause to be recorded or filed in the manner and place
required by any present or future law, a memorandum hereof, and
all other instruments, including, without limitation, financing
statements, continuation statements, releases and instruments of
similar character, which shall be reasonably requested by Owner
or any Assignee as being necessary or appropriate in order to
protect Owner's or Assignee's respective interests in the Leased
Property or to publish notice of or to create, maintain and
protect the lien and security interest intended to be created by
the mortgage securing the Loan and the other obligations of Owner
to Lender upon, and the interest of Lender in, the Leased
Property. If Lessee shall fail to comply with this Section 36,
Owner shall be and is hereby irrevocably appointed the agent and
attorney in fact of Lessee, to comply therewith, but this
sentence shall not prevent any default in the observance of this
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Section 36 by Lessee from constituting an Event of Default in
accordance with the provisions of this Lease. Lessee may record
a memorandum hereof whether or not requested by Owner.
Section 37. No Reliance. Lessee and Owner hereby mutually
acknowledge that in negotiating the terms of this Lease and all
other related agreements and documents, each has sought, obtained
and relied exclusively upon such accounting, actuarial, tax and
legal advice from its own or other independent sources as it has
deemed necessary, and further acknowledges that neither Lessee,
Owner, Lender, LC Issuer, BFS or any Assignee nor any of their
respective affiliates or personnel has represented or warranted
the legal, tax, economic, accounting, or other consequences of
the terms and provisions hereof and of the other related
agreements and documents.
Section 38. Miscellaneous. Any provision of this Lease
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating or
diminishing Owner's rights under the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable
law, Lessee hereby waives any provision of law which renders any
provision of this Lease prohibited or unenforceable in any
respect. In no event shall any amounts payable hereunder,
whether payable as Base Rental, Additional Rental or otherwise,
exceed any limits imposed by applicable law. To the extent any
amounts received by Owner exceeds the maximum amount permitted,
such payment shall be credited to future Base Rental payable
hereunder or at Owner's option, be refunded to Lessee. No term
or provision of this Lease may be amended, altered, waived,
discharged or terminated orally, but may be amended, altered,
waived, discharged or terminated only by an instrument in writing
signed by a duly authorized officer of the party against which
the enforcement of the amendment, alteration, waiver, discharge
or termination is sought. A waiver on any one occasion shall not
be construed as a waiver on a future occasion. All of the
covenants, conditions and obligations contained in this Lease
shall be binding upon and shall inure to the benefit of the
respective successors and assigns of Owner and (subject to the
restrictions of Section 19 hereof) Lessee. This Lease, the
Construction Agency Agreement and each related instrument,
document, agreement and certificate, collectively constitute the
complete and exclusive statement of the terms of the agreement
between Owner and Lessee with respect to the leasing of the
Leased Property, and cancel and supersede any and all prior oral
or written understandings with respect thereto.
-68-
<PAGE>
Section 39. Venue; Governing Law. Lessee agrees that at
Owner's sole election any suit, action or proceeding brought by
Owner against Lessee in connection with or arising out of this
Lease may be brought in any federal or state court in the State
of New Jersey, and Lessee waives personal service of all process
upon it and consents that service of process may be made by mail
or messenger directed to it at its address set forth above and
that service so made shall be deemed to be completed upon the
earlier of actual receipt or three (3) days after the same shall
have been posted to Lessee's said address. Nothing herein
contained shall affect Owner's right to serve legal process in
any other manner permitted by law or to bring any suit, action or
proceeding against Lessee or its property in the courts of any
other jurisdiction. This Lease shall in all respects be governed
by, and constructed in accordance with, the laws of the State of
New Jersey, including all matter of construction, validity and
performance.
Section 40. Estoppel Certificate. Lessee agrees from time
to time, upon not less than ten (10) days' prior written notice
from Owner, Lender or LC Issuer, to execute, acknowledge and
deliver to Owner, Lender or LC Issuer or any other Person
designated by Owner, Lender or LC Issuer , a statement in form
and substance reasonably satisfactory to the Person requesting
same certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that this Lease
is in full force and effect as modified and stating the
modifications), the dates to which Base Rental and Additional
Rental have been paid, and stating whether or not, to the best
knowledge of the signer of the certificate, Owner is in default
in performance of any covenant, agreement or condition in this
Lease and, if so, specifying each such default of which the
signer may have knowledge, it being intended that any such
statement may be relied upon by any prospective purchasers of the
Leased Property, any assignee of Owner, Lender or LC Issuer or
any prospective mortgage lender.
Section 41. Survival of Representations, Warranties and
Covenants. All representations, warranties, agreements,
covenants and obligations of Lessee herein are material, shall be
deemed to have been relied upon by Owner, and, unless by their
express terms expire as of an earlier date, shall survive and
continue in full force and effect notwithstanding the expiration
or earlier termination of this Lease in whole or in part,
including the expiration or termination of the Term with respect
to the Leased Property.
Section 42. Nonrecourse.
(a) Any provision of this Lease to the contrary
-69-
<PAGE>
notwithstanding, the liability of the Owner hereunder, if any,
shall be satisfied solely from the assets held in trust by the
Owner, including the Leased Property. This Lease is a trust
obligation of the Owner, and no recourse under or upon any
representation, warranty, obligation, covenant or agreement
contained herein or for any claim based hereon or in respect
hereto shall be had against any past, present or future trustee,
co-trustee, beneficiary, settlor, officer, employee or agent, as
such, of the Owner or any of their respective assets or
properties.
(b) It is expressly understood and agreed by the parties
hereto that (i) this Lease is executed and delivered by First
Fidelity Bank, National Association, not individually or
personally but solely as trustee under the Trust Agreement 1995-1
dated as of July 1, 1995 with the Beneficiary in the exercise of
powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the
part of the Owner is made and intended not as personal
representations, undertakings and agreements by First Fidelity
Bank, National Association, but is made and intended for the
purpose for binding only the Owner as the trustee under the Trust
Agreement, (iii) under no circumstances shall First Fidelity
Bank, National Association, be personally liable for the payment
of any indebtedness or expenses of the Trustee or be liable for
the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by the Owner under this Lease.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be duly executed under seal by their duly authorized
representatives effective as of the date first written above.
First Fidelity Bank, National Association,
not in its individual capacity but solely as
Trustee under Trust Agreement 1995-1
dated as of July 1, 1995
(Owner)
_________________________________
By:______________________________
Title:____________________________
TIFFANY AND COMPANY
(Lessee)
_________________________________
By:______________________________
Title:_____________________________
COUNTERPART NO.____ OF ____ SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS.
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<PAGE>
Schedule I
List of Listed Permits
1) Foundation Permit
2) Building Permit
-71-
<PAGE>
CREDIT AGREEMENT
by and among
TIFFANY & CO.,
TIFFANY AND COMPANY,
TIFFANY & CO. INTERNATIONAL,
THE SUBSIDIARY BORROWERS PARTY HERETO,
THE LENDERS PARTY HERETO,
THE BANK OF NEW YORK,
as Issuing Bank and as Swing Line Lender,
THE BANK OF NEW YORK,
as Arranging Agent,
and
THE BANK OF NEW YORK,
as Administrative Agent
$130,000,000
Dated as of June 26, 1995<PAGE>
Credit Agreement, dated as of June 26, 1995, by and among
Tiffany & Co., a Delaware corporation (the "Parent"), Tiffany and
Company, a New York corporation ("Tiffany"), Tiffany & Co.
International, a Delaware corporation ("Tiffany International"),
each Subsidiary Borrower which is a signatory hereto or becomes a
party hereto pursuant to the provisions of Section 2.23, the
Lenders party hereto, The Bank of New York ("BNY"), as Issuing
Bank and as Swing Line Lender, BNY, as Arranging Agent (in such
capacity, the "Arranging Agent") and BNY, as Administrative Agent
(in such capacity, the "Administrative Agent").
I. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
A. Definitions
When used herein, each of the following terms shall
have the meaning ascribed thereto unless the context hereof
otherwise specifically requires:
"ABR Advances": the Loans (or any portions thereof) at
such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Alternate Base
Rate; each an "ABR Advance".
"Accountants": Coopers & Lybrand, or such other firm of
independent certified public accountants of recognized national
standing as shall be selected by the Parent and reasonably sat-
isfactory to the Administrative Agent.
"Accumulated Funding Deficiency": as defined in Section
302 of ERISA.
"Acquisition": with respect to any Person, the purchase
or other acquisition by such Person, by any means whatsoever
(including by devise, bequest, gift, through a dividend or
otherwise), of (a) Stock of, or other equity securities of, any
other Person if, immediately thereafter, such other Person would
be either a consolidated subsidiary of such Person or otherwise
under the control of such Person, (b) any business, going concern
or division or segment thereof, or (c) the Property of any other
Person other than in the ordinary course of business, provided,
however, that no acquisition of substantially all of the assets,
or any division or segment, of such other Person shall be deemed
to be in the ordinary course of business.
"Advance": an ABR Advance, a Eurodollar Advance, a Core
Currency Euro Advance or a Swing Line Negotiated Rate Advance, as
the case may be.
"Adverse Tax Position": as defined in Section 2.13(g).
"Affiliate": with respect to any Person at any time and
from time to time, any other Person (other than a consolidated<PAGE>
subsidiary of such Person) which, at such time (a) controls such
Person, or (b) is under common control with such Person. The
term "control", as used in this definition with respect to any
Person, means the power, whether direct, or indirect through one
or more intermediaries, to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities or other interests, by contract or
otherwise.
"Aggregate Commitments": on any date, the sum of all
Commitments on such date.
"Aggregate Credit Exposure": as of any date of de-
termination, the sum of (i) the outstanding principal amount
(determined on the basis of the Dollar Equivalent for each
outstanding Alternate Currency Loan) of the Loans of all Lenders
plus (ii) an amount equal to the Letter of Credit Exposure.
"Agreement": this Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest
per annum equal to the higher of (i) the Federal Funds Rate in
effect on such date plus 1/2 of 1% or (ii) the BNY Rate in effect
on such date.
"Alternate Currency": any Core Currency (other than
Dollars) or Non-Core Currency.
"Alternate Currency Bid Loan": each Bid Loan denomi-
nated in an Alternate Currency.
"Alternate Currency Equivalent": with respect to any
Alternate Currency, on any date of determination thereof, the
amount of such Alternate Currency which could be purchased with
the amount of Dollars involved in such computation at the spot
rate at which such Alternate Currency may be exchanged into
Dollars as set forth on such date on (i) Reuters pages MGTY,
MGTX, SCNY or BNMX or (ii) Dow Jones Telerate pages 262, 264,
265, 266 or 9993 (or any successor pages) or, if such rate does
not appear on such pages, at the spot exchange rate therefor as
determined by the Administrative Agent as of 11:00 A.M. (London
time) on such date of determination thereof for delivery (x) in
the case of an exchange of Canadian Dollars into Dollars, one
Business Day later and (y) in all other cases, two Business Days
later. In the event that, on any date of determination, a spot
rate for an individual Alternate Currency appears on both a page
of Reuters set forth above and a page of Dow Jones Telerate set
forth above, the Alternate Currency Equivalent of such Alternate
Currency shall be the arithmetic mean of such spot rates.
"Alternate Currency Loan": any Alternate Currency
Revolving Loan, Alternate Currency Bid Loan, Alternate Currency
Negotiated Rate Loan, Alternate Currency Swing Line Loan or<PAGE>
Individual Currency Loan.
"Alternate Currency Negotiated Rate Loan": each
Negotiated Rate Loan denominated in an Alternate Currency.
"Alternate Currency Revolving Loan": each Revolving
Loan denominated in a Core Currency (other than Dollars).
"Alternate Currency Swing Line Loan": each Swing Line
Loan denominated in a Core Currency (other than Dollars).
"Applicable": with respect to Regulation D being
applicable to any determination of a Core Currency Euro Rate or
an Individual Currency Rate, that Regulation D reserves would be
applicable to the Core Currency Euro Advance or the Individual
Currency Loan, as the case may be, as to which such interest rate
would apply (including by giving effect to the assumption that
the applicable Lender had funded such Core Currency Euro Advance
or such Individual Currency Loan, as the case may be, through the
purchase of a Core Currency or a Non-Core Currency, as the case
may be, deposit by a subsidiary or affiliate of such Lender in
the London interbank market and the transfer thereof to such
Lender from such subsidiary or affiliate).
"Applicable Currency":
(a) With respect to any Revolving Loan or Swing Line
Loan for any applicable Borrower, Dollars and each Available
Alternate Currency which is a Core Currency as follows:
(i) in the case of Dollars: a Domestic Borrower,
(ii) in the case of French Francs: the French
Borrower,
(iii) in the case of German Marks: the German
Borrower,
(iv) in the case of Japanese Yen: the Japanese
Borrower, and
(v) in the case of Sterling Pounds: the Sterling
Borrower.
(b) With respect to any Bid Loan, the Currency
specified by the applicable Borrower in its Bid Request for
such Bid Loan.
(c) With respect to any Negotiated Rate Loan, the
Currency specified in the Negotiated Rate Confirmation for
such Negotiated Rate Loan.
(d) With respect to any Individual Currency Loan
for any applicable Borrower, each Available Alternate<PAGE>
Currency which is a Non-Core Currency as follows:
(i) in the case of Australian Dollars: the
Australian Borrower,
(ii) in the case of Canadian Dollars: the
Canadian Borrower,
(iii) in the case of Hong Kong Dollars,
the Hong Kong Borrower,
(iv) in the case of Italian Lira: the Italian
Borrower,
(v) in the case of Korean Won: the Korean
Borrower,
(vi) in the case of Malaysian Ringgit: the
Malaysian Borrower,
(vii) in the case of Mexican Pesos: the
Mexican Borrower,
(viii) in the case of Philippine Pesos:
the Philippine Borrower,
(ix) in the case of Singaporean Dollars: the
Singaporean Borrower,
(x) in the case of Swiss Francs: the Swiss
Borrower,
(xi) in the case of New Taiwan Dollars: the
Taiwanese Borrower, and
(xii) in the case of Thai Baht: the Thai
Borrower.
"Applicable Lending Office": (i) as to any Lender,
with respect to Revolving Loans in any Core Currency, ini-
tially, the office, branch or affiliate of such Lender desig-
nated as such Lender's lending office for Revolving Loans in
such Core Currency on Exhibit R, and thereafter, such other
office, branch or affiliate of such Lender through which it
shall be making or maintaining Revolving Loans in such Core
Currency, as reported by such Lender to the Administrative
Agent and the Parent, (ii) as to the Swing Line Lender, with
respect to Swing Line Loans in any Core Currency, initially,
the office, branch or affiliate of such Lender designated as
the Swing Line Lender's lending office for such Swing Line
Loans in such Core Currency on Exhibit R, and thereafter,
such other office, branch or affiliate of the Swing Line
Lender through which it shall be making or maintaining Swing
Line Loans in such Core Currency, as reported by the Swing<PAGE>
Line Lender to the Administrative Agent and the Parent, (iii)
as to any Lender, with respect to any Bid Loan, the lending
office, branch or affiliate of such Lender designated as such
Lender's lending office for such Bid Loan in its Bid for such
Bid Loan, (iv) as to any Lender, with respect to Individual
Currency Loans in any Non-Core Currency, initially, the
office, branch or affiliate of such Lender designated as such
Lender's lending office for such Individual Currency Loans in
such Non-Core Currency on Exhibit R, and thereafter, such
other office, branch or affiliate of such Lender through
which it shall be making or maintaining Individual Currency
Loans in such Non-Core Currency, as reported by such Lender
to the Administrative Agent and the Parent, and (v) as to any
Lender, with respect to any Negotiated Rate Loan, the lending
office, branch or affiliate of such Lender designated as such
Lender's lending office for such Negotiated Loan in the
Negotiated Rate Confirmation for such Negotiated Rate Loan.
"Applicable Margin": (i) with respect to the unpaid
principal amount of ABR Advances, the applicable percentage
set forth below in the column entitled "Applicable Margin for
ABR Advances" and (ii) with respect to the unpaid principal
amount of Eurodollar Advances, Core Currency Euro Advances
and Individual Currency Loans, the applicable percentage set
forth below in the column entitled "Applicable Margin for
Eurodollar/Core Currency Euro Advances/Individual Currency
Loans":
<TABLE>
<CAPTION>
Applicable
Margin for
Eurodollar
Advances/Core
Applicable Currency Euro
Margin for Advances/
ABR Individual Currency
Pricing Level Advances Loans
----------------- -------------- --------------------
<S> <C> <C>
Pricing Level I 0% 0.2000%
Pricing Level II 0% 0.2700%
Pricing Level III 0% 0.2750%
Pricing Level IV 0% 0.4000%
Pricing Level V 0% 0.4000%
</TABLE>
"Applicable Payment Office": in the case of:
(i) the Administrative Agent, (x) in respect of
all Loans (other than Alternate Currency
Loans), Letters of Credit designated in
Dollars, fees and other amounts owing under<PAGE>
this Agreement, the office of the Admin-
istrative Agent listed in Exhibit Q as its
"Domestic Payment Office", and (y) in respect
of Alternate Currency Loans and Letters of
Credit designated in Alternate Currencies, the
office of the Administrative Agent listed in
Exhibit Q as its payment office for the
applicable Alternate Currency, or such other
office or offices as the Administrative Agent
may from time to time hereafter designate in
writing as such to the Parent, each Lender and
each Borrower;
(ii) the Swing Line Lender, in respect of each
Swing Line Loan, the office of the Swing Line
Lender listed in Exhibit R as the payment of-
fice for the applicable Core Currency in which
such Swing Line Loan is made or such other of-
fice or offices as the Swing Line Lender may
from time to time hereafter designate in writ-
ing as such to the Administrative Agent, the
Parent and each Swing Line Borrower;
(iii) any other Lender, (w) in respect of each Re-
volving Loan, the office of such Lender listed
in Exhibit R as its payment office for the ap-
plicable Core Currency or such other office or
offices as such Lender may from time to time
hereafter designate in writing as such to the
Administrative Agent, the Parent and each Bor-
rower, (x) in respect of each Individual Cur-
rency Loan, the office of such Lender listed
in Exhibit R as its payment office for the ap-
plicable Non-Core Currency or such other
office or offices as such Lender may from time
to time hereafter designate in writing as such
to the Administrative Agent, the Parent and
each Borrower, (y) in respect of each Bid
Loan, the office of such Lender listed in such
Lender's Bid for such Bid Loan, and (z) in
respect of each Negotiated Rate Loan, the
office of such Lender listed in the Negotiated
Rate Confirmation for such Negotiated Rate
Loan; and
(iv) the Issuing Bank, in respect of each Letter of
Credit, the office of the Issuing Bank listed
in Exhibit R as the payment office for the ap-
plicable Currency in which such Letter of
Credit is issued or such other office or of-
fices as the Issuing Bank may from time to
time hereafter designate in writing as such to
the Administrative Agent and the Parent.<PAGE>
"Assignment and Acceptance Agreement": an assign-
ment and acceptance agreement executed by an assignor and an
assignee pursuant to which the assignor assigns to the as-
signee all or any portion of such assignor's Loans,
Commitment, Individual Currency Commitments and other rights
and obligations under the Loan Documents, substantially in
the form of Exhibit D.
"Assignment Fee": as defined in Section 11.7(b).
"Australian Borrower": one or more of the
following: Tiffany, Tiffany International or a wholly-owned
Subsidiary of the Parent which is organized under the laws
of, and has its principal office in, Australia and which
shall become a Borrower pursuant to Section 2.23 hereof.
"Australian Dollars": freely transferable lawful
money of Australia.
"Availability Percentage": with respect to any
Lender at any time, a percentage equal to a fraction (x) the
numerator of which is
(A) the Commitment of such Lender, minus
(B) the sum of (I) the aggregate principal amount
of all Revolving Loans then outstanding from such Lender
(determined on the basis of the Dollar Equivalent for
each outstanding Alternate Currency Revolving Loan),
plus (II) the aggregate principal amount of all Indi-
vidual Currency Loans then outstanding from such Lender
(determined on the basis of the Dollar Equivalent of
each such Individual Currency Loan), plus (III) the
SL/LC Credit Exposure of such Lender, and
(y) the denominator of which is
(A) the Aggregate Commitments, minus
(B) the sum of (I) the outstanding principal
balance of all Revolving Loans (determined on the basis
of the Dollar Equivalent for each outstanding Alternate
Currency Revolving Loan), plus (II) the outstanding
principal balance of all Individual Currency Loans
(determined on the basis of the Dollar Equivalent of
each such Individual Currency Loan), plus (III) the
outstanding principal balance of all Swing Line Loans,
plus (IV) the Letter of Credit Exposure.
"Available Alternate Currency": each Alternate Cur-
rency except to the extent that the Administrative Agent has
given notice to the Parent pursuant to Section 2.14(a) (which
notice has not been rescinded by the Administrative Agent)
that one or more Alternate Currencies are no longer available<PAGE>
as determined by it in its sole discretion.
"Benefited Lender": as defined in Section 11.9.
"Bid": an offer by a Lender to a Borrower, in the
form of Exhibit H, to make a Bid Loan.
"Bid Accept/Reject Letter": a notification made by
the applicable Borrower pursuant to Section 2.11 in the form
of Exhibit I.
"Bid Interest Period": as to any Bid Loan, the pe-
riod commencing on the date of such Bid Loan, and ending on
the date requested in the Bid Request with respect to such
Bid Loan, which shall not be earlier than 7 days after the
date of such Bid Loan or later than 180 days after the date
of such Bid Loan; provided, however, that (i) if any Bid
Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day, unless such next succeeding Business Day would
be a date on or after the Maturity Date in which case such
Interest Period shall end on the next preceding Business Day
and (ii) no Borrower shall select a Bid Interest Period which
shall end after the Maturity Date.
"Bid Loan": each loan from a Lender to a Borrower
pursuant to Section 2.11.
"Bid Loan Confirmation": a confirmation by the Ad-
ministrative Agent to a Lender of the acceptance by the ap-
plicable Borrower of any Bid (or Portion thereof) made by
such Lender, substantially in the form of Exhibit J.
"Bid Rate": as defined in Section 2.11(b).
"Bid Request": a request by a Borrower, in the form
of Exhibit F, for Bids.
"Bid Submission Deadline": as defined in Section
2.11(b).
"BNY Rate": a rate of interest per annum equal to
the rate of interest publicly announced in New York City by
BNY from time to time as its prime commercial lending rate,
such rate to be adjusted automatically (without notice) on
the effective date of any change in such publicly announced
rate.
"Borrower Addendum": an Addendum to this Agreement
in the form of Exhibit B pursuant to which a Subsidiary of
the Parent may become a Subsidiary Borrower pursuant to the
provisions of Section 2.23.
"Borrowers": collectively, Tiffany, Tiffany Inter-<PAGE>
national and the Subsidiary Borrowers; each a "Borrower".
"Borrowing Date": (i) in respect of Revolving
Loans, any Business Day on which the Lenders shall make
Revolving Loans to a Borrower pursuant to a Notice of
Borrowing or pursuant to a Mandatory Borrowing, (ii) in
respect of Bid Loans, any Business Day on which a Lender
shall make a Bid Loan to a Borrower pursuant to a Bid
Request, (iii) in respect of Swing Line Loans, any Business
Day on which the Swing Line Lender shall make a Swing Line
Loan to a Swing Line Borrower pursuant to a Notice of
Borrowing, (iv) in respect of Negotiated Rate Loans, any
Business Day on which a Lender shall make a Negotiated Rate
Loan to a Borrower pursuant to a Negotiated Rate
Confirmation, (v) in respect of Individual Currency Loans,
any Business Day on which a Lender shall make an Individual
Currency Loan to a Borrower pursuant to a Notice of Borrow-
ing, and (vi) in respect of Letters of Credit, any Business
Day on which the Issuing Bank issues a Letter of Credit to a
Letter of Credit Applicant pursuant to a Letter of Credit
Request.
"Borrowing/Issuance Period": as defined in Section
2.7(b)(ii).
"Business Day":
(i) for all purposes (other than as covered by
clauses (ii) and (iii) below), any day except Saturday,
Sunday or a day which in New York City is a legal holiday or
a day on which banking institutions are authorized or
required by law or other government action to close,
(ii) with respect to all notices and determinations
in connection with, and payments of principal and interest
on, a Eurodollar Advance, a Core Currency Euro Advance or an
Alternate Currency Swing Line Loan, any day which is a
Business Day described in clause (i) above, is a day for
trading by and between banks in the London interbank market
and which is not a legal holiday or a day on which banking
institutions are authorized or required by law or other
government action to close in the country in which the
principal office of the applicable Borrower is located, and
(iii) with respect to all notices and
determinations in connection with, and payments of principal
and interest on, an Alternate Currency Bid Loan, an Alternate
Currency Negotiated Rate Loan, an Individual Currency Loan or
a Letter of Credit designated in an Alternate Currency, any
day which is a Business Day described in clause (i) above, is
a day for trading by and between banks in the London
interbank market and which is not a legal holiday or a day on
which banking institutions are authorized or required by law
or other government action to close in the country in which<PAGE>
(x) the principal office of the applicable Borrower is
located and (y) the Applicable Lending Office and Applicable
Payment Office of the applicable Lender is located.
"Canadian Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Canada and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Canadian Dollars": freely transferable lawful
money of Canada.
"Change of Control": (i) any "Person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended from time to
time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect) is or
shall become the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 thereunder), directly or indirectly, of
more than 50%, on a fully diluted basis, of the voting and
economic interests of the Parent, or (ii) the Board of
Directors of the Parent shall cease to consist of a majority
of Continuing Directors.
"Code": the Internal Revenue Code of 1986, as the
same may be amended from time to time, or any successor
thereto, and the rules and regulations issued thereunder, as
from time to time in effect.
"Commitment": with respect to each Lender, the
amount set forth opposite such Lender's name in Exhibit A-1
directly below the column entitled "Commitment", as the same
may be (x) reduced from time to time pursuant to Section 2.9
or (y) adjusted from time to time as a result of assignments
to or from such Lender pursuant to Section 11.7 or increases
pursuant to Section 11.1.
"Commitment Percentage": as to any Lender, the per-
centage set forth opposite the name of such Lender in
Exhibit A-1 under the heading "Commitment Percentage", as
such percentage may be (x) reduced from time to time pursuant
to Section 2.9 or (y) adjusted from time to time as a result
of assignments to or from such Lender of its Commitment
pursuant to Section 11.7 or increases in the Aggregate
Commitments pursuant to Section 11.1.
"Commitment Period": the period from the Effective
Date until the Expiration Date.
"Compliance Certificate": a certificate in the form
of Exhibit M.
"Consolidated": the Parent and its Subsidiaries on<PAGE>
a consolidated basis in accordance with GAAP.
"Consolidated Capitalization": as of any date,
total stockholder's equity of the Parent and its Subsidiaries
on a Consolidated basis on such date (without giving effect
to foreign currency translation adjustments, except to the
extent such adjustments are in excess of $10,000,000 (whether
positive or negative)) plus Total Debt on such date.
"Contingent Obligation": as to any Person (the
"secondary obligor"), any obligation of such secondary
obligor (a) guaranteeing or in effect guaranteeing any return
on any Investment made by another Person, or (b) guaranteeing
or in effect guaranteeing any Indebtedness, lease, dividend
or other obligation ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of such
secondary obligor, whether contingent, (i) to purchase any
such primary obligation or any Property constituting direct
or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary
obligation or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the
purpose of assuring the beneficiary of any such primary
obligation of the ability of the primary obligor to make pay-
ment of such primary obligation, (iv) otherwise to assure or
hold harmless the beneficiary of such primary obligation
against loss in respect thereof, and (v) in respect of the
Indebtedness of any partnership in which such secondary obli-
gor is a general partner, except to the extent that such In-
debtedness of such partnership is nonrecourse to such second-
ary obligor and its separate Property; provided, however,
that the term "Contingent Obligation" shall not include (i)
the indorsement of instruments for deposit or collection in
the ordinary course of business and (ii) guaranties by the
Parent or any Subsidiary of the Parent of the primary
obligations of any other Subsidiary of the Parent incurred in
the ordinary course of business of such other Subsidiary; and
provided, further, that the amount of any such Contingent
Obligation shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of such primary
obligation and (b) the maximum amount for which such
secondary obligor may be liable pursuant to the terms of the
agreement embodying such Contingent Obligation unless such
primary obligation and the maximum amount for which such sec-
ondary obligor may be liable are not stated or determinable,
in which case the amount of such Contingent Obligation shall
be such secondary obligor's maximum reasonably anticipated
liability in respect thereof as determined by such secondary
obligor in good faith.
"Continuing Directors": the directors of the<PAGE>
Parent on the Effective Date and each other director, if such
director's nomination for election to the Board of Directors
of the Parent is recommended by a majority of the then Con-
tinuing Directors.
"Conversion Date": the date on which (i) a Eurodol-
lar Advance is converted to an ABR Advance, (ii) the date on
which an ABR Advance is converted to a Eurodollar Advance,
(iii) the date on which a Eurodollar Advance is converted to
a new Eurodollar Advance and (iv) the date on which a Core
Currency Euro Advance is converted to a new Core Currency
Euro Advance.
"Core Currencies": Dollars, French Francs, German
Marks, Japanese Yen and Sterling Pounds (each, a "Core Cur-
rency"), and such other currencies as shall be requested by
the Parent to be a Core Currency hereunder subject to the
approval of all of the Lenders in their sole and absolute
discretion.
"Core Currency Borrowers": with respect to
Revolving Loans, the Domestic Borrowers, the German Borrower,
the French Borrower, the Japanese Borrower and the Sterling
Borrower; each a "Core Currency Borrower".
"Core Currency Euro Advances": collectively, the
Revolving Loans (or any portions thereof) at such time as
they (or such portions) are maintained and/or being
maintained in a Core Currency (other than Dollars) at a rate
of interest based upon a Core Currency Euro Rate; each a
"Core Currency Euro Advance".
"Core Currency Euro Rate": with respect to each day
during each Interest Period applicable to any Core Currency
Euro Advance, a rate of interest per annum determined by di-
viding (and then rounding to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, then to the next higher 1/16
of 1%):
(a) (i) the rate per annum that appears on
page 3740 or 3750 of the Dow Jones Telerate Screen (or any
successor page) for deposits of the applicable Core Currency
with a maturity comparable to such Interest Period,
determined as of 11:00 A.M. (London time) (x) on the date
which is two Business Days prior to the commencement of such
Interest Period, in the case of a Core Currency (other than
Sterling Pounds) and (y) on the date of the commencement of
such Interest Period, in the case of Sterling Pounds or, if
such rate does not appear on page 3740 or 3750 of the Dow
Jones Telerate Screen (or any successor page) or (ii) the
rate per annum equal to the offered quotation notified to the
Administrative Agent by the Reference Lender as the offered
quotation by first class banks in the London interbank market
to the Reference Lender for such Core Currency deposits of<PAGE>
amounts in immediately available funds comparable to the
principal amount of such Core Currency Euro Advance of the
Reference Lender with a maturity comparable to such Interest
Period determined as of 11:00 A.M. (London time) (x) on the
date which is two Business Days prior to the commencement of
such Interest Period, in the case of a Core Currency (other
than Sterling Pounds) and (y) on the date of the commencement
of such Interest Period, in the case of Sterling Pounds, by
(b) a number equal to 1.00 minus the
aggregate of the stated maximum rates in effect on such day
(without duplication) of all reserve requirements (including
marginal, emergency, supplemental and special reserves) and
similar charges, expressed as a decimal, established by any
Governmental Authority, including those established by the
Board of Governors of the Federal Reserve System and any
other banking authority to which BNY and other major United
States money center banks are subject in respect of
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board of Governors of the
Federal Reserve System) maintained by a member of the Federal
Reserve System with deposits exceeding $1 billion in respect
of eurodollar currency funding liabilities, to the extent Ap-
plicable;
provided, in the event that the Administrative Agent has made
any determination pursuant to Section 2.14(a)(i) in respect
of such Core Currency Euro Advance, the Core Currency Euro
Rate determined pursuant to clause (a) of this definition
shall instead be the rate reported to the Administrative
Agent by the Reference Lender as the rate based on the all-in
cost of funds of the Reference Lender to fund such Core Cur-
rency Euro Advance with a maturity comparable to such In-
terest Period.
"Credit Exposure": with respect to any Lender at
any time, the sum of (i) the outstanding principal balance of
all Loans (other than Swing Line Loans) then outstanding from
such Lender (determined on the basis of the Dollar Equivalent
for each outstanding Alternate Currency Loan), plus (ii) the
SL/LC Credit Exposure of such Lender at such time.
"Credit Party": with respect to any Loan Document,
any Person (other than the Administrative Agent, the Issuing
Bank, the Swing Line Lender or any Lender) which, in ac-
cordance with the terms of such Loan Document, is or is to be
a party thereto.
"Currency": any Core Currency or Non-Core Currency.
"Default": any of the events specified in Section
9.1, whether or not any requirement for the giving of notice,
the lapse of time, or any other condition, has been
satisfied.<PAGE>
"Disposition": with respect to any Person, any
sale, assignment, transfer or other disposition by such
Person, by any means, of
(a) the Stock of, or other equity interests of, any
other Person,
(b) any business, operating entity, division or segment
thereof, or
(c) any other Property of such Person, other than sales
of inventory (other than in connection with bulk
transfers).
"Dollar Bid Loan": a Bid Loan denominated in Dol-
lars.
"Dollar Equivalent": on any date of determination
thereof, the amount of Dollars which could be purchased with
the amount of the relevant Alternate Currency involved in
such computation at the spot rate at which Dollars may be
exchanged into such Alternate Currency as set forth on such
date on (i) Reuters pages MGTY, MGTX, SCNY or BNMX or (ii)
Dow Jones Telerate pages 262, 264, 265, 266 or 9993 (or any
successor pages) or, if such rate does not appear on such
pages, at the spot exchange rate therefor as determined by
the Administrative Agent as of 11:00 A.M. (London time) on
such date of determination thereof for delivery (x) in the
case of an exchange of Dollars into Canadian Dollars, one
Business Day later and (y) in all other cases, two Business
Days later. In the event that, on any date of determination,
a spot rate for an individual Alternate Currency appears on
both a page of Reuters set forth above and a page of Dow
Jones Telerate set forth above, the Dollar Equivalent of such
Alternate Currency shall be the arithmetic mean of such spot
rates.
"Dollar Loan": each Dollar Revolving Loan, Dollar
Bid Loan, Dollar Negotiated Rate Loan and Dollar Swing Line
Loan.
"Dollar Negotiated Rate Loan": a Negotiated Rate
Loan denominated in Dollars.
"Dollar Reimbursement Amount": as defined in
Section 2.19(d).
"Dollar Revolving Loan" and "Dollar Revolving
Loans": as defined in Section 2.1(b).
"Dollar Swing Line Loan" and "Dollar Swing Line
Loans": as defined in Section 2.1(c).
"Dollars": and "$": freely transferable lawful<PAGE>
money of the United States.
"Domestic Borrowers": Tiffany, Tiffany Interna-
tional and each other Borrower which is a corporation orga-
nized under the laws of the United States or any State
thereof and which has its principal place of business in the
United States; each a "Domestic Borrower".
"EBIT": for any period, the net income of the
Parent and its Subsidiaries on a Consolidated basis for such
period plus each of the following with respect to the Parent
and its Subsidiaries on a Consolidated basis to the extent
utilized in determining such net income: (a) Interest Expense
and (b) provision for taxes.
"Effective Date": June 30, 1995.
"Employee Benefit Plan": an employee benefit plan
within the meaning of Section 3(3) of ERISA maintained, spon-
sored or contributed to by the Parent, any of its Subsidiar-
ies or any ERISA Affiliate.
"ERISA": the Employee Retirement Income Security
Act of 1974, as amended from time to time, or any successor
thereto, and the rules and regulations issued thereunder, as
from time to time in effect.
"ERISA Affiliate": when used with respect to an Em-
ployee Benefit Plan, ERISA, the PBGC or a provision of the
Code pertaining to employee benefit plans, any Person that is
a member of any group of organizations within the meaning of
Sections 414(b) or (c) of the Code or, solely with respect to
applicable provisions of the Code, Sections 414(m) or (o) of
the Code, of which the Parent or any of its Subsidiaries is a
member.
"Euro Interest Period": with respect to any
Eurodollar Advance or Core Currency Euro Advance requested by
any Borrower, the period commencing on, as the case may be,
the Borrowing Date or Conversion Date with respect to such
Advance and ending one, two, three or six months thereafter,
as selected by such Borrower in its irrevocable Notice of
Borrowing or its irrevocable Notice of Conversion, provided,
however, that (i) if any Euro Interest Period would otherwise
end on a day which is not a Business Day, such Euro Interest
Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such
Euro Interest Period into another calendar month, in which
event such Euro Interest Period shall end on the immediately
preceding Business Day, (ii) any Euro 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 Euro Interest Period)
shall end on the last Business Day of a calendar month, and<PAGE>
(iii) no Borrower shall select a Euro Interest Period which
shall end after the Maturity Date.
"Eurodollar Advances": collectively, the Revolving
Loans (or any portions thereof) at such time as they (or such
portions) are made and/or being maintained at a rate of
interest based upon a Eurodollar Rate; each a "Eurodollar
Advance".
"Eurodollar Rate": with respect to each day during
each Interest Period applicable to any Eurodollar Advance, a
rate of interest per annum determined by dividing (and then
rounding to the nearest 1/16 of 1% or, if there is no nearest
1/16 of 1%, then to the next higher 1/16 of 1%):
(a) the rate per annum equal to the rate
notified to the Administrative Agent by the Reference Lender
as the rate at which the Reference Lender is offered Dollar
deposits in the New York interbank market, for delivery on
the first day of such Interest Period, in an amount equal ap-
proximately to such Eurodollar Advance for a period equal to
such Interest Period, as quoted at approximately 11:00 A.M.
two Business Days prior to the first day of such Interest Pe-
riod, by
(b) a number equal to 1.00 minus the
aggregate of the stated maximum rates in effect on such day
(without duplication) of all reserve requirements (including
marginal, emergency, supplemental and special reserves), ex-
pressed as a decimal, established by the Board of Governors
of the Federal Reserve System and any other banking authority
to which BNY and other major United States money center banks
are subject, in respect of eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System)
maintained by a member of the Federal Reserve System with
deposits exceeding $1 billion in respect of eurodollar cur-
rency funding liabilities.
"Event of Default": any of the events specified in
Section 9.1, provided that any requirement for the giving of
notice, the lapse of time, or any other condition has been
satisfied.
"Excess Tax": as defined in Section 2.13(g).
"Expiration Date": the Business Day immediately
preceding the Maturity Date.
"Facility Fee": as defined in Section 3.1.
"Federal Funds Rate": for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to
the next higher 1/100 of 1%), equal to the weighted average<PAGE>
of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding
such day, provided that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so
published for any day which is a Business Day, the Federal
Funds Rate for such day shall be the average of the three
rates quoted by federal funds brokers to BNY on such day on
such transactions received by BNY as determined by BNY and
reported to the Administrative Agent.
"Financial Officer": the chief financial officer,
the treasurer or the assistant treasurer of the Parent or
such other officer thereof as shall be reasonably satis-
factory to the Administrative Agent.
"Financial Statements": as defined in Section 4.15.
"Fixed Rate Loan": a Eurodollar Advance, a Core
Currency Euro Advance, a Swing Line Negotiated Rate Advance,
a Negotiated Rate Loan, an Individual Currency Loan or a Bid
Loan.
"Foreign Pension Plan": any plan, fund (including
any superannuation fund) or other similar program established
or maintained outside of the United States by the Parent or
any one or more of its Subsidiaries primarily for the benefit
of employees of the Parent or such Subsidiaries residing out-
side of the United States, which plan, fund or other similar
program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments
to be made upon termination of employment, and which plan is
not subject to ERISA or the Code.
"French Borrower": one or more of the following:
Tiffany, Tiffany International or Societe Francaise Pour Le
Developpement De La Porcelaine D'Art (S.A.R.L.), a corpora-
tion organized under the laws of France and whose principal
office is located in France.
"French Francs": freely transferable lawful money
of France.
"Funded Current Liability Percentage": as defined
in Section 401(a)(29) of the Code.
"GAAP": generally accepted accounting principles
set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified Public Accountants and in the statements and<PAGE>
pronouncements of the Financial Accounting Standards Board or
in such other statement by such other entity as may be
approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of
the date of determination. If at any time after the
Effective Date any change in GAAP would affect the
computation of any financial ratio or requirement set forth
in any Loan Document, and either the Required Lenders, the
Parent or the appropriate Borrowers shall so request, the
Administrative Agent, the Lenders, the Parent and such
Borrowers shall negotiate in good faith to amend such ratio
or requirement to reflect such change in GAAP (subject to the
approval of the Required Lenders), provided that, until so
amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein
and (ii) the Parent and such Borrowers shall provide to the
Administrative Agent and the Lenders financial statements and
other documents required under the Loan Documents or as rea-
sonably requested thereunder setting forth a reconciliation
between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.
"German Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Germany and which shall become a
Borrower pursuant to Section 2.23 hereof.
"German Marks": freely transferable lawful money of
Germany.
"Governmental Authority": any foreign, federal,
state, municipal or other government, or any department, com-
mission, board, bureau, agency, public authority, instrumen-
tality or other political subdivision thereof, any central
bank, or any court or arbitrator.
"Guaranty": as defined in Section 5.2.
"Hong Kong Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co. of New York
Limited, a corporation organized under the laws of Hong Kong
and whose principal office is located in Hong Kong.
"Hong Kong Dollars": freely transferable lawful
money of Hong Kong.
"Indebtedness": as to any Person, at a particular
time, all items of such Person which constitute, without du-
plication, (a) indebtedness for borrowed money or the
deferred purchase price of Property (other than trade
payables and accrued expenses incurred in the ordinary course
of business), (b) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (c) obligations with<PAGE>
respect to any conditional sale or other title retention
agreement, (d) indebtedness arising under acceptance facili-
ties and the amount available to be drawn under all letters
of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent such
Person shall not have reimbursed the issuer in respect of the
issuer's payment of such drafts, (e) liabilities secured by
any Lien on any Property owned by such Person even though
such Person shall not have assumed or otherwise become liable
for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like
non-consensual Liens arising in the ordinary course of busi-
ness), (f) that portion of any obligation of such Person, as
lessee, which in accordance with GAAP is required to be
capitalized on the balance sheet of such Person, and (g) Con-
tingent Obligations.
"Indemnified Person": as defined in Section 11.10.
"Indemnified Tax": as to any Person, any Tax,
except (i) a Tax on the Income imposed on such Person and
(ii) any interest, fees or penalties for late payment imposed
on such Person, in each case under clauses (i) and (ii) to
the extent not attributable to the failure of the Parent or
any of its Subsidiaries to obtain any necessary approvals or
consents of, or file or cause to be filed any reports,
applications, documents, instruments or information required
to be filed pursuant to any applicable law, rule, regulation
or request of, any Governmental Authority.
"Indemnified Tax Person": the Administrative
Agent, the Swing Line Lender, the Issuing Bank, or any
Lender.
"Individual Currency Commitment": with respect to
each Lender and any Non-Core Currency, the amount set forth
opposite such Lender's name in Exhibit A-2 directly below the
column entitled "Individual Currency Commitment" in respect
of such Non-Core Currency (determined on the basis of the
Dollar Equivalent for such Non-Core Currency), as the same
may be (x) reduced from time to time pursuant to Section 2.9
or (y) adjusted from time to time as a result of assignments
to or from such Lender pursuant to Section 11.7, provided,
however, that the aggregate amount of all of the Individual
Currency Commitments of each Lender (determined on the basis
of the Dollar Equivalent for each applicable Non-Core
Currency) shall not exceed the amount of such Lender's
Commitment.
"Individual Currency Interest Period": with respect
to any Individual Currency Loan requested by any Non-Core
Currency Borrower, the period commencing on the Borrowing
Date with respect to such Individual Currency Loan and ending
one, two or three months thereafter, as selected by such Non-<PAGE>
Core Currency Borrower in its irrevocable Notice of Bor-
rowing, provided, however, that (i) if any Individual
Currency Interest Period would otherwise end on a day which
is not a Business Day, such Individual Currency Interest Pe-
riod shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such
Individual Currency Interest Period into another calendar
month, in which event such Individual Currency Interest
Period shall end on the immediately preceding Business Day,
(ii) any Individual Currency 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 Individual Currency
Interest Period) shall end on the last Business Day of a cal-
endar month, and (iii) no Borrower shall select an Individual
Currency Interest Period which shall end after the Maturity
Date.
"Individual Currency Loan" and "Individual Currency
Loans": as defined in Section 2.1(e).
"Individual Currency Rate": with respect to each
day during each Interest Period applicable to any Individual
Currency Loan, a rate of interest per annum determined by di-
viding (and then rounding to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, then to the next higher 1/16
of 1%):
(a) (i) if such Individual Currency Loan is
designated in Australian Dollars, Canadian Dollars, Hong Kong
Dollars, Italian Lira, Singaporean Dollars or Swiss Francs,
(A) with respect to Australian Dollars, the
average bid rate for bank bills of exchange that
appears on page BBSY on the Reuters Screen (Sydney)
(or any successor page) for a term equivalent to
such Interest Period, determined as of
approximately 10:15 A.M. (Sydney time) on the first
day of such Interest Period,
(B) with respect to Canadian Dollars, the
rate per annum that appears on page CDOR on the
Reuters Screen (Toronto) (or any successor page)
for deposits of Canadian Dollars with a maturity
comparable to such Interest Period, determined as
of approximately 11:00 A.M. (Toronto time) on the
date which is two Business Days prior to the
commencement of such Interest Period,
(C) with respect to Italian Lira, the rate
per annum that appears on page RIBO (London) on the
Reuters Screen (or any successor page) for deposits
of Italian Lira with a maturity comparable to such
Interest Period, determined as of approximately<PAGE>
11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such
Interest Period,
(D) with respect to Swiss Francs, the rate per
annum that appears on page 3740 or 3750 of the Dow
Jones Telerate Screen (or any successor page) for
deposits of Swiss Francs with a maturity comparable
to such Interest Period, determined as of
approximately 11:00 A.M. (London time) on the date
which is two Business Days prior to the commence-
ment of such Interest Period,
(E) with respect to Hong Kong Dollars, the
rate per annum that appears on page FWEN on the
Reuters Screen (Hong Kong) (or any successor page)
for deposits of Hong Kong Dollars with a maturity
comparable to such Interest Period, determined as
of approximately 11:00 A.M. (Hong Kong time) on the
date which is two Business Days prior to the
commencement of such Interest Period,
(F) with respect to Singaporean Dollars, the
rate per annum that appears on page FWEO of the
Reuters Screen (Singapore) (or any successor page)
for deposits of Singaporean Dollars with a maturity
comparable to such Interest Period, determined as
of approximately 11:00 A.M. (Singapore time), on
the date which is two Business Days prior to the
commencement of such Interest Period, or
(G) if such rate does not appear on such
applicable page of the Dow Jones Telerate Screen or
Reuters Screen (or any successor page), the rate
per annum equal to the offered quotation by first
class banks in the London, Australian, Canadian,
Hong Kong or Singapore, as the case may be, in-
terbank market to the applicable Lender for such
Non-Core Currency deposits of amounts in im-
mediately available funds comparable to the prin-
cipal amount of such Individual Currency Loan with
a maturity comparable to such Interest Period de-
termined as of approximately 11:00 A.M. (London,
Sydney, Toronto, Hong Kong or Singapore, as the
case may be, time) on the date which is two Busi-
ness Days prior to the commencement of such Inter-
est Period or, in the case of Individual Currency
Loans designated in Australian Dollars, on the
first day of such Interest Period,
(ii) if such Individual Currency Loan is designated in any
other Non-Core Currency, a rate per annum equal to the
offered quotation by first class banks in the applicable in-
terbank market to the applicable Lender for deposits of such<PAGE>
Non-Core Currency in amounts in immediately available funds
comparable to the principal amount of such Individual
Currency Loan with a maturity comparable to such Interest
Period as determined by such Lender on the date which is two
Business Days prior to the commencement of such Interest
Period, adjusted for additional costs and local market
conditions as determined by such Lender, by
(b) a number equal to 1.00 minus the aggregate
of the stated maximum rates in effect on such day (without
duplication) of all reserve requirements (including marginal,
emergency, supplemental and special reserves) and similar
charges, expressed as a decimal, established by any
Governmental Authority, including those established by the
Board of Governors of the Federal Reserve System and any
other banking authority to which BNY and other major United
States money center banks are subject in respect of
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board of Governors of the
Federal Reserve System) maintained by a member of the Federal
Reserve System with deposits exceeding $1 billion in respect
of eurodollar currency funding liabilities, to the extent Ap-
plicable;
provided, in the event that the applicable Lender has made
any determination pursuant to Section 2.14(a)(iv) in respect
of such Individual Currency Loan, the Individual Currency
Rate determined pursuant to clause (a) of this definition
shall instead be the rate based on the all-in cost of funds
of the applicable Lender to fund such Individual Currency
Loan with a maturity comparable to such Interest Period.
"Intellectual Property": all United States regis-
tered trademarks, service marks, patents, and trade names.
"Intercompany Acquisition": an Acquisition by the
Parent from any of its Subsidiaries or an Acquisition by any
Subsidiary of the Parent from any other Subsidiary of the
Parent.
"Intercompany Debt": (i) Indebtedness of the
Parent to one or more of the Subsidiaries of the Parent and
(ii) demand Indebtedness of one or more of the Subsidiaries
of the Parent to the Parent or any one or more of the other
Subsidiaries of the Parent.
"Intercompany Disposition": a Disposition by the
Parent or any of its Subsidiaries to the Parent or any of its
other Subsidiaries, provided that such Disposition does not
materially and adversely affect the interests of the Lenders
under the Loan Documents.
"Intercompany Lien": A Lien granted by the Parent
or any of its Subsidiaries to the Parent or any of its other<PAGE>
Subsidiaries, provided that such Lien does not materially and
adversely affect the interests of the Lenders under the Loan
Documents.
"Interest Coverage Ratio": as of any date, the ra-
tio of (a) EBIT in respect of the period comprised of the
four consecutive fiscal quarters ended immediately prior to
such date in respect of which financial statements have been
delivered pursuant to Sections 7.7(a), 7.7(c) or 7.7(d) to
(b) Interest Expense for such period.
"Interest Expense": for any period, the interest
expense of the Parent and its Subsidiaries on a Consolidated
basis in respect of such period.
"Interest Period": a Euro Interest Period, a Swing
Line Interest Period, a Negotiated Rate Interest Period, an
Individual Currency Interest Period or a Bid Interest Period,
as the case may be.
"Interest Rate Protection Arrangement": any
interest rate swap, cap or collar arrangement or any other
derivative product, in each case designed to reduce exposure
to interest rate fluctuations.
"Investments": as defined in Section 8.7.
"Invitation to Bid": an invitation to make Bids in
the form of Exhibit G.
"Issuing Bank": BNY.
"Italian Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany-Faraone S.P.A., a
corporation organized under the laws of Italy and whose
principal office is located in Italy.
"Italian Lira": freely transferable lawful money of
Italy.
"Japanese Borrower": one or more of the following:
Tiffany, Tiffany International, Tiffany Japan or a
wholly-owned Subsidiary of the Parent which is organized
under the laws of, and has its principal office in, Japan and
which shall become a Borrower pursuant to Section 2.23
hereof.
"Japanese Yen": freely transferable lawful money of
Japan.
"Judgment Currency": as defined in Section 11.14.
"Judgment Currency Conversion Date": as defined in
Section 11.14.<PAGE>
"Korean Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Korea and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Korean Won": freely transferable lawful money of
Korea.
"Lender": each financial institution listed on
Exhibit A-1, as well as any Person which becomes a "Lender"
hereunder pursuant to Sections 11.7 or 11.1; it being under-
stood and agreed, however, that for purposes of making
certain Alternate Currency Loans and issuing or participating
in certain Letters of Credit under this Agreement, certain of
the Lenders have specifically designated on Exhibit R certain
of their branches, subsidiaries or affiliates that will be
responsible for making such Alternate Currency Loans and
issuing or participating in such Letters of Credit, or may
make such a designation in an Assignment and Acceptance
Agreement entered into by any such Lender.
"Letter of Credit" and "Letters of Credit": as de-
fined in Section 2.19.
"Letter of Credit Applicants": collectively, Tif-
fany and Tiffany International; each a "Letter of Credit Ap-
plicant".
"Letter of Credit Commissions": as defined in Sec-
tion 3.2.
"Letter of Credit Commitment": (i) the commitment
of the Issuing Bank to issue Letters of Credit, provided that
the Letter of Credit Exposure shall not exceed $25,000,000
(determined on the basis of the Dollar Equivalent for each
outstanding Letter of Credit designated in an Alternate
Currency), and (ii) the commitment of the Lenders in respect
of the Letter of Credit Exposure as set forth in Section
2.20.
"Letter of Credit Exposure": at any date, the sum,
without duplication, of (i) the aggregate undrawn face
amount (determined on the basis of the Dollar Equivalent for
each outstanding Letter of Credit designated in an Alternate
Currency) of the outstanding Letters of Credit at such date
and (ii) the aggregate unpaid reimbursement obligations in
respect of the Letters of Credit at such date (after giving
effect to any Loans made on such date to pay any such reim-
bursement obligations and determined on the basis of the
Dollar Equivalent for each such reimbursement obligation in
respect of an outstanding Letter of Credit designated in an
Alternate Currency).<PAGE>
"Letter of Credit Request": a request in the form
of Exhibit L.
"Leverage Ratio": as of any date, the ratio of (a)
Total Debt on such date, to (b) Consolidated Capitalization
as of such date.
"Lien": any mortgage, pledge, assignment, lien,
charge, encumbrance or security interest of any kind, or the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Loan": each Revolving Loan, each Individual Cur-
rency Loan, each Negotiated Rate Loan, each Bid Loan and each
Swing Line Loan.
"Loan Documents": this Agreement and the Guaranty.
"Malaysian Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Malaysia and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Malaysian Ringgit": freely transferable lawful
money of Malaysia.
"Mandatory Borrowing": as defined in Section
2.1(d).
"Margin Stock": any "margin stock", as said term is
defined in Regulation U of the Board of Governors of the Fed-
eral Reserve System, as the same may be amended or supple-
mented from time to time.
"Material Adverse": with respect to any change or
effect, a material adverse change in, or effect on, as the
case may be, (i) the financial condition, operations, busi-
ness, prospects or Property of the Parent and its
Subsidiaries taken as a whole, (ii) the ability of the Parent
or any Borrower to perform its obligations under any Loan
Document, or (iii) the ability of the Administrative Agent,
the Issuing Bank, the Swing Line Lender or any Lender to en-
force any Loan Document.
"Maturity Date": June 30, 2000, or such earlier
date on which the Loans shall become due and payable, whether
by acceleration or otherwise.
"Maximum Offer": as defined in Section 2.11(b).
"Maximum Request": as defined in Section 2.11(a).
"Mexican Borrower": one or more of the following:<PAGE>
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Mexico and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Mexican Pesos": freely transferable lawful money
of Mexico.
"Moody's": Moody's Investors Service, Inc.
"Multiemployer Plan": a Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": as defined in Section 2.12.
"Negotiated Rate Confirmation": as defined in Sec-
tion 2.12.
"Negotiated Rate Confirmation Request": a request
by a Borrower and the Parent, in the form of Exhibit K, for
confirmation by a Lender of such Lender's agreement to make a
Negotiated Rate Loan to such Borrower pursuant to Section
2.12.
"Negotiated Rate Interest Period": as to any
Negotiated Rate Loan, the period commencing on the date of
such Negotiated Rate Loan, and ending on the applicable date
specified in the Negotiated Rate Confirmation for such
Negotiated Rate Loan, which shall not be earlier than 7 days
after the date of such Negotiated Rate Loan or later than 180
days after the date of such Negotiated Rate Loan; provided,
however, that (i) if any Negotiated Rate Interest Period
would end on a day other than a Business Day, such Negotiated
Rate Interest Period shall be extended to the next succeeding
Business Day, unless such next succeeding Business Day would
be a date on or after the Maturity Date in which case such
Negotiated Rate Interest Period shall end on the next preced-
ing Business Day and (ii) no Borrower shall select a Nego-
tiated Rate Interest Period which shall end after the
Maturity Date.
"Negotiated Rate Loan": each loan from a Lender to
a Borrower pursuant to Section 2.12.
"New Taiwan Dollars": freely transferable lawful
money of Taiwan.
"Non-Core Currencies": Australian Dollars,
Canadian Dollars, Hong Kong Dollars, Italian Lira, Korean
Won, Malaysian Ringgit, Mexican Pesos, New Taiwan Dollars,
Philippine Pesos, Singaporean Dollars, Swiss Francs and Thai
Baht; each a "Non-Core Currency".
"Non-Core Currency Borrowers": with respect to<PAGE>
Individual Currency Loans, the Australian Borrower, the
Canadian Borrower, the Hong Kong Borrower, the Italian
Borrower, the Korean Borrower, the Malaysian Borrower, the
Mexican Borrower, the Philippine Borrower, the Singaporean
Borrower, the Swiss Borrower, the Taiwanese Borrower and the
Thai Borrower; each a "Non-Core Currency Borrower".
"Non-Issuance Event": as defined in Section
2.19(a).
"Non-Swing Loan Event": as defined in Section
2.1(c).
"Notice of Borrowing": a request for Loans in the
form of Exhibit C signed by the Parent and the applicable
Borrower.
"Notice of Conversion": a notice substantially in
the form of Exhibit E.
"Obligation Currency": as defined in Section 11.14.
"Other Hedging Arrangement": any foreign exchange
contract, currency swap arrangement, commodity arrangement or
any other similar arrangement, in each case designed to pro-
tect against fluctuations of currency values.
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or
any Governmental Authority succeeding to the functions
thereof.
"Pension Plan": at any time, any Employee Benefit
Plan (including a Multiemployer Plan) subject to Section 302
of ERISA or Section 412 of the Code, the funding requirements
of which are, or at any time within the six years immediately
preceding the time in question, were in whole or in part, the
responsibility of the Parent, any of its Subsidiaries or an
ERISA Affiliate.
"Person": any individual, firm, partnership, joint
venture, corporation, association, business enterprise, lim-
ited liability company, joint stock company, unincorporated
association, trust, Governmental Authority or any other en-
tity, whether acting in an individual capacity, and for the
purpose of the definition of "ERISA Affiliate", a trade or
business.
"Philippine Borrower": one or more of the
following: Tiffany, Tiffany International or a wholly-owned
Subsidiary of the Parent which is organized under the laws
of, and has its principal office in, the Philippines and
which shall become a Borrower pursuant to Section 2.23
hereof.<PAGE>
"Philippine Pesos": freely transferable lawful
money of the Philippines.
"Portion": as defined in Section 2.11(b).
"Pricing Level": any of Pricing Level I, Pricing
Level II, Pricing Level III, Pricing Level IV, or Pricing
Level V.
"Pricing Level I": any time when the senior unse-
cured long term debt Rating of the Parent by (x) S&P is A- or
higher or (y) Moody's is A3 or higher.
"Pricing Level II": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is
BBB+ or higher or (y) Moody's is Baa1 or higher and (ii)
Pricing Level I does not apply.
"Pricing Level III": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is
BBB or higher or (y) Moody's is Baa2 or higher and (ii) nei-
ther Pricing Level I nor Pricing Level II applies.
"Pricing Level IV": any time when (i) the senior
unsecured long term debt Rating of the Parent by (x) S&P is
BBB- or higher or (y) Moody's is Baa3 or higher and (ii) none
of Pricing Level I, Pricing Level II or Pricing Level III ap-
plies.
"Pricing Level V": any time when (i) the senior un-
secured long term debt Rating of the Parent by (x) S&P is BB+
or lower or (y) Moody's is Ba1 or lower and (ii) none of
Pricing Level I, Pricing Level II, Pricing Level III or
Pricing Level IV applies.
"Prohibited Transaction": with respect to any Pen-
sion Plan, (a) any event set forth in Sections 4043(b) (other
than a Reportable Event as to which the 30 day notice
requirement is waived by the PBGC under applicable regula-
tions), 4062(e) or 4063(a) of ERISA or the regulations there-
under, (b) an event requiring the Parent, any of its
Subsidiaries or any ERISA Affiliate to provide security to a
Pension Plan under Section 401(a)(29) of the Code, or (c)
failure to make any payment required by Section 412(m) of the
Code.
"Property": in respect of any Person, all types of
real, personal, tangible, intangible or mixed property and
all types of tangible or intangible property owned or leased
by such Person.
"Proportionate Share": as to any Subsidiary Bor-
rower (a) if such cost, expense or other amount is directly
attributable to the Loans made to such Subsidiary Borrower or<PAGE>
any action taken or omitted to be taken by such Subsidiary
Borrower, 100% of such amount and (b) if such cost, expense
or other amount is not directly attributable to one or more
specific Borrowers, such amount multiplied by (i) if Loans
are outstanding, the percentage equivalent of a fraction the
numerator of which is the principal amount of Loans
outstanding to such Subsidiary Borrower and the denominator
of which is the aggregate amount of Loans outstanding to all
Borrowers and (ii) if no Loans are outstanding, the
percentage equivalent of a fraction the numerator of which is
one and the denominator of which is the number of Borrowers.
"Proposed Lender": as defined in Section 11.1(b).
"Quarterly Payment Date": each January 31, April
30, July 31 and October 31 of each year.
"Rating": the actual, or if no actual then the
implied, senior unsecured long term debt rating of the
Parent, in either case as assigned by S&P or Moody's, as the
case may be.
"Reference Lender": BNY.
"Regulation D": Regulation D of the Board of Gover-
nors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof estab-
lishing reserve requirements.
"Reportable Event": with respect to any Pension
Plan, (a) any event set forth in Sections 4043(c) (other than
a Reportable Event as to which the 30 day notice requirement
is waived by the PBGC under applicable regulations), 4062(e)
or 4063(a) of ERISA or the regulations thereunder, (b) an
event requiring the Parent, any of its Subsidiaries or any
ERISA Affiliate to provide security to a Pension Plan under
Section 401(a)(29) of the Code, or (c) failure to make any
payment required by Section 412(m) of the Code.
"Required Lenders": (i) at any time when no Loans
are outstanding, Lenders having Commitments or, if no Commit-
ments then exist, Lenders having Commitments on the last day
on which Commitments did exist, equal to at least 60% of the
Aggregate Commitments, and (ii) at any time when Loans are
outstanding (x) if the Commitments then exist, Lenders having
Commitments equal to at least 60% of the Aggregate
Commitments, and (y) if the Commitments have been terminated
or otherwise no longer exist, Lenders having Credit
Exposures equal to at least 60% of the Aggregate Credit
Exposure.
"Required Payment": as defined in Section 2.13(a).
"Responsible Officer": the president, the chief<PAGE>
financial officer, the treasurer or the assistant treasurer
of the Parent, Tiffany or Tiffany International.
"Restricted Payment": with respect to any Person,
any of the following, whether direct or indirect: (a) the
declaration or payment by such Person of any dividend or
distribution on any class of Stock of such Person, other than
a dividend payable solely in shares of that class of Stock to
the holders of such class, (b) the declaration or payment by
such Person of any distribution on any other type or class of
equity interest or equity investment in such Person, and (c)
any redemption, retirement, purchase or acquisition of, or
sinking fund or other similar payment in respect of, any
class of Stock of, or other type or class of equity interest
or equity investment in, such Person.
"Revolving Loan" and "Revolving Loans": as defined
in Section 2.1(a).
"S&P": Standard & Poor's Ratings Group.
"SEC": the Securities and Exchange Commission or
any Governmental Authority succeeding to the functions
thereof.
"Singaporean Borrower": one or more of the
following: Tiffany, Tiffany International or Tiffany & Co.
Pte. Ltd., a corporation organized under the laws of
Singapore and whose principal office is located in Singapore.
"Singaporean Dollars": freely transferable lawful
money of Singapore.
"SL/LC Credit Exposure": with respect to any Lender
at any time, (i) the sum of (A) the outstanding principal
balance of all Swing Line Loans (determined on the basis of
the Dollar Equivalent for each Alternate Currency Swing Line
Loan), plus (B) the Letter of Credit Exposure, multiplied by
(ii) the Availability Percentage of such Lender.
"Special Counsel": Emmet, Marvin & Martin, LLP,
special counsel to the Administrative Agent.
"Sterling Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co., a corpo-
ration organized under the laws of the United Kingdom and
whose principal office is located in the United Kingdom.
"Sterling Pounds": freely transferable lawful money
of the United Kingdom.
"Stock": any and all shares, rights, interests,
participations, warrants, options, rights of conversion or
other equivalents (however designated) of corporate stock.<PAGE>
"Subsidiary": with respect to any Person at any
time and from time to time, any corporation, association,
partnership, limited liability company, joint venture or
other business entity of which such Person and/or any
Subsidiary of such Person, directly or indirectly at such
time, either (a) in respect of a corporation, owns or
controls more than 50% of the outstanding Stock having ordi-
nary voting power to elect a majority of the board of direc-
tors or similar managing body, irrespective of whether a
class or classes shall or might have voting power by reason
of the happening of any contingency, or (b) in respect of an
association, partnership, limited liability company, joint
venture or other business entity, is entitled to share in
more than 50% of the profits and losses, however determined.
"Subsidiary Borrowers": collectively, the Domestic
Borrowers (other than Tiffany and Tiffany International), the
Australian Borrower, the Canadian Borrower, the French Bor-
rower, the German Borrower, the Hong Kong Borrower, the Ital-
ian Borrower, the Japanese Borrower, the Korean Borrower, the
Malaysian Borrower, the Mexican Borrower, the Philippine Bor-
rower, the Singaporean Borrower, the Sterling Borrower, the
Swiss Borrower, the Taiwanese Borrower and the Thai Borrower
which are signatories hereto on the Effective Date, and each
other wholly-owned Subsidiary of the Parent which becomes a
party to this Agreement by the execution of a Borrower Ad-
dendum pursuant to Section 2.23; each a "Subsidiary Bor-
rower".
"Swing Line Borrowers": with respect to Swing Line
Loans, the Domestic Borrowers, the French Borrower, the
German Borrower, the Japanese Borrower and the Sterling
Borrower; each a "Swing Line Borrower".
"Swing Line Commitment": an amount equal to
$15,000,000, as the same may be reduced from time to time
pursuant to Section 2.9.
"Swing Line Commitment Period": the period from the
Effective Date to, but excluding, the Swing Line Termination
Date.
"Swing Line Interest Period": (i) as to any Swing
Line Negotiated Rate Advance, the period commencing on the
date of such Swing Line Negotiated Rate Advance and ending on
the date agreed to between the Parent, the applicable Swing
Line Borrower and the Swing Line Lender with respect to such
Swing Line Negotiated Rate Advance, and (ii) as to any Swing
Line Loan made as an ABR Advance, the period commencing on
the date of such ABR Advance and ending on the date set forth
by the Parent and the applicable Swing Line Borrower in the
Notice of Borrowing with respect to such ABR Advance;
provided, however, that the last day of any Swing Line
Interest Period shall not be earlier than one day after the<PAGE>
date of such Swing Line Negotiated Rate Advance or ABR
Advance, as the case may be, or later than 30 days after the
date of such Swing Line Negotiated Rate Advance or ABR
Advance, as the case may be, and in no event later than 30
days prior to the Expiration Date; and provided further,
however, that if any Swing Line Interest Period would end on
a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day.
"Swing Line Lender": BNY.
"Swing Line Loan" and "Swing Line Loans": as de-
fined in Section 2.1(c).
"Swing Line Negotiated Rate": with respect to any
Swing Line Interest Period applicable to any Swing Line Nego-
tiated Rate Advance, the rate of interest per annum agreed to
by the Parent, the applicable Swing Line Borrower, and the
Swing Line Lender with respect thereto in accordance with
Section 2.3(b).
"Swing Line Negotiated Rate Advances":
collectively, the Swing Line Loans (or any portions thereof)
at such time as they (or such portions) are made and/or being
maintained at a rate of interest based on a Swing Line
Negotiated Rate; each a "Swing Line Negotiated Rate Advance".
"Swing Line Termination Date": the date which is 30
days prior to the Expiration Date.
"Swiss Borrower": one or more of the following:
Tiffany, Tiffany International or Tiffany & Co. Watch Factory
S.A., a corporation organized under the laws of Switzerland
and whose principal office is located in Switzerland.
"Swiss Francs": freely transferable lawful money of
Switzerland.
"Taiwanese Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Taiwan and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Tax": any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and
whatever called, by a Governmental Authority, on whomsoever
and wherever imposed, levied, collected, withheld or
assessed.
"Tax on the Income": as to any Person, a Tax im-
posed by one of the following jurisdictions or by any
political subdivision or taxing authority thereof: (i) the
United States, (ii) the jurisdiction in which such Person is<PAGE>
organized, (iii) the jurisdiction in which such Person's
principal office is located, or (iv) in the case of each
Lender or Swingline Lender, any jurisdiction in which such
Person is deemed to be doing business; which Tax is an income
tax or franchise tax imposed on all or part of the net income
or net profits of such Person or which Tax represents
interest, fees, or penalties for late payment of such an
income tax or franchise tax.
"Termination Event": with respect to any Pension
Plan, (a) a Reportable Event, (b) the termination of a
Pension Plan under Section 4041(c) of ERISA, or the filing of
a notice of intent to terminate a Pension Plan under Section
4041(c) of ERISA, or the treatment of a Pension Plan
amendment as a termination under Section 4041(e) of ERISA,
(c) the institution of proceedings by the PBGC to terminate a
Pension Plan under Section 4042 of ERISA, or (d) the
appointment of a trustee to administer any Pension Plan under
Section 4042 of ERISA.
"Thai Borrower": one or more of the following:
Tiffany, Tiffany International or a wholly-owned Subsidiary
of the Parent which is organized under the laws of, and has
its principal office in, Thailand and which shall become a
Borrower pursuant to Section 2.23 hereof.
"Thai Baht": freely transferable lawful money of
Thailand.
"Tiffany Japan": Tiffany & Co. Japan Inc., a
Delaware corporation.
"Total Debt": as of any date, all Indebtedness of
the Parent and its Subsidiaries on a Consolidated basis on
such date.
"Unfunded Pension Liabilities": with respect to
any Pension Plan (other than a Multiemployer Plan), as of the
last day of the fiscal year of such Pension Plan preceding
the time in question, the amount determined by taking the
accumulated benefit obligation, as disclosed in accordance
with Statement of Accounting Standards No. 87, "Employers'
Accounting for Pensions", over the fair market value of Pen-
sion Plan assets.
"United States": the United States of America (in-
cluding the States thereof and the District of Columbia).
"Upstream Dividends": as defined in Section 8.9.
"Unrecognized Retiree Welfare Liability": with re-
spect to any Employee Benefit Plan that provides
postretirement benefits other than pension benefits, the
amount of the transition obligation, as determined in ac-<PAGE>
cordance with Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," as of the most recent valuation date, that
has not been recognized as an expense in the income statement
of the Parent and its Consolidated Subsidiaries, provided
that (i) prior to the date such Statement is applicable to
the Parent, such amount shall be based on an estimate made in
good faith of the transition obligation, and (ii) for
purposes of determining the aggregate amount of the
Unrecognized Retiree Welfare Liability, Plans maintained by a
Consolidated Subsidiary of the Parent that is not otherwise
an ERISA Affiliate shall be included.
B. Principles of Construction
(a) All capitalized terms defined in this
Agreement shall have the meanings given such capitalized
terms herein when used in the other Loan Documents or any
certificate, opinion or other document made or delivered
pursuant hereto or thereto, unless otherwise expressly
provided therein.
(b) As used in the Loan Documents and in any cer-
tificate, opinion or other document made or delivered pursu-
ant thereto, accounting terms not defined in Section 1.1, and
accounting terms partly defined in Section 1.1 to the extent
not defined, shall have the respective meanings given to them
under GAAP. Unless otherwise expressly provided herein, the
word "fiscal" when used herein shall refer to the relevant
fiscal period of the Parent.
(c) The words "hereof", "herein", "hereto" and
"hereunder" and similar words when used in each Loan Document
shall refer to such Loan Document as a whole and not to any
particular provision of such Loan Document, and Section,
schedule and exhibit references contained therein shall refer
to Sections thereof or schedules or exhibits thereto unless
otherwise expressly provided therein.
(d) All references herein to a time of day shall
mean the then applicable time in New York, New York, unless
otherwise expressly provided herein.
(e) Section headings have been inserted herein and
in the other Loan Documents for convenience only and shall
not be construed to be a part hereof or thereof. Unless the
context otherwise requires, words in the singular number in-
clude the plural, and words in the plural include the singu-
lar.
(f) Whenever in any Loan Document or in any cer-
tificate or other document made or delivered pursuant
thereto, the terms thereof require that a Person sign or
execute the same or refer to the same as having been so<PAGE>
signed or executed, such terms shall mean that the same shall
be, or was, duly signed or executed by (i) in respect of any
Person that is a corporation, any duly authorized officer
thereof, and (ii) in respect of any other Person (other than
an individual), any analogous counterpart thereof.
(g) The words "include" and "including", when used
in each Loan Document, shall mean that the same shall be in-
cluded "without limitation", unless otherwise specifically
provided.
II. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT
A. Loans
(a) Subject to the terms and conditions hereof,
each Lender severally agrees from time to time during the
Commitment Period to make revolving credit loans to one or
more of the Core Currency Borrowers in the respective
Applicable Currencies (each a "Revolving Loan" and, as the
context may require, collectively with all other Revolving
Loans of such Lender and with the Revolving Loans of all
other Lenders, the "Revolving Loans"), provided, however,
that immediately after giving effect thereto, (i) the Ag-
gregate Credit Exposure shall not exceed the Aggregate Com-
mitments, and (ii) with respect to each Lender, (I) the ag-
gregate principal amount of all Revolving Loans then
outstanding from such Lender (determined on the basis of the
Dollar Equivalent for each outstanding Alternate Currency Re-
volving Loan), plus (II) the aggregate principal amount of
all Individual Currency Loans then outstanding from such
Lender (determined on the basis of the Dollar Equivalent of
each such Individual Currency Loan), plus (III) the SL/LC
Credit Exposure of such Lender, shall not exceed such
Lender's Commitment. During the Commitment Period, the Core
Currency Borrowers may borrow, prepay in whole or in part and
reborrow Revolving Loans under the Aggregate Commitments, all
in accordance with the terms and conditions of this Agree-
ment.
(b) Subject to the terms and conditions hereof,
Revolving Loans, (i) if to be made in Dollars (each a "Dollar
Revolving Loan" and, collectively, the "Dollar Revolving
Loans"), shall be made to one or more Domestic Borrowers and
shall, at the option of such Domestic Borrowers, be either
ABR Advances or Eurodollar Advances, (ii) if to be made in
French Francs, shall be made to the French Borrower, (iii) if
to be made in German Marks, shall be made to the German
Borrower, (iv) if to be made in Japanese Yen, shall be made
to the Japanese Borrower, and (v) if to be made in Sterling
Pounds, shall be made to the Sterling Borrower. The Re-
volving Loans, together with all accrued and unpaid interest
thereon, shall mature and be due and payable in the Ap-<PAGE>
plicable Currency on the Maturity Date.
(c) Subject to and upon the terms and conditions
set forth herein, the Swing Line Lender in its individual ca-
pacity agrees to make at any time and from time to time dur-
ing the Swing Line Commitment Period, a loan or loans (each a
"Swing Line Loan" and, collectively, the "Swing Line Loans")
to one or more of the Swing Line Borrowers, which Swing Line
Loans (i) shall, at the option of the applicable Swing Line
Borrower, be made and maintained as Dollar Swing Line Loans
or Alternate Currency Swing Line Loans in an Available Alter-
nate Currency, (ii) may be repaid and reborrowed in ac-
cordance with the provisions hereof, (iii) shall not, im-
mediately after giving effect thereto, result in the Ag-
gregate Credit Exposure exceeding the Aggregate Commitments,
and (iv) shall not, immediately after giving effect thereto,
result in the aggregate outstanding principal amount of all
Swing Line Loans (determined on the basis of the Dollar
Equivalent for each outstanding Alternate Currency Swing Line
Loan) exceeding the Swing Line Commitment. The Swing Line
Lender shall not be obligated to make any Swing Line Loans at
a time when any Lender (other than the Swing Line Lender)
shall be in default of its obligations under this Agreement
unless the Swing Line Lender has entered into arrangements
satisfactory to it and the Parent to eliminate the Swing Line
Lender's risk with respect to each defaulting Lender's par-
ticipation in such Swing Line Loans. The Swing Line Lender
will not make a Swing Line Loan (i) if the Administrative
Agent or any Lender by notice to the Swing Line Lender, the
Parent and the affected Swing Line Borrower prior to the time
such Swing Line Loan is to be made, shall have determined
that any of the applicable conditions set forth in Sections 5
and 6 have not been satisfied and such conditions remain
unsatisfied as of the requested time of making such Swing
Line Loan or (ii) to the extent that immediately after giving
effect thereto the Aggregate Credit Exposure would exceed the
Aggregate Commitments (each a "Non-Swing Loan Event"). Swing
Line Loans shall mature and be due and payable on the earlier
of, with respect to each Swing Line Negotiated Rate Advance
and Swing Line Loan maintained as an ABR Advance, (x) the
last day of the Swing Line Interest Period applicable thereto
and (y) the Maturity Date. Subject to the terms and
conditions hereof, Swing Line Loans, (i) if to be made in
Dollars (each a "Dollar Swing Line Loan" and, collectively,
the "Dollar Swing Line Loans"), shall be made to one or more
Domestic Borrowers and shall be ABR Advances, (ii) if to be
made in French Francs, shall be made to the French Borrower,
(iii) if to be made in German Marks, shall be made to the
German Borrower, (iv) if to be made in Japanese Yen, shall be
made to the Japanese Borrower, and (v) if to be made in
Sterling Pounds, shall be made to the Sterling Borrower.
(d) On any Business Day, the Swing Line Lender
may, in its sole discretion, give notice to the Lenders and<PAGE>
the Parent (on behalf of all Swing Line Borrowers) that its
outstanding Swing Line Loans shall be funded with a borrowing
of Revolving Loans (provided that such notice shall be deemed
to have been automatically given upon the occurrence of a De-
fault or an Event of Default under Sections 9.1(g) or (h)),
in which case one or more borrowings of Revolving Loans con-
stituting ABR Advances (or constituting one or more Eurodol-
lar Advances specified by the Parent in accordance with Sec-
tion 2.3(a)) or Alternate Currency Revolving Loans with a one
month Euro Interest Period (or such other Euro Interest
Period(s) specified by the Parent in accordance with Section
2.3(a)) in the Applicable Currency, as the case may be (each
such borrowing a "Mandatory Borrowing"), shall be made on the
fifth Business Day immediately succeeding such notice by all
Lenders pro rata based on each such Lender's Availability
Percentage immediately prior thereto but after giving effect
to any prepayment of Revolving Loans, Individual Currency
Loans, or Swing Line Loans, or any payment of reimbursement
obligations in respect of the Letters of Credit, to be made
simultaneously therewith, and the proceeds thereof shall be
applied directly to the Swing Line Lender to repay the Swing
Line Lender for such outstanding Swing Line Loans. Each
Lender hereby irrevocably agrees to make Revolving Loans in
Dollars or the Applicable Currency, as the case may be,
pursuant to each Mandatory Borrowing in respect of any Swing
Line Loan in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by
the Swing Line Lender notwithstanding (i) the amount of the
Mandatory Borrowing may not comply with the minimum amount
for Loans otherwise required hereunder, (ii) whether any
conditions specified in Sections 5 and 6 are then satisfied,
(iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing, (v) the aggregate
principal amount of all Loans then outstanding (determined on
the basis of the Dollar Equivalent of each outstanding
Alternate Currency Loan), (vi) the Aggregate Credit Exposure
at such time and (vii) the amount of the Aggregate
Commitments at such time, provided that no Non-Swing Loan
Event shall have occurred and be continuing with respect to
such Swing Line Loan. In the event that any Mandatory
Borrowing cannot for any reason be made on the date
otherwise required above (including as a result of the com-
mencement of any proceeding referred to in Sections 9.1(g) or
(h)) then each Lender hereby agrees that it shall forthwith
purchase (as of the date the Mandatory Borrowing would other-
wise have occurred, but adjusted for any payments received
from the Parent or the applicable Swing Line Borrower on or
after such date and prior to such purchase) from the Swing
Line Lender such assignments in each outstanding Swing Line
Loan as shall be necessary to cause the Lenders to share in
each such Swing Line Loan ratably based upon their respective
Availability Percentages at such time, provided that no
Non-Swing Loan Event shall have occurred and be continuing
with respect to such Swing Line Loan, and provided further<PAGE>
that all interest payable on each such Swing Line Loan shall
be for the account of the Swing Line Lender until the date as
of which the respective assignment therein is purchased and,
to the extent attributable to the purchased assignment, shall
be payable to the relevant Lender from and after such date.
Each Lender agrees promptly to indemnify the Swing Line
Lender for any costs or expenses the Swing Line Lender may
incur as a result of the failure of such Lender to fulfill
its obligations under this Section 2.1(d).
(e) Subject to the terms and conditions hereof,
each Lender in its individual capacity agrees to make at any
time and from time to time during the Commitment Period a
loan or loans under one or more of its Individual Currency
Commitments (each an "Individual Currency Loan" and, as the
context may require, collectively with all other Individual
Currency Loans of such Lender and, as the context may re-
quire, with the Individual Currency Loans of all other Lend-
ers, the "Individual Currency Loans") to one or more of the
applicable Non-Core Currency Borrowers in the respective Ap-
plicable Currencies, provided, however, that immediately
after giving effect thereto:
(i) the Aggregate Credit Exposure shall not exceed
the Aggregate Commitments,
(ii) the Aggregate Credit Exposure attributable to
all Loans and Letters of Credit designated in Non-Core
Currencies shall not exceed $60,000,000,
(iii) with respect to any Applicable Currency,
(x) the aggregate principal amount of the Individual
Currency Loans of such Lender designated in such
Applicable Currency shall not exceed such Lender's
Individual Currency Commitment for such Applicable
Currency and (y) the sum of the aggregate principal
amount of the Individual Currency Loans of all Lenders
in such Applicable Currency and the Letter of Credit
Exposure attributable to all Letters of Credit issued in
such Applicable Currency (determined on the basis of the
Dollar Equivalent of each such Individual Currency Loan
and each such Letter of Credit) shall not exceed
$5,000,000, and
(iv) with respect to each Lender (x) the aggregate
principal amount of all Individual Currency Loans then
outstanding from such Lender (determined on the basis of
the Dollar Equivalent of each such Individual Currency
Loan), plus (y) the aggregate principal amount of all
Revolving Loans then outstanding from such Lender (de-
termined on the basis of the Dollar Equivalent for each
outstanding Alternate Currency Revolving Loan), plus (z)
the SL/LC Credit Exposure of such Lender, shall not ex-
ceed such Lender's Commitment.<PAGE>
During the Commitment Period, the Non-Core Currency Borrowers
may borrow, prepay in whole or in part and reborrow Indi-
vidual Currency Loans under the Aggregate Individual Currency
Commitments, all in accordance with the terms and conditions
of this Agreement.
(f) Subject to the terms and conditions hereof,
Individual Currency Loans, (i) if to be made in Australian
Dollars, shall be made to the Australian Borrower, (ii) if to
be made in Canadian Dollars, shall be made to the Canadian
Borrower, (iii) if to be made in Hong Kong Dollars, shall be
made to the Hong Kong Borrower, (iv) if to be made in Italian
Lira, shall be made to the Italian Borrower, (v) if to be
made in Korean Won, shall be made to the Korean Borrower,
(vi) if to be made in Malaysian Ringgit, shall be made to the
Malaysian Borrower, (vii) if to be made in Mexican Pesos,
shall be made to the Mexican Borrower, (viii) if to be made
in Philippine Pesos, shall be made to the Philippine
Borrower, (ix) if to be made in Singaporean Dollars, shall be
made to the Singaporean Borrower, (x) if to be made in Swiss
Francs, shall be made to the Swiss Borrower, (xi) if to be
made in New Taiwan Dollars, shall be made to the Taiwanese
Borrower, and (xii) if to be made in Thai Baht, shall be made
to the Thai Borrower. Each Individual Currency Loan shall be
due and payable on the earlier of (x) the last day of the
Individual Currency Interest Period applicable thereto and
(y) the Maturity Date.
B. Minimum Amount of Each Borrowing
(a) The aggregate principal amount of each bor-
rowing of Revolving Loans shall not (x) in the case of Re-
volving Loans constituting ABR Advances, be less than
$500,000 or such amount and a whole multiple of $100,000 in
excess thereof, and (y) in the case of Eurodollar Advances
and Core Currency Euro Advances, be less than $500,000 or
such amount and a whole multiple of $100,000 in excess
thereof (or an amount in the applicable Alternate Currency
having a Dollar Equivalent of approximately $500,000 or such
amount plus a whole multiple of approximately $100,000 in
excess thereof in the case of a borrowing of Alternate Cur-
rency Revolving Loans), provided, in each case that Mandatory
Borrowings shall be made in the amounts required by Section
2.1(d).
(b) The aggregate principal amount of each borrow-
ing of Swing Line Loans shall not be less than $100,000 or
such amount plus a multiple of $50,000 in excess thereof (or
an amount in the applicable Alternate Currency having a Dol-
lar Equivalent of approximately $100,000 or such amount plus
a whole multiple of approximately $50,000 in excess thereof
in the case of a borrowing of Alternate Currency Swing Line
Loans).<PAGE>
(c) The aggregate principal amount of each borrow-
ing of Individual Currency Loans shall not be less than an
amount in the applicable Non-Core Alternate Currency having a
Dollar Equivalent of approximately $100,000 or such amount
plus a whole multiple of approximately $50,000 in excess
thereof.
(d) At no time shall the aggregate outstanding
number (whether as a result of borrowings or conversions), of
all (x) Eurodollar Advances exceed 5, (y) all Core Currency
Euro Advances exceed 10 and (z) all Individual Currency Loans
exceed 18.
(e) The aggregate number of all Bid Requests shall
not exceed 12 (or such other number as the Parent and the Ad-
ministrative Agent shall agree from time to time) in any fis-
cal quarter.
C. Notice of Borrowing
(a) Whenever a Borrower desires to borrow Loans
hereunder (excluding Swing Line Loans, Bid Loans, Negotiated
Rate Loans, Individual Currency Loans and Mandatory Borrow-
ings), the Parent and such Borrower shall give the Adminis-
trative Agent at its office set forth in Section 11.2 (i) no
later than 10:00 A.M. on the date that an ABR Advance is to
be made written notice (or telephonic notice promptly con-
firmed in writing) of each ABR Advance, (ii) no later than
10:00 A.M. at least two Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each
Eurodollar Advance and (iii) no later than 11:00 A.M. at
least three Business Days' prior written notice (or tele-
phonic notice promptly confirmed in writing) of each Alter-
nate Currency Loan (other than an Individual Currency Loan)
to be made hereunder, provided that any such notice shall be
deemed to have been given on a certain day only if given be-
fore 10:00 A.M. on such day in the case of clauses (i) and
(ii) above and 11:00 A.M. on such day in the case of clause
(iii) above. Each such written notice or written confirma-
tion of telephonic notice (each a "Notice of Borrowing"),
shall be irrevocable and shall be given by the Parent and the
applicable Borrower in the form of Exhibit C, appropriately
completed to specify (A) the name of such Borrower, (B) the
date of such borrowing (which shall be a Business Day), (C)
the Applicable Currency for such Loans, (D) the aggregate
principal amount of the Loans to be made (stated in the Ap-
plicable Currency), (E) in the case of Dollar Loans, whether
the Loans being made are to be initially maintained as ABR
Advances or Eurodollar Advances and (F) in the case of all
Loans (other than ABR Advances), the initial Interest Period
to be applicable thereto. The Administrative Agent shall
promptly give each Lender notice of such proposed borrowing,
of such Lender's proportionate share thereof and of the other
matters required by the immediately preceding sentence to be<PAGE>
specified in the Notice of Borrowing.
(b) (i) Whenever a Swing Line Borrower desires to
borrow Swing Line Loans hereunder, the Parent and such Swing
Line Borrower shall give the Swing Line Lender a Notice of
Borrowing (or telephonic notice promptly confirmed by deliv-
ery of a Notice of Borrowing) at its office set forth in Sec-
tion 11.2 no later than (x) 1:00 P.M. on the requested Bor-
rowing Date in respect of a Dollar Swing Line Loan, (y) 10:00
A.M. at least one Business Day prior to the requested Borrow-
ing Date in respect of an Alternate Currency Swing Line Loan
in Sterling Pounds and (z) 10:00 A.M. at least two Business
Days prior to the requested Borrowing Date in respect of any
other Alternate Currency Swing Line Loan, provided, that any
such notice shall be deemed to have been given on a certain
day only if given before 1:00 P.M. on such day in the case of
clause (x) above or 10:00 A.M. on such day in the case of
clause (y) or (z) above. Each such notice shall be ir-
revocable and specify in each case (A) the name of such Swing
Line Borrower, (B) the date of such incurrence (which shall
be a Business Day) (C) the Applicable Currency for such Swing
Line Loans, (D) the aggregate principal amount of such Swing
Line Loans (stated in the Applicable Currency) and (E) the
requested amount and the requested Swing Line Interest Period
and maturity date with respect to each Swing Line Negotiated
Rate Advance and Swing Line Loan made as an ABR Advance.
Upon receipt from the Parent and the applicable Swing Line
Borrower of a Notice of Borrowing which requests one or more
Swing Line Negotiated Rate Advances, the Swing Line Lender
shall, following discussion with the Parent regarding the
proposed Swing Line Negotiated Rate for such Swing Line Nego-
tiated Rate Advance, confirm in writing to the Parent the
applicable Swing Line Negotiated Rate (x) 12:00 Noon one
Business Day prior to the requested Borrowing Date in the
case of a Swing Line Negotiated Rate Advance in Sterling
Pounds and (y) 12:00 Noon two Business Days prior to the re-
quested Borrowing Date in the case of a Swing Line Negotiated
Rate Advance in a Core Currency (other than Dollars and Ster-
ling Pounds).
(ii) Mandatory Borrowings shall be made upon
the notice specified in Section 2.1(d), with each Swing Line
Borrower irrevocably agreeing, by its borrowing of any Swing
Line Loan, to the making of the Mandatory Borrowings as set
forth in Section 2.1(d).
(c) Whenever any Non-Core Currency Borrower de-
sires to borrow Individual Currency Loans hereunder, the Par-
ent and such Non-Core Currency Borrower shall give the ap-
plicable Lenders and the Administrative Agent at their re-
spective offices set forth in 11.2 a Notice of Borrowing (or
telephonic notice promptly confirmed by delivery of a Notice
of Borrowing) no later than 11:00 A.M. at least three Busi-
ness Days' prior to the requested Borrowing Date in respect<PAGE>
of such Individual Currency Loans, provided that any such
notice shall be deemed to have been given on a certain day
only if given before 11:00 A.M. on such day. Upon its
receipt of any such Notice of Borrowing, the Administrative
Agent shall promptly confirm in writing its receipt of such
Notice of Borrowing to each applicable Lender; only upon
receipt by such Lender of such written confirmation from the
Administrative Agent will such Notice of Borrowing become
effective. Each such notice of the Borrower shall be ir-
revocable and shall specify (A) the name of such Non-Core
Borrower, (B) the date of such borrowing (which shall be a
Business Day), (C) the Applicable Currency for such
Individual Currency Loans, (D) the aggregate principal amount
of such Individual Currency Loans (stated in the Applicable
Currency), and (E) the Interest Period to be applicable
thereto.
(d) Without in any way limiting the obligation of
any Borrower to confirm in writing any telephonic notice of
any incurrence of Loans, the Administrative Agent or the
Swing Line Lender (in the case of any borrowing of Swing Line
Loans), as the case may be, may act without liability upon
the basis of telephonic notice of such borrowing, believed by
the Administrative Agent or the Swing Line Lender, as the
case may be, in good faith to be from such Borrower prior to
receipt of written confirmation.
D. Disbursement of Funds
(a) Revolving Loans and Swing Line Loans. No later
than 12:00 Noon (local time in the city in which the proceeds
of Loans (other than Bid Loans, Negotiated Rate Loans and In-
dividual Currency Loans) are to be made available in ac-
cordance with the terms hereof) on the date specified in each
Notice of Borrowing (or no later than 5:00 P.M. (New York
City time) on the date specified for the borrowing of each
Dollar Swing Line Loan and each Dollar Revolving Loan), each
Lender will make available its pro rata portion of the Loans
requested to be made on such date (or in the case of Swing
Line Loans, the Swing Line Lender shall make available the
full amount thereof), in the Applicable Currency. All such
Loans shall be made available in immediately available funds
at the Applicable Payment Office of the Administrative Agent,
and the Administrative Agent will make available to the ap-
plicable Borrower at such Applicable Payment Office, in the
Applicable Currency, and in immediately available funds, the
aggregate of the amounts so made available by the Lenders
prior to 2:30 P.M. (local time in the city in which the pro-
ceeds of such Loans are to be made available in accordance
with the terms hereof) on such day (or 5:00 P.M. (New York
City time) on such day for Dollar Swing Line Loans and Dollar
Revolving Loans), in each case to the extent of funds actu-
ally received by the Administrative Agent.<PAGE>
(b) Bid Loans. No later than 12:00 Noon (local
time in the city in which the proceeds of such Bid Loans are
to be made available in accordance with the terms hereof) on
the relevant Borrowing Date, each Lender whose Bid was ac-
cepted by the applicable Borrower shall make available the
proceeds of such Lender's Bid Loan(s) (x) in the case of Dol-
lar Bid Loans, to the Administrative Agent at its Applicable
Payment Office and (y) in the case of Alternate Currency Bid
Loans, directly to such Borrower at such Lender's Applicable
Payment Office, in each case in immediately available funds
in the Applicable Currency. Notwithstanding the foregoing,
upon the occurrence and during the continuance of an Event of
Default, if directed by the Required Lenders and with the
consent of the Administrative Agent, the proceeds of all such
Bid Loans shall be made available in immediately available
funds at the Applicable Payment Office of the Administrative
Agent. All amounts made available to the Administrative
Agent on the applicable Borrowing Date pursuant to the pre-
ceding two sentences will then be made available on such date
to the applicable Borrower by the Administrative Agent at the
Applicable Payment Office of the Administrative Agent to the
extent of funds actually received by the Administrative Agent
no later than 2:30 P.M. (local time in the city in which the
proceeds of such loans are to be made available in accordance
with the terms hereof).
(c) Negotiated Rate Loans. No later than 12:00
Noon (local time in the city in which the proceeds of such
Negotiated Rate Loans are to be made available in accordance
with the terms hereof) on the relevant Borrowing Date for
each Negotiated Rate Loan, the applicable Lender shall make
available the proceeds of such Negotiated Rate Loan (x) in
the case of Dollar Negotiated Rate Loans, to the Adminis-
trative Agent at its Applicable Payment Office and (y) in the
case of Alternate Currency Negotiated Rate Loans, directly to
the applicable Borrower at such Lender's Applicable Payment
Office, in each case in immediately available funds in the
Applicable Currency. Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default,
if directed by the Required Lenders and with the consent of
the Administrative Agent, the proceeds of all such Negoti-
ated Rate Loans shall be made available in immediately avail-
able funds at the Applicable Payment Office of the Adminis-
trative Agent. All amounts made available to the Administra-
tive Agent on the applicable Borrowing Date pursuant to the
preceding two sentences will then be made available on such
date to the applicable Borrower by the Administrative Agent
at the Applicable Payment Office of the Administrative Agent
to the extent of funds actually received by the Administra-
tive Agent no later than 2:30 P.M. (local time in the city
in which the proceeds of such loans are to be made available
in accordance with the terms hereof).
(d) Individual Currency Loans. No later than 12:00<PAGE>
Noon (local time in the city in which the proceeds of such
Individual Currency Loans are to be made available in ac-
cordance with the terms hereof) on the relevant Borrowing
Date for each Individual Currency Loan, the applicable Lender
shall make available the proceeds of such Individual Currency
Loan directly to the applicable Borrower at such Lender's Ap-
plicable Payment Office, in each case in immediately avail-
able funds in the Applicable Currency. Notwithstanding the
foregoing, upon the occurrence and during the continuance of
an Event of Default, if directed by the Required Lenders and
with the consent of the Administrative Agent, the proceeds of
all such Individual Currency Loans shall be made available in
immediately available funds at the Applicable Payment Office
of the Administrative Agent. All amounts made available to
the Administrative Agent on the applicable Borrowing Date
pursuant to the preceding two sentences will then be made
available on such date to the applicable Borrower by the Ad-
ministrative Agent at the Applicable Payment Office of the
Administrative Agent to the extent of funds actually received
by the Administrative Agent no later than 2:30 P.M. (local
time in the city in which the proceeds of such loans are to
be made available in accordance with the terms hereof).
(e) Failure to Fund. Unless the Administrative
Agent shall have been notified by a Lender prior to the
making of any Loans that such Lender does not intend to make
available to the Administrative Agent either (w) such
Lender's portion of the Loans (other than Bid Loans,
Individual Currency Loans and Negotiated Rate Loans) to be
made on such date, (x) such Lender's Bid Loan which is to be
made available to the Administrative Agent, (y) such Lender's
Negotiated Rate Loan which is to be made available to the
Administrative Agent or (z) such Lender's Individual Currency
Loan which is to be made available to the Administrative
Agent, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on
such Borrowing Date and the Administrative Agent may, in re-
liance upon such assumption, make available to the applicable
Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be enti-
tled to recover such corresponding amount on demand from such
Lender together with all costs and expenses incurred by the
Administrative Agent in connection therewith. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the applicable Borrower. The Ad-
ministrative Agent shall be entitled to recover on demand
from such Lender interest on such corresponding amount in
respect of each day from the date such corresponding amount
was made available by the Administrative Agent to such
Borrower until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum
equal to the Federal Funds Rate in effect (or in the case of<PAGE>
Alternate Currency Loans, at a rate based upon the all-in
cost of funds for the Applicable Currency) on each such day
(as determined by the Administrative Agent). If such cor-
responding amount is not made available by such Lender to the
Administrative Agent within one Business Day after such Bor-
rowing Date, the Administrative Agent shall also be entitled
to receive from the applicable Borrower such amount, together
with (w) in the case of a Loan (other than a Bid Loan, an In-
dividual Currency Loan and a Negotiated Rate Loan), the rate
of interest applicable to such Loan as determined pursuant to
Section 2.8, (x) in the case of Bid Loan, the applicable in-
terest rate for such Bid Loan (or in the case of Alternate
Currency Bid Loans, at a rate based upon the all-in cost of
funds for the Applicable Currency) (y) in the case of a Nego-
tiated Rate Loan, the applicable interest rate for such Nego-
tiated Rate Loan (or in the case of Alternate Currency
Negotiated Rate Loans, at a rate based upon the all-in cost
of funds for the Applicable Currency), or (z) in the case of
an Individual Currency Loan, the applicable rate based upon
the all-in cost of funds for the Applicable Currency. Noth-
ing in this Section shall be deemed to relieve any Lender
from its obligation to make Loans hereunder or to prejudice
any rights which the applicable Borrower may have against any
Lender as a result of any failure by such Lender to make
Loans hereunder.
(f) Borrower Accounts. Each Loan made to a
Borrower shall be made to its applicable payment account
specified on Exhibit T or such other account which it may
from time to time specify by written notice to the
Administrative Agent and the Lenders.
E. Payments.
(a) Loans and Fees. Except as otherwise specifi-
cally provided herein, each payment, including each prepay-
ment, of principal and interest on the Revolving Loans, the
Individual Currency Loans, the Negotiated Rate Loans, the Bid
Loans, the Facility Fee and the Letter of Credit Commissions
shall be made by the Borrowers to the Administrative Agent at
its Applicable Payment Office in funds immediately available
to the Administrative Agent at such office by 12:00 Noon (lo-
cal time in the city in which such Applicable Payment Office
is located) on the due date for such payment, provided, how-
ever, that unless an Event of Default has occurred and is
continuing and the Required Lenders have directed the Admin-
istrative Agent and the Borrowers to the contrary, and the
Administrative Agent shall have consented thereto, each pay-
ment, including each prepayment, of principal and interest on
the Alternate Currency Bid Loans, the Alternate Currency Ne-
gotiated Rate Loans, and the Individual Currency Loans shall
be made directly by the applicable Borrower to the applicable
Lender at the Applicable Payment Office of such Lender by
12:00 Noon (local time in the city in which such Lender's Ap-<PAGE>
plicable Payment Office is located). Promptly upon receipt
by the Administrative Agent of payments made to it pursuant
to this Section 2.5(a), the Administrative Agent shall remit
such payment in like funds as received to the Lenders (x) (i)
in the case of the Facility Fee, according to the Commitment
Percentage of each Lender, and (ii) in the case of the Letter
of Credit Commissions, the average daily Availability
Percentage of each Lender for the period in respect of which
such payment was made and (y) pro rata according to the ag-
gregate outstanding principal balance of the Revolving Loans,
the applicable Individual Currency Loans, the applicable
Negotiated Rate Loans or the applicable Bid Loans, as the
case may be, of each Lender, in the case of principal and
interest thereon. The Parent and each Lender shall promptly
notify the Administrative Agent of the date and amount of
each direct payment made by a Borrower to such Lender in
respect of each Alternate Currency Bid Loan, each Alternate
Currency Negotiated Rate Loan and each Individual Currency
Loan pursuant to this Section 2.5(a).
(b) Swing Line Loans. Each payment, including each
prepayment, of principal and interest on the Swing Line Loans
shall be made by the applicable Swing Loan Borrower to the
Administrative Agent at its Applicable Payment Office in
funds immediately available to the Administrative Agent at
such office by 12:00 Noon (local time in the city in which
such Applicable Payment Office is located) on the due date
for such payment and, promptly upon receipt thereof by the
Administrative Agent, shall be remitted by the Administrative
Agent in like funds as received, to the Swing Line Lender.
(c) Late Payments. The failure of any of the Bor-
rowers to make any such payment by the time required above in
this Section 2.5 shall not constitute a default hereunder,
provided that such payment is made on such due date, but any
such payment made after 12:00 Noon (local time in the city in
which such Applicable Payment Office is located) on such due
date shall be deemed to have been made on the next Business
Day for the purpose of calculating interest on amounts out-
standing on the applicable Loans.
(d) Alternate Currencies. The principal of and in-
terest on each Alternate Currency Loan shall be paid only in
the Applicable Currency for such Alternate Currency Loan.
(e) Payments Due on Days Which are Not Business
Days. If any payment hereunder shall be due and payable on a
day which is not a Business Day, the due date thereof (except
as otherwise provided herein) shall be extended to the next
Business Day and with respect to payments in respect of prin-
cipal and interest shall be payable at the applicable rate
specified herein during such extension.
F. Conversions<PAGE>
(a) Each applicable Borrower shall have the option
to convert on any Business Day all or a portion of the out-
standing principal amount of ABR Advances (other than ABR Ad-
vances constituting Swing Line Loans), Eurodollar Advances or
Core Currency Euro Advances into (i) in the case of an ABR
Advance, one or more Eurodollar Advances, (ii) in the case of
a Eurodollar Advance, one or more ABR Advances or one or more
new Eurodollar Advances and (iii) in the case of a Core Cur-
rency Euro Advance, one or more new Core Currency Euro Ad-
vances of the same Core Currency, provided that (A) except as
otherwise provided in Section 2.14(b), Eurodollar Advances
may be converted into ABR Advances or new Eurodollar Advances
only on the last day of the Interest Period applicable to the
Eurodollar Advances being converted, (B) except as otherwise
provided in Section 2.14(b), Core Currency Euro Advances may
be converted into new Core Currency Euro Advances only on the
last day of the Interest Period applicable to the Core Cur-
rency Euro Advances being converted, (C) the outstanding
principal amount of the new Eurodollar Advances having the
same Interest Period or the new Core Currency Euro Advances
having the same Interest Period shall be in an amount equal
to $500,000 or such amount plus a whole multiple of $100,000
in excess thereof (or an amount in the applicable Alternate
Currency having a Dollar Equivalent of approximately $500,000
or such amount plus a whole multiple of approximately
$100,000 in excess thereof in the case of such Core Currency
Euro Advances), (D) the outstanding principal amount of the
new ABR Advances shall be in an amount equal to $500,000 or
such amount plus a whole multiple of $100,000 in excess
thereof, (E) ABR Advances or Eurodollar Advances may not be
converted into Eurodollar Advances if any Default or Event of
Default is in existence on the date of the conversion and the
Administrative Agent or the Required Lenders have determined
that such a conversion is not appropriate, and (F) no con-
version pursuant to this Section shall result in a greater
number of Eurodollar Advances or Core Currency Euro Advances
than is permitted under Section 2.2(d).
(b) Each such conversion shall be effected by the
applicable Borrower by giving the Administrative Agent, at
its office set forth in Section 11.2 prior to 10:00 A.M. in
the case of Dollar Loans, at least two Business Days prior
written notice and, in the case of Core Currency Euro Ad-
vances, at least three Business Days prior written notice
(each a "Notice of Conversion"), specifying the ABR Advances,
the Eurodollar Advances or the Core Currency Euro Advances to
be so converted, the date of such conversion (which shall be
a Business Day) and, if to be converted into Eurodollar Ad-
vances or Core Currency Euro Advances, the Interest Period to
be applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed conversion
affecting any of its Loans.
(c) If with respect to the expiration of an exist-<PAGE>
ing Interest Period for a Eurodollar Advance or a Core Cur-
rency Euro Advance the applicable Borrower has failed to de-
liver a Notice of Conversion with respect thereto, such Bor-
rower shall be deemed to have elected (i) if a Eurodollar Ad-
vance, to convert such Eurodollar Advance to an ABR Advance
and (ii) if a Core Currency Euro Advance, to convert such
Core Currency Euro Advance to a new Core Currency Euro Ad-
vance with a one month Interest Period, in either case effec-
tive as of the expiration date of such existing Interest Pe-
riod.
G. Pro Rata Borrowings; Special Procedures and
Assumptions
(a) Pro Rata Borrowings. In connection with each
borrowing of Revolving Loans, each Lender shall make
available an amount equal to the aggregate amount of such
Revolving Loans, multiplied by such Lender's Availability
Percentage calculated in accordance with Section 2.7(b). It
is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Loans
hereunder and that each Lender shall be obligated to make the
Loans provided to be made by it hereunder, regardless of the
failure of any other Lender to make its Loans hereunder.
(b) Special Procedures and Assumptions.
Notwithstanding anything to the contrary contained herein:
(i) all Notices of Borrowing and all Letter of
Credit Requests to be delivered to the Administrative
Agent on the same day shall be delivered to the Adminis-
trative Agent at the same time;
(ii) with respect to any Loans (other than a Bid
Loan or a Negotiated Rate Loan) or Letters of Credit
requested pursuant to one or more Notices of Borrowing
or Letter of Credit Requests delivered to the Agent on
the same day, during the period commencing on the date
of such delivery to the Administrative Agent and ending
on the Borrowing Date of the last such Loan or the date
of issuance of the last such Letter of Credit to be made
or issued pursuant to such Notices of Borrowing or
Letter of Credit Requests (the "Borrowing/Issuance
Period"):
(A) no additional Loan (other than a Bid Loan
or a Negotiated Rate Loan) shall be requested to be
made and no additional Letter of Credit shall be
requested to be issued;
(B) no Loan (other than a Bid Loan or a Nego-
tiated Rate Loan) shall be voluntarily prepaid; and
(C) neither the Aggregate Commitments, the<PAGE>
Swing Line Commitment, any Individual Currency Com-
mitment of any Lender, nor the Letter of Credit
Commitment shall be voluntarily reduced;
(iii) for purposes of calculating the Availability
Percentage for any Revolving Loans requested to be made
during any Borrowing/Issuance Period:
(A) any payment of any Revolving Loan,
Individual Currency Loan, Swing Line Loan or
reimbursement obligation in respect of a Letter of
Credit which is scheduled to be made during such
Borrowing/Issuance Period shall be deemed to have
been made immediately prior to the commencement of
such Borrowing/Issuance Period;
(B) any Letter of Credit which is scheduled to
expire or otherwise terminate during such
Borrowing/Issuance Period shall be deemed to have
expired or otherwise terminated immediately prior
to the commencement of such Borrowing/Issuance
Period;
(C) any Individual Currency Loans which are to
be made during such Borrowing/Issuance Period shall
be deemed to have been made immediately prior to
the making of any Revolving Loans or Swing Line
Loans, or the issuance of any Letters of Credit,
during such Borrowing/Issuance Period; and
(D) any Revolving Loans, Swing Line Loans and
Letters of Credit which are to be made or issued
during such Borrowing/Issuance Period shall be
deemed to have been made and issued simultaneously;
and
(iv) the Availability Percentage during any
Borrowing/Issuance Period shall be determined by the
Administrative Agent in accordance with this Section 2.7(b)
on the first day of such Borrowing/Issuance Period and shall
continue in effect through the last day of such
Borrowing/Issuance Period.
H. Interest
(a) Each Domestic Borrower agrees to pay interest
in respect of the unpaid principal amount of each ABR Advance
made to such Domestic Borrower from the date thereof until
the conversion or maturity (whether by acceleration or other-
wise) of such ABR Advance, at a rate per annum which shall be
equal to the sum of the Applicable Margin plus the Alternate
Base Rate in effect from time to time.
(b) Each Domestic Borrower agrees to pay interest<PAGE>
in respect of the unpaid principal amount of each Eurodollar
Advance made to such Domestic Borrower from the date thereof
until the conversion or maturity (whether by acceleration or
otherwise) of such Eurodollar Advance, at a rate per annum
which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Margin plus the Euro-
dollar Rate for such Interest Period.
(c) Each Borrower agrees to pay interest in re-
spect of the unpaid principal amount of each Core Currency
Euro Advance made to such Borrower from the date thereof un-
til the conversion or maturity (whether by acceleration or
otherwise) of such Core Currency Euro Advance at a rate per
annum which shall, during each Interest Period applicable
thereto, be equal to the sum of the Applicable Margin plus
the Core Currency Euro Rate for such Interest Period.
(d) Each Non-Core Currency Borrower agrees to pay
interest in respect of the unpaid principal amount of each
Individual Currency Loan made to such Non-Core Currency Bor-
rower from the date thereof until the maturity (whether by
acceleration or otherwise) of such Individual Currency Loan
at a rate per annum which shall, during the Interest Period
applicable thereto, be equal to the sum of the Applicable
Margin plus the Individual Currency Rate for such Interest
Period.
(e) Each Swing Line Borrower agrees to pay inter-
est in respect of the unpaid principal amount of each Swing
Line Negotiated Rate Advance made to such Swing Line Borrower
from the date thereof until the maturity (whether by ac-
celeration or otherwise) of such Swing Line Negotiated Rate
Advance at a rate per annum which shall, during the Interest
Period applicable thereto, be equal to the Swing Line Negoti-
ated Rate for such Interest Period.
(f) Each Borrower agrees to pay interest in re-
spect of the unpaid principal amount of each Bid Loan made to
such Borrower from the date thereof until the maturity
(whether by acceleration or otherwise) of such Bid Loan at a
rate per annum which shall, during the Interest Period ap-
plicable thereto, be equal to the Bid Rate for such Interest
Period.
(g) Each Borrower agrees to pay interest in re-
spect of the unpaid principal amount of each Negotiated Rate
Loan made to such Borrower from the date thereof until the
maturity (whether by acceleration or otherwise) of such Nego-
tiated Rate Loan at a rate per annum which shall, during the
Interest Period applicable thereto, be equal to the Negoti-
ated Rate for such Interest Period.
(h) Overdue principal and, to the extent permitted
by law, overdue interest in respect of each Loan shall, in<PAGE>
each case, bear interest at a rate per annum equal to the
rate which is 2% in excess of the rate applicable to such
Loan (or in the case of a Dollar Bid Loan or a Dollar Negoti-
ated Rate Loan, 2% in excess of the Alternate Base Rate, or
in the case of an Alternate Currency Bid Loan, an Alternate
Currency Swing Line Loan, an Alternate Currency Negotiated
Rate Loan, an Individual Currency Loan or a Letter of Credit
designated in an Alternate Currency, 2% in excess of the
all-in rate determined by the applicable Lender, Issuing Bank
or Swing Line Lender, as the case may be, as its cost of
funds in the Applicable Currency or, in the case of such Let-
ter of Credit, the applicable Currency) until paid in full
(whether before of after the entry of a judgment thereon).
If all or any portion of any reimbursement obligation in re-
spect of a Letter of Credit designated in Dollars shall not
be paid when due (whether at the stated maturity thereof, by
acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the Alternate Base
Rate plus 2%, from the date of such nonpayment until paid in
full (whether before or after the entry of a judgment
thereon). Any other overdue amount payable hereunder shall,
to the extent permitted by law, bear interest at a rate per
annum equal to the Alternate Base Rate plus 2% until paid in
full (whether before or after the entry of a judgment
thereon). All such interest shall be payable on demand.
(i) Accrued (and theretofore unpaid) interest
shall be payable (i) in respect of each ABR Advance consti-
tuting a Revolving Loan, quarterly in arrears on each Quar-
terly Payment Date, (ii) in respect of each Eurodollar Ad-
vance and each Core Currency Euro Advance, on the last day of
each Interest Period applicable thereto and, in the case of
an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of
such Interest Period, (iii) in respect of each Bid Loan, Ne-
gotiated Rate Loan, Individual Currency Loan, Swing Line Ne-
gotiated Rate Advance and ABR Advance made as a Swing Loan,
on the last day of the Interest Period applicable thereto,
and (iv) in respect of each Loan, on any repayment or prepay-
ment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on
demand.
(j) The Administrative Agent shall determine the
respective interest rate for each Interest Period applicable
to a Eurodollar Advance or Core Currency Euro Advance for
which such determination is being made and shall promptly no-
tify the applicable Borrower and the Lenders thereof.
(k) Interest on all Loans shall be calculated on
the basis of a 360 day year for the actual number of days
elapsed except that interest on ABR Advances to the extent
based on the BNY Rate, interest on Core Currency Euro Ad-
vances in Sterling Pounds and interest on Individual Currency<PAGE>
Loans designated in Australian Dollars, Canadian Dollars,
Italian Lira and New Taiwan Dollars shall be calculated on
the basis of a 365 or 366-day year (as the case may be). Any
change in the interest rate on the Loans resulting from a
change in the Alternate Base Rate or the Federal Funds Rate
shall become effective as of the opening of business on the
day on which such change shall become effective. The
Administrative Agent shall, as soon as practicable, notify
the Parent (on behalf of all Borrowers) and the Lenders of
the effective date and the amount of each change in the BNY
Rate, but any failure so to notify shall not in any manner
affect the obligation of the Borrowers to pay interest on the
Loans in the amounts and on the dates required. Each
determination of (i) the Alternate Base Rate, a Eurodollar
Rate or a Core Currency Euro Rate by the Administrative
Agent, (ii) an Individual Currency Rate by the applicable
Lender, and (iii) an all-in cost of funds rate or any rate
based thereon by the Administrative Agent or the Reference
Lender, or such applicable Lender, as the case may be, in
each case pursuant to this Agreement shall be conclusive and
binding on all parties hereto absent manifest error. The
Borrowers acknowledge that to the extent interest payable on
ABR Advances is based on the BNY Rate, such Rate is only one
of the bases for computing interest on loans made by the
Lenders, and by basing interest payable on ABR Advances on
the BNY Rate, the Lenders have not committed to charge, and
the Borrowers have not in any way bargained for, interest
based on a lower or the lowest rate at which the Lenders may
now or in the future make loans to other borrowers.
(l) Decreases in the Applicable Margin resulting
from a change in Pricing Levels I, II, III, IV and/or V shall
become effective upon the delivery by the Parent to the Ad-
ministrative Agent of a certificate of the Responsible
Officer certifying as to a change in the Rating by Moody's or
S&P of the senior unsecured long term debt rating of the
Parent. Increases in the Applicable Margin shall become ef-
fective on the effective date of any downgrade or withdrawal
in the Rating by Moody's or S&P of the senior unsecured long
term debt rating of the Parent.
(m) If the Reference Lender shall for any reason
no longer be a Lender, it shall thereupon cease to be the
Reference Lender. The Administrative Agent shall, by notice
to the Borrowers and the Lenders, designate another Lender as
the Reference Lender so that there shall at all times be at
least one Reference Lender. The Reference Lender shall use
its best efforts to furnish quotations of rates to the Admin-
istrative Agent on a timely basis as contemplated hereby.
I. Termination or Reduction of Aggregate Commitments,
Swing Line Commitment, Individual Currency Commitments and
Letter of Credit Commitment<PAGE>
(a) Voluntary Reductions. The Parent shall have
the right, upon at least three Business Days' prior written
notice to the Administrative Agent, at any time to terminate
the Aggregate Commitments or the Letter of Credit Commitment
or from time to time to reduce permanently the Aggregate Com-
mitments or the Letter of Credit Commitment, provided, how-
ever, that any such reduction shall be in the amount of
$10,000,000 or such amount plus a whole multiple of
$1,000,000 in excess thereof.
(b) Swing Line Commitment. The Parent shall have
the right, upon at least three Business Days' prior written
notice to the Administrative Agent and the Swing Line Lender,
at any time, to reduce permanently the Swing Line Commitment
in whole at any time, or in part from time to time, to an
amount not less than the aggregate principal balance of the
Swing Line Loans then outstanding (after giving effect to any
contemporaneous prepayment thereof) without premium or pen-
alty, provided that each partial reduction of the Swing Line
Commitment shall be in an amount equal to $10,000,000 or such
amount plus a whole multiple of $1,000,000 in excess thereof.
(c) Individual Currency Commitments. The Parent
shall have the right, upon at least three Business Days'
prior written notice to the Administrative Agent and the ap-
plicable Lender, at any time, to reduce permanently any Indi-
vidual Currency Commitment of such Lender in whole at any
time, or in part from time to time, to an amount not less
than the aggregate principal balance of the Individual Cur-
rency Loans of such Lender then outstanding under such Indi-
vidual Currency Commitment (after giving effect to any con-
temporaneous prepayment thereof) without premium or penalty
provided that each partial reduction of such Individual Cur-
rency Commitment shall be in an amount in the applicable Non-
Core Currency having a Dollar Equivalent of approximately
$1,000,000 or such amount plus a whole multiple of ap-
proximately $1,000,000 in excess thereof.
(d) In General. Each reduction of the Aggregate
Commitments shall be applied pro rata according to the
Commitment Percentage of each Lender, and each reduction in
the Letter of Credit Commitment shall be applied pro rata
according to the Availability Percentage of each Lender at
the time of such reduction. Simultaneously with each reduc-
tion of the Aggregate Commitments under this Section, the
Borrowers shall pay the Facility Fee accrued on the amount by
which the Aggregate Commitments have been reduced.
Simultaneously with each reduction of the Aggregate Commit-
ments, the Swing Line Commitment and the Individual Currency
Commitments, the Borrowers shall prepay the Loans as required
by Section 2.10. The Aggregate Commitments shall not be re-
duced below an amount equal to the Aggregate Credit Exposure
(after giving effect to any prepayment of the Loans made si-
multaneously with such reduction of the Aggregate Commit-<PAGE>
ments). The Aggregate Commitments shall not be reduced to the
extent, immediately after giving effect thereto, the
Commitment of any Lender would exceed the sum of (I) the ag-
gregate principal amount of all Revolving Loans then
outstanding from such Lender (determined on the basis of the
Dollar Equivalent for each outstanding Alternate Currency Re-
volving Loan), plus (II) the aggregate principal amount of
all Individual Currency Loans then outstanding from such
Lender (determined on the basis of the Dollar Equivalent of
each such Individual Currency Loan), plus (III) the SL/LC
Credit Exposure of such Lender. The Letter of Credit
Commitment shall not be reduced below an amount equal to the
Letter of Credit Exposure.
J. Prepayments of the Loans
(a) Voluntary Prepayments. Each Borrower may, at
its option, prepay the Loans made to such Borrower without
premium or penalty, (x) in the case of Revolving Loans and
Swing Loans, in full at any time or in part from time to
time, and (y) in the case of Negotiated Rate Loans, Bid Loans
and Individual Currency Loans, in full at any time, in each
case by notifying the Administrative Agent in writing at
least three Business Days prior to the proposed prepayment
date, identifying the Loans to be prepaid as Revolving Loans,
Swing Line Loans, Negotiated Rate Loans, Bid Loans or Indi-
vidual Currency Loans and specifying whether the Loans to be
prepaid consist of ABR Advances, Eurodollar Advances, Core
Currency Euro Advances or Swing Line Negotiated Rate Ad-
vances, or a combination thereof, the amount to be prepaid
and the date of prepayment. Such notice shall be irrevocable
and the amount specified in such notice shall be due and pay-
able on the date specified, together with accrued interest to
the date of such payment on the amount prepaid. Upon receipt
of such notice, the Administrative Agent shall promptly no-
tify each Lender thereof in the case of Revolving Loans, the
Swing Line Lender in the case of Swing Loans and the ap-
plicable Lender or Lenders in the case of Bid Loans, Negoti-
ated Rate Loans and Individual Currency Loans. Each partial
prepayment of ABR Advances pursuant to this subsection shall
be in an aggregate principal amount of $100,000 or such
amount plus a whole multiple of $50,000 in excess thereof,
or, if less, the outstanding principal balance of the ABR
Advances. After giving effect to any partial prepayment with
respect to Eurodollar Advances or Core Currency Euro Advances
which were made (whether as the result of a borrowing or a
conversion) on the same date and which had the same Interest
Period, the outstanding principal amount of such Eurodollar
Advances or Core Currency Euro Advances shall equal (subject
to Section 2.6) $500,000 or such amount plus a whole multiple
of $100,000 in excess thereof (or the Alternate Currency
Equivalent of approximately $500,000 or such amount plus a
whole multiple of approximately $100,000 in excess thereof in
the case of a prepayment of Core Currency Euro Advances). <PAGE>
(b) Mandatory Prepayments of Loans.
(i) Subject to clause (ii) below with respect
to Swing Line Loans and clause (iii) below with respect to
the Individual Currency Loans of each Lender, simultaneously
with each reduction of the Aggregate Commitments under Sec-
tion 2.9, the Borrowers shall prepay the Loans by the amount,
if any, by which the Aggregate Credit Exposure exceeds the
amount of the Aggregate Commitments as so reduced.
(ii) Simultaneously with each reduction of the
Swing Line Commitment under Section 2.9, the Swing Line Bor-
rowers shall prepay the Swing Line Loans by the amount, if
any, by which the outstanding principal balance of the Swing
Line Loans (determined on the basis of the Dollar Equivalent
for each outstanding Alternate Currency Swing Line Loan) ex-
ceeds the amount of the Swing Line Commitment as so reduced.
(iii) Simultaneously with each reduction of
the Individual Currency Commitment of any Lender under Sec-
tion 2.9, the applicable Non-Core Currency Borrower shall
prepay the Individual Currency Loans made by such Lender to
such Non-Core Currency Borrower under such Individual Cur-
rency Commitment by the amount, if any, by which the out-
standing principal balance of such Individual Currency Loans
exceeds the amount of such Individual Currency Commitment as
so reduced.
(iv) If on any date that the Dollar Equivalent
is required to be calculated pursuant to Section 11.6 the
Aggregate Credit Exposure shall exceed the Aggregate Commit-
ments, the Borrowers shall prepay the Loans in an aggregate
principal amount such that immediately after giving effect
thereto, the Aggregate Credit Exposure shall not exceed the
Aggregate Commitments.
(v) If on any date that the Dollar Equivalent
is required to be calculated pursuant to Section 11.6 the
Aggregate Credit Exposure attributable to all Loans and
Letters of Credit designated in Non-Core Currencies shall
exceed $60,000,000, the Borrowers shall prepay such Loans in
an aggregate principal amount such that immediately after
giving effect thereto, the Aggregate Credit Exposure
attributable to all Loans and Letters of Credit designated in
Non-Core Currencies shall not exceed $60,000,000.
(c) In General. If any prepayment is made in re-
spect of any Eurodollar Advance, Core Currency Euro Advance,
Swing Line Negotiated Rate Advance, Individual Currency Loan,
Negotiated Rate Loan or Bid Loan, in whole or in part, prior
to the last day of the Interest Period applicable thereto,
the applicable Borrower agrees to indemnify the Lenders in
accordance with Section 2.15.<PAGE>
K. Bid Loans; Procedure
(a) Each Borrower may make Bid Requests by 12:00
Noon (i) at least two Business Days prior to the proposed
Borrowing Date for one or more Bid Loans. Each Bid Request
shall be given to the Administrative Agent (which shall
promptly on the same day give notice thereof to each Lender
by facsimile of an Invitation to Bid if the Bid Request is
not rejected pursuant to this Section), shall be by telephone
(confirmed in writing promptly on the same day by the de-
livery of a Bid Request signed by the applicable Borrower),
and shall specify (i) the proposed Borrowing Date, which
shall be a Business Day, (ii) the aggregate amount of the
requested Bid Loans (the "Maximum Request") which shall not
(A) exceed an amount which, on the proposed Borrowing Date,
and after giving effect to the proposed Bid Loans, would re-
sult in (x) the Aggregate Credit Exposure exceeding the Ag-
gregate Commitments or (y) the Aggregate Credit Exposure at-
tributable to all Loans and Letters of Credit designated in
Non-Core Currencies exceeding $60,000,000, or (B) with re-
spect to each Bid Loan be less than $500,000 or such amount
plus a whole multiple of $100,000 in excess thereof (or ap-
proximately the Dollar Equivalent thereof in the case of Al-
ternate Currency Bid Loans), (iii) the Bid Interest Period(s)
(up to three Bid Interest Periods may be requested pursuant
to each Bid Request) therefor and the last day of each such
Interest Period and (iv) the Applicable Currency for each Bid
Loan. A Bid Request that does not conform substantially to
the form of Exhibit F shall be rejected, and the Administra-
tive Agent shall promptly notify the applicable Borrower of
such rejection.
(b) Each Lender in its sole discretion may (but is
not obligated to) submit one or more Bids to the Administra-
tive Agent and the Parent not later than 9:30 A.M. (i) one
Business Day prior to the proposed Borrowing Date specified
in such Bid Request in the case of a Bid Loan (such 9:30 A.M.
time on such Business Days each being herein called a "Bid
Submission Deadline"), by fax or in writing, and thereby ir-
revocably offer to make all or any part (any such part re-
ferred to as a "Portion") of any Bid Loan described in the
relevant Bid Request, at a rate of interest per annum (each a
"Bid Rate") specified therein, in an aggregate principal
amount of not less than $500,000 or such amount plus a whole
multiple of $100,000 in excess thereof (or approximately the
Dollar Equivalent thereof in the case of Alternate Currency
Bid Loans), provided that Bids submitted by the Adminis-
trative Agent may only be submitted if the Administrative
Agent notifies the Parent and the applicable Borrower of the
terms of its Bid not later than fifteen minutes prior to the
Bid Submission Deadline. Multiple Bids may be delivered to
and by the Administrative Agent. The aggregate Portions of
Bid Loans for any or all Interest Periods offered by each
Lender in its Bid may exceed the Maximum Request contained in<PAGE>
the relevant Bid Request, provided that each Bid shall set
forth the maximum aggregate amount of the Bid Loans offered
thereby which the applicable Borrower may accept (the
"Maximum Offer"), which Maximum Offer shall not exceed the
Maximum Request.
(c) The Administrative Agent shall promptly give
notice by telephone (promptly confirmed in writing) to the
Parent and the applicable Borrower of all Bids received by
the Administrative Agent which comply in all material re-
spects with this Section prior to the Bid Submission Dead-
line. The applicable Borrower shall, in its sole discretion
but subject to Section 2.11(d), irrevocably accept or reject
any such Bid (or any Portion thereof) not later than 10:30
A.M. one Business Day prior to the proposed Borrowing Date by
notice to the Administrative Agent by telephone (confirmed in
writing in the form of a Bid Accept/Reject Letter promptly
the same day). Promptly on the day of the Bid Submission
Deadline, the Administrative Agent will give notice in the
form of a Bid Loan Confirmation to each Lender that submitted
a Bid as to the extent, if any, that such Lender's Bid shall
have been accepted. If the Administrative Agent fails to re-
ceive notice from the applicable Borrower of its acceptance
or rejection of any Bids at or prior to 10:30 A.M. on the ap-
plicable day, all such Bids shall be deemed to have been re-
jected by the applicable Borrower, and the Administrative
Agent will give to each Lender which submitted a Bid notice
of such rejection by telephone on such day.
(d) If the applicable Borrower accepts a Portion
of a proposed Bid Loan for a single Interest Period at the
Bid Rate provided therefor in a Lender's Bid, such Portion
shall be in a principal amount of $500,000 or such amount
plus a whole multiple of $100,000 in excess thereof (or ap-
proximately the Dollar Equivalent thereof in the case of Al-
ternate Currency Bid Loans), subject to such lesser alloca-
tion as may be made pursuant to the provisions of this sub-
section. The aggregate principal amount of Bid Loans ac-
cepted by the applicable Borrower following Bids responding
to a Bid Request shall not exceed the Maximum Request. The
aggregate principal amount of Bid Loans accepted by the ap-
plicable Borrower pursuant to a Lender's Bid shall not exceed
the Maximum Offer therein contained. If the applicable Bor-
rower accepts any Bid Loans or Portion offered in any Bid,
the applicable Borrower must accept Bids (and Bid Loans and
Portions thereby offered) based exclusively upon the succes-
sively lowest Bid Rates within each Interest Period and no
other criteria. If two or more Lenders submit Bids with
identical Bid Rates for the same Bid Interest Period and the
applicable Borrower accepts any thereof, the applicable Bor-
rower shall, subject to the first three sentences of this
subsection, accept all such Bids as nearly as possible in
proportion to the amounts of such Lender's respective Bids
with identical Bid Rates for such Bid Interest Period, pro-<PAGE>
vided, that if the amount of Bid Loans to be so allocated is
not sufficient to enable each such Lender to make such Bid
Loan (or Portions thereof) in an aggregate principal amount
of $500,000 or such amount plus a whole multiple of $100,000
in excess thereof (or the Dollar Equivalent thereof in the
case of Alternate Currency Bid Loans), the applicable
Borrower shall round the Bid Loans (or Portions thereof) al-
located to such Lender or Lenders as the applicable Borrower
shall select as necessary to a minimum of $500,000 or such
amount plus a whole multiple of $100,000 in excess thereof
(or the Dollar Equivalent thereof in the case of Alternate
Currency Bid Loans).
(e) Each Lender which makes a Bid Loan shall no-
tify the Administrative Agent promptly of the making thereof
(unless the proceeds of such Bid Loan were advanced to the
Administrative Agent).
(f) All notices required by this Section shall be
given in accordance with Section 11.2.
(g) Each Bid Loan shall be due and payable on the
earlier of (x) the last day of the Interest Period applicable
thereto and (y) the Maturity Date.
L. Negotiated Rate Loans; Procedure
(a) If at any time any Borrower, any Lender and
the Parent shall have agreed that such Lender shall make a
Negotiated Rate Loan to such Borrower, such Borrower and the
Parent shall promptly execute and deliver to such Lender a
Negotiated Rate Confirmation Request, specifying (i) the pro-
posed Borrowing Date, which shall be a Business Day, (ii) the
aggregate amount of the requested Negotiated Rate Loan which
shall not (A) exceed an amount which, on the proposed Borrow-
ing Date, and after giving effect to the proposed Negotiated
Rate Loan, would result in (x) the Aggregate Credit Exposure
exceeding the Aggregate Commitments or (y) the Aggregate
Credit Exposure attributable to all Loans and Letters of
Credit designated in Non-Core Currencies exceeding
$60,000,000, or (B) be less than $100,000 or such amount plus
a whole multiple of $50,000 in excess thereof (or ap-
proximately the Dollar Equivalent thereof in the case of Al-
ternate Currency Negotiated Rate Loans), (iii) the applicable
rate of interest therefor (the "Negotiated Rate"), (iv) the
Negotiated Rate Interest Period therefor and the last day of
such Negotiated Rate Interest Period, and (v) the Applicable
Currency therefor. If such Negotiated Rate Confirmation Re-
quest is in all respects satisfactory to such Lender, it
shall promptly sign a copy thereof and deliver a copy thereof
to such Borrower, the Parent and the Administrative Agent
(the "Negotiated Rate Confirmation").
(b) Each Lender which makes a Negotiated Rate Loan<PAGE>
shall notify the Administrative Agent promptly of the making
thereof (unless the proceeds of such Negotiated Rate Loan
were advanced to the Administrative Agent).
(c) All notices required by this Section shall be
given in accordance with Section 11.2.
(d) Each Negotiated Rate Loan shall be due and
payable on the earlier of (x) the last day of the Interest
Period applicable thereto and (y) the Maturity Date.
M. Taxes
(a) Payments to Be Free and Clear. All payments by
each Borrower under the Loan Documents shall be made free and
clear of, and without any deduction or withholding for, any
Indemnified Tax. If any Credit Party or any other Person is
required by any law, rule, regulation, order, directive,
treaty or guideline to make any deduction or withholding
(which deduction or withholding would constitute an Indemni-
fied Tax) from any amount required to be paid by any Credit
Party to or on behalf of any Indemnified Tax Person under any
Loan Document (each a "Required Payment"):
(i) such Credit Party shall notify the Admin-
istrative Agent and such Indemnified Tax Person of any such
requirement or any change in any such requirement as soon as
such Credit Party becomes aware of it;
(ii) such Credit Party shall pay such Indemni-
fied Tax before the date on which penalties attach thereto,
such payment to be made (if the liability to pay is imposed
on such Credit Party) for its own account or (if the li-
ability is imposed on such Indemnified Tax Person) on behalf
of and in the name of such Indemnified Tax Person;
(iii) such Credit Party shall pay to such Indem-
nified Tax Person an additional amount such that such Indem-
nified Tax Person shall receive on the due date therefor an
amount equal to the Required Payment had no such deduction or
withholding been required; and
(iv) such Credit Party shall, within 30 days
after paying such Indemnified Tax, deliver to the Administra-
tive Agent and the applicable Indemnified Tax Person satis-
factory evidence of such payment to the relevant Governmental
Authority.
(b) Other Indemnified Taxes. If an Indemnified Tax
Person or any affiliate thereof is required by any law, rule,
regulation, order, directive, treaty or guideline to pay any
Indemnified Tax (excluding an Indemnified Tax which is sub-
ject to Section 2.13(a)) with respect to any sum paid or pay-
able by any Credit Party to such Indemnified Tax Person under<PAGE>
the Loan Documents:
(i) such Indemnified Tax Person shall notify
such Credit Party of any such payment of Indemnified Tax; and
(ii) such Credit Party shall pay to such Indem-
nified Tax Person the amount of such Indemnified Tax within 5
days of such notice.
(c) Tax on Indemnified Taxes. If any amounts are
payable by a Credit Party in respect of Indemnified Taxes
pursuant to Section 2.13(a) or (b), such Credit Party agrees
to pay to the applicable Indemnified Tax Person, within 5
Business Days of written request therefor, an amount equal to
all Taxes imposed with respect to such amounts as such
Indemnified Tax Person shall determine in good faith are
payable by such Indemnified Tax Person or any affiliate
thereof in respect of such amounts and in respect of any
amounts paid to or on behalf of such Indemnified Tax Person
pursuant to this clause (c).
(d) Exception for Existing Taxes. No amount shall
be required to be paid to any Indemnified Tax Person under
Section 2.13(a)(iii) or (b) with respect to an Indemnified
Tax to the extent that such Indemnified Tax would have been
required to have been paid under any law, rule, regulation,
order, directive, treaty or guideline in effect on the Effec-
tive Date.
(e) U.S. Tax Certificates. Each Lender that is or-
ganized under the laws of any jurisdiction other than the
United States or any political subdivision thereof shall de-
liver to the Administrative Agent for transmission to the
Parent, on or prior to the first Borrowing Date (in the case
of each Lender listed on the signature pages hereof) or on
the effective date of the Assignment and Acceptance Agreement
or master assignment and acceptance agreement pursuant to
which it becomes a Lender in accordance with Section 11.1 or
11.7, (in the case of each other Lender), and at such other
times as may be necessary in the determination of the Parent,
any Credit Party or the Administrative Agent (each in the
reasonable exercise of its discretion), such certificates,
documents or other evidence, properly completed and duly ex-
ecuted by such Lender (including, without limitation, Inter-
nal Revenue Service Form 1001 or Form 4224) to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax under Section 1441 or 1442
of the Code or otherwise (or under any comparable provisions
of any successor statute) with respect to any payments to
such Lender of principal, interest, fees or other amounts
payable under the Loan Documents. No Credit Party shall be
required to pay any additional amount to any such Lender un-
der Section 2.13(a)(iii) if such Lender shall have failed to
satisfy the requirements of the immediately preceding sen-<PAGE>
tence; provided that if such Lender shall have satisfied such
requirements on the first Borrowing Date (in the case of each
Lender listed on the signature pages hereof) or on the effec-
tive date of the Assignment and Acceptance Agreement or mas-
ter assignment and acceptance agreement pursuant to which it
became a Lender (in the case of each other Lender), nothing
in this subsection shall relieve any Credit Party of its ob-
ligation to pay any additional amounts pursuant to Section
2.13(a)(iii) in the event that, as a result of any change in
applicable law (including, without limitation, any change in
the interpretation thereof), such Lender is no longer prop-
erly entitled to deliver certificates, documents or other
evidence at a subsequent date establishing the fact that such
Lender is not subject to withholding as described in the im-
mediately preceding sentence.
(f) Other Tax Certificates. Each Indemnified Tax
Person agrees to use reasonable efforts to deliver to any
Credit Party, promptly upon any request therefor from time to
time by such Credit Party, such forms, documents and informa-
tion as may be required by applicable law, regulation or
treaty from time to time and to file all appropriate forms to
obtain a certificate or other appropriate documents from the
appropriate Governmental Authorities to establish that pay-
ments made in respect of any Alternate Currency Loan or Let-
ter of Credit designated in an Alternate Currency by such
Credit Party can be made without (or at a reduced rate of)
withholding of Taxes, provided, however, that if such Indem-
nified Tax Person is or becomes unable by virtue of any ap-
plicable law, regulation or treaty, to establish such exemp-
tion or reduction, such Credit Party shall nonetheless remain
obligated under Subsection 2.13(a) to pay the amounts
described therein, and provided further, that no Indemnified
Tax Person shall be required to take any action hereunder
which, in the sole discretion of such Indemnified Tax Person,
would cause such Indemnified Tax Person or any affiliate
thereof to suffer a material economic, legal or regulatory
disadvantage.
(g) Adverse Tax Position.
(i) An "Excess Tax" shall be the excess of
(x) the Tax imposed, levied, collected, withheld or assessed
by any Governmental Authority without the United States from
which a payment is made by or on behalf of a Credit Party
subject to an Adverse Tax Position or in which such Credit
Party or an affiliate has an office or is deemed to be doing
business, over (y) the Tax which would be imposed, levied,
collected, withheld or assessed by such Governmental Author-
ity, but for the existence of such Adverse Tax Position.
(ii) An "Adverse Tax Position" with respect to
a Credit Party shall mean a position resulting from the lack
of adequate capitalization or other similar condition with<PAGE>
respect to such Credit Party which, under applicable law or
applicable treaty, results in higher Taxes on payments under
the Loan Documents than would otherwise be imposed.
(iii) All payments by each Borrower under the
Loan Documents shall be made free and clear of, and without
any deduction or withholding for, any Excess Tax. If any
Credit Party or any other Person is required by any law,
rule, regulation, order, directive, treaty or guideline to
make any deduction or withholding on account of any Tax from
any Required Payment with respect to any Indemnified Tax Per-
son and if all or a portion of such Tax represents Excess
Tax:
(A) such Credit Party shall notify the
Administrative Agent and such Indemnified Tax Person of any
such requirement or any change in any such requirement as
soon as such Credit Party becomes aware of it;
(B) such Credit Party shall pay such Ex-
cess Tax before the date on which penalties attach thereto,
such payment to be made (if the liability to pay is imposed
on such Credit Party) for its own account or (if the
liability is imposed on such Indemnified Tax Person) on
behalf of and in the name of such Indemnified Tax Person;
(C) such Credit Party shall pay to such
Indemnified Tax Person an additional amount such that such
Indemnified Tax Person shall receive on the due date therefor
an amount equal to the Required Payment had no such deduction
or withholding been required with respect to such Excess Tax;
and
(D) such Credit Party shall, within 30
days after paying such Excess Tax, deliver to the Administra-
tive Agent and the applicable Indemnified Tax Person
satisfactory evidence of such payment to the relevant
Governmental Authority.
(iv) If an Indemnified Tax Person or any af-
filiate thereof is required by any law, rule, regulation, or-
der, directive, treaty or guideline to pay any Excess Tax
(excluding Excess Tax which is subject to Section
2.13(g)(iii)) with respect to any sum paid or payable by any
Credit Party to such Indemnified Tax Person under the Loan
Documents:
(A) such Indemnified Tax Person shall no-
tify such Credit Party of any such payment of Excess Tax; and
(B) such Credit Party shall pay to such
Indemnified Tax Person the amount of such Excess Tax within 5
Business Days of such notice.<PAGE>
(v) If any amounts are payable by a Credit
Party in respect of Excess Tax pursuant to Section
2.13(g)(iii) or (iv) such Credit Party agrees to pay to the
applicable Indemnified Tax Person, within 5 days of written
request therefor, an amount equal to all Taxes imposed with
respect to such amounts as such Indemnified Tax Person shall
determine are payable by such Indemnified Tax Person or any
affiliate thereof in respect of such amounts and in respect
of any amounts paid to or on behalf of such Indemnified Tax
Person pursuant to this clause (v).
N. Increased Costs, Illegality, etc.
(a) In the event that any Lender with respect to
clauses (ii) and (iii) below or the Administrative Agent, the
Reference Lender, or the applicable Lender, as the case may
be, with respect to clauses (i) and (iv) below shall have de-
termined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto):
(i) on the second Business Day immediately
preceding the making of any requested Eurodollar Ad-
vance, Core Currency Euro Advance or Individual Currency
Loan that, by reason of any changes arising after the
Effective Date affecting the applicable interbank mar-
ket, adequate and fair means do not exist for ascertain-
ing the applicable interest rate on the basis provided
for in the definition of the Eurodollar Rate, the Core
Currency Euro Rate or the Individual Currency Rate, as
the case may be; or
(ii) at any time that such Lender has incurred
increased costs or reductions in the amounts received or
receivable hereunder with respect to any Fixed Rate
Loan, in each case by an amount such Lender deems to be
material, because of any change since the Effective Date
(or in the case of any Bid Loan, subsequent to ac-
ceptance by a Borrower of such Bid Loan, and in the case
of any Negotiated Rate Loan, subsequent to the date of
such Lender's execution of the Negotiated Rate Confirma-
tion for such Negotiated Rate Loan) in any law, rule,
regulation, order or guideline applicable to such Lender
or the compliance by such Lender with any request
(whether or not having the force of law) from any
Governmental Authority made subsequent to the Effective
Date (or in the case of any Bid Loan, subsequent to
acceptance by a Borrower of such Bid Loan, and, in the
case of any Negotiated Rate Loan, subsequent to the date
of such Lender's execution of the Negotiated Rate
Confirmation for such Negotiated Rate Loan) or in the
interpretation or administration thereof and including
the introduction of any new law, rule, regulation,
order, guideline or request, such as, for example, but
not limited to: (A) a change in the basis of taxation of<PAGE>
payment to any Lender of the principal of or interest
on such Fixed Rate Loan or any other amounts payable
hereunder (except for changes in the rate of tax on, or
determined by reference to, the Tax on the Income of
such Lender), or (B) a change in official reserve
(including any marginal, emergency, supplemental, spe-
cial or other reserve) or similar requirements (except
to the extent included in the computation of the respec-
tive Eurodollar Rate, the Core Currency Euro Rate, Swing
Line Negotiated Rate, Negotiated Rate, Individual Cur-
rency Rate or Bid Rate, as the case may be), or any spe-
cial deposit, assessment or similar requirement against
assets of, deposits with or for the account of, or
credit extended by, any Lender (or its Applicable Lend-
ing Office); or
(iii) at any time that the making or continu-
ance of any Fixed Rate Loan has been made (x) unlawful
by any law, rule, regulation or order or (y) impossible
by compliance by any Lender in good faith with any gov-
ernmental directive or request (whether or not having
the force of law); or
(iv) at any time that any Core Currency (other
than Dollars) or any Non-Core Currency, as the case may
be, is not available in sufficient amounts, as deter-
mined in good faith by the Reference Lender in the case
of such Core Currency, and by the applicable Lender in
the case of such Non-Core Currency, to fund any bor-
rowing of Alternate Currency Loans in such Core Currency
or such Non-Core Currency, as the case may be;
then, and in any such event, such Lender, in the case of
clause (ii) or (iii) above, or the Administrative Agent, the
Reference Lender or the applicable Lender, as the case may
be, in the case of clause (i) or (iv) above, shall promptly
give notice (by telephone confirmed in writing) to the Parent
(on behalf of all Borrowers) and, except for the Administra-
tive Agent, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly trans-
mit to each of the other Lenders). Thereafter (w) in the
case of clause (i) above, (A) in the event that Eurodollar
Advances, Core Currency Euro Advances or Individual Currency
Loans are so affected, Eurodollar Advances, Core Currency
Euro Advances or Individual Currency Loans from such ap-
plicable Lender, as the case may be, shall no longer be
available until such time as the Administrative Agent, the
Reference Lender or such applicable Lender, as the case may
be, notifies the Parent and the Lenders that the circum-
stances giving rise to such notice by the Administrative
Agent, the Reference Lender or such applicable Lender, as the
case may be, no longer exist, and any Notice of Borrowing or
Notice of Conversion given by any Borrower with respect to
Eurodollar Advances, Core Currency Euro Advances or Indi-<PAGE>
vidual Currency Loans to be made by such applicable Lender,
as the case may be, which have not yet been incurred (includ-
ing by way of conversion) shall be deemed rescinded by the
applicable Borrower and (B) in the event that any Core Cur-
rency Euro Advance or Individual Currency Loan is so af-
fected, the interest rate for such Core Currency Euro Advance
or such Individual Currency Loan, as the case may be, shall
be determined on the basis provided in the proviso to the
definition of Core Currency Euro Rate or Individual Currency
Rate, as the case may be, (x) in the case of clause (ii)
above, the applicable Borrower shall pay to such Lender,
within 3 days of written demand therefor, such additional
amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender
in its reasonable discretion shall determine) as shall be re-
quired to compensate such Lender for such increased costs or
reductions in amounts received or receivable hereunder (a
written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof, sub-
mitted to such applicable Borrower by such Lender in good
faith shall, absent manifest error, be final and conclusive
and binding on all the parties hereto), (y) in the case of
clause (iii) above, the applicable Borrower shall take one of
the actions specified in Section 2.14(b) and (z) in the case
of clause (iv) above, Core Currency Euro Advances in the af-
fected Core Currency or Individual Currency Loans from the
applicable Lender in the affected Non-Core Currency, as the
case may be, shall no longer be available until such time as
the Reference Lender or such applicable Lender, as the case
may be, notifies the Parent (on behalf of all Borrowers), the
Administrative Agent and the Lenders that the circumstances
giving rise to the notice referred to above by the Reference
Lender or such applicable Lender, as the case may be, to the
Parent (on behalf of all Borrowers) and the Administrative
Agent no longer exists, and any Notice of Borrowing given by
the affected Borrower with respect to such Core Currency Euro
Advances or such Individual Currency Loans, as the case may
be, which have not yet been incurred shall be deemed re-
scinded by such affected Borrower. Each of the Administra-
tive Agent, the Reference Lender and the Lenders agree that
if it gives notice to any Borrower of any of the events de-
scribed in clause (i), (iii) or (iv) above, it shall promptly
notify the Parent (on behalf of all Borrowers) and, in the
case of any such Lender and the Reference Lender, the Admin-
istrative Agent, if such event ceases to exist. If any such
event described in clause (iii) above with respect to Euro-
dollar Advances, Core Currency Euro Advances or Individual
Currency Loans ceases to exist as to a Lender, the obliga-
tions of such Lender, as the case may be, to make Eurodollar
Advances, Core Currency Euro Advances or Individual Currency
Loans and to convert Eurodollar Advances to new Eurodollar
Advances or convert Core Currency Euro Advances to new Core
Currency Euro Advances on the terms and conditions contained
herein shall be reinstated.<PAGE>
(b) At any time that any Fixed Rate Loan is af-
fected by the circumstances described in Section 2.14(a)(ii)
or (iii), the applicable Borrower may (and in the case of an
affected Fixed Rate Loan by the circumstances described in
Section 2.14(a)(iii) shall) either (x) if the affected Fixed
Rate Loan is then being made initially or pursuant to a con-
version, cancel the respective borrowing or conversion by
giving the Administrative Agent telephonic notice (confirmed
in writing) on the same date that the Parent was notified by
the affected Lender or the Administrative Agent pursuant to
Section 2.14(a)(ii) or (iii) or (y) if the affected Fixed
Rate Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent and the af-
fected Lender, (A) in the case of a Eurodollar Advance, re-
quire the affected Lender to convert such Eurodollar Advance
into an ABR Advance as of the end of the Interest Period then
applicable to such Eurodollar Advance or, if earlier, as soon
as practicable within the time required by law and (B) in the
case of a Core Currency Euro Advance, Swing Line Negotiated
Rate Advance, Negotiated Rate Loan, Individual Currency Loan
or Bid Loan, take such action as the affected Lender may rea-
sonably request with a view to minimizing the obligations of
such Borrower under Section 2.15.
(c) If any Lender determines that after the Effec-
tive Date the introduction of or any change in any applicable
law, rule, regulation, order, guideline, directive or compli-
ance by such Lender or any corporation controlling such
Lender with any request (whether or not having the force of
law) from any Governmental Authority concerning capital
adequacy, or any change in interpretation or administration
thereof by any Governmental Authority, in each case made
subsequent to the date hereof, will have the effect of
reducing the rate of return on the capital required to be
maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender's Commitment or
Individual Currency Commitments hereunder or its obligations
under the Loan Documents to a level below that which such
Lender or such corporation could have achieved but for such
application or compliance (taking into account such Lender's
or such corporation's policies with respect to capital ad-
equacy) by an amount deemed by such Lender to be material,
then each of the Borrowers to the extent of its Proportionate
Share and the Parent severally agrees to pay such to such
Lender, within 3 Business Days of its written demand
therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the in-
creased cost to such Lender or such other corporation or the
reduction in the rate of return to such Lender or such other
corporation as a result of such reduction. In determining
such additional amounts, each Lender will act reasonably and
in good faith and will use averaging and attribution methods
which are reasonable, provided that such Lender's reasonable
good faith determination of compensation owing under this<PAGE>
Section 2.14(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each
Lender, upon determining that any additional amounts will be
payable pursuant to this Section 2.14(c), will give prompt
written notice thereof to the Parent (on behalf of all Bor-
rowers), which notice shall show the basis for calculation of
such additional amounts.
(d) Each Lender shall notify the Parent (on behalf
of all Borrowers) of any event occurring after the Effective
Date entitling such Lender to compensation under this Section
2.14 as promptly as practicable, but in any event within 120
days after the officer having primary responsibility for this
Agreement obtains actual knowledge thereof, provided that no
such notice shall be required if such Lender has determined
not to seek compensation under this Section 2.14 as a result
of such event. Each Lender will furnish to each Borrower a
certificate setting forth the basis and amount of each re-
quest by such Lender for compensation under this Section
2.14. Determinations and allocations by any Lender for pur-
poses of this Section 2.14 on its costs or rate of return of
maintaining Loans or its obligation to make Loans, or on
amounts receivable by it in respect of Loans, and of the
amounts required to compensate such Lender under this Section
2.14 shall be prima facie evidence of such determinations and
allocations.
(e) Notwithstanding the foregoing, no Lender shall
be entitled to any compensation described in Section 2.14 un-
less, at the time it requests such compensation, it is the
policy or general practice of such Lender to request compen-
sation for comparable costs in similar circumstances under
comparable provisions of other credit agreements for compa-
rable customers unless specific facts or circumstances ap-
plicable to any Borrower or the transactions contemplated by
the Loan Documents would alter such policy or general prac-
tice, provided that nothing in this Section 2.14(e) shall
preclude a Lender from waiving the collection of similar
costs from one or more of its other customers.
(f) If any Lender fails to give the notice de-
scribed in Section 2.14(d) within 90 days after it obtains
such actual knowledge of the event required to be described
in such notice, such Lender shall, with respect to any com-
pensation that would otherwise be owing to such Lender under
this Section 2.14, only be entitled to payment for increased
costs incurred from and after the date that such Lender does
give such notice.
O. Compensation
Each Borrower shall compensate each Lender, within
3 days of its written demand therefor (which demand shall set
forth the basis for requesting such compensation), for all<PAGE>
reasonable losses, expenses and liabilities, including any
loss, expense or liability (including those related to cur-
rency exchange) incurred by reason of the liquidation or re-
employment of deposits or other funds required by such Lender
to fund its Fixed Rate Loans but excluding any loss of an-
ticipated profit which such Lender may sustain: (i) if for
any reason, a borrowing of, or conversion from or into a
Fixed Rate Loan does not occur on a date specified therefor
in a Notice of Borrowing, a Notice of Conversion, a Negoti-
ated Rate Confirmation or a Bid accepted by a Borrower; (ii)
if any repayment (including any repayment made pursuant to
Section 2.10 or as a result of an acceleration of the Loans
pursuant to Section 9) or conversion of any of such
Borrower's Fixed Rate Loans occurs on a date which is not the
last day of an Interest Period with respect thereto; (iii) if
any prepayment of any of such Borrower's Fixed Rate Loans is
not made on any date specified in a notice of prepayment
given by such Borrower; or (iv) as a consequence of (x) any
other default by such Borrower to repay its Loans when re-
quired by the terms of this Agreement or (y) any election
made pursuant to Section 2.14(b) or 11.1(b).
P. Change of Applicable Lending Office and Applicable
Payment Office
(a) With respect to any Loan of any Lender or any
Letter of Credit, such Lender agrees that on the occurrence
of any event giving rise to the operation of Section 2.13,
Section 2.14(a)(ii) or (iii), Section 2.14(c), Section
2.14(d) or Section 2.22 with respect to such Loan or such
Letter of Credit, it will, if requested by the applicable
Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Ap-
plicable Lending Office or Applicable Payment Office, as the
case may be, for such Loan or such Letter of Credit affected
by such event, provided that such designation is made on such
terms that such Lender and its Applicable Lending Office or
Applicable Payment Office, as the case may be, suffer no eco-
nomic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the op-
eration of such Section. Nothing in this Section shall af-
fect or postpone any of the obligations of any Borrower or
the right of any Lender provided in Sections 2.13, 2.14, 2.15
and 2.22.
(b) Each Lender shall have the right at any time
and from time to time to transfer any of its Loans to a dif-
ferent office, provided that such Lender shall promptly no-
tify the Administrative Agent and the Parent (on behalf of
all Borrowers) of any such change of office. Such office
shall thereupon become such Lender's Applicable Lending Of-
fice for such Loan provided, however, that no such Lender
shall be entitled to receive any greater amount under Section
2.13, Section 2.14(a)(ii) or (iii), Section 2.14(c) or Sec-<PAGE>
tion 2.22 as a result of a transfer of any such Loans to a
different office of such Lender than it would be entitled to
immediately prior thereto unless such claim would have arisen
even if such transfer had not occurred.
Q. Survival of Certain Obligations
The obligations of the Borrowers under Sections
2.13, 2.14, 2.15, 2.22, 11.5 and 11.10 shall survive the ter-
mination of the Aggregate Commitments, the Swing Line Commit-
ment, the Individual Currency Commitments, the Letter of
Credit Commitment the payment of the Loans, the reimbursement
obligations in respect of the Letters of Credit and all other
amounts payable under the Loan Documents.
R. Use of Proceeds
The proceeds of the Loans shall be used to refi-
nance the Indebtedness set forth on Schedule 5.8 and for gen-
eral corporate purposes of the Parent and its Subsidiaries.
The uses to which the proceeds of the Loans are put shall
conform with the provisions of Section 4.11.
S. Letter of Credit Sub-Facility
(a) Subject to the terms and conditions of this
Agreement, the Issuing Bank agrees, in reliance on the agree-
ment of the other Lenders set forth in Section 2.20, to issue
standby letters of credit in Core Currencies (the "Letters of
Credit"; each a "Letter of Credit") during the Commitment Pe-
riod for the account of one or more of the Letter of Credit
Applicants, provided, however, that, at the request of any
Letter of Credit Applicant, the Issuing Bank may, in its sole
discretion, issue one or more Letters of Credit for the ac-
count of such Letter of Credit Applicant in one or more Non-
Core Currencies. The Letter of Credit Exposure at any one
time outstanding shall not exceed the lesser of (i) the
amount of the Letter of Credit Commitment and (ii) the
excess, if any, of the sum of the Aggregate Commitments over
the sum of the aggregate outstanding principal amount of all
Loans (determined on the basis of the Dollar Equivalent for
each outstanding Alternate Currency Loan). The Letter of
Credit Exposure at any one time outstanding attributable to
all Letters of Credit issued in Non-Core Currencies shall not
exceed the excess, if any, of $60,000,000 over the Aggregate
Credit Exposure at such time attributable to all Loans
designated in Non-Core Currencies. The sum of the aggregate
principal amount of the Individual Currency Loans of all
Lenders at any one time outstanding in any Non-Core Currency
and the Letter of Credit Exposure at such time attributable
to all Letters of Credit issued in such Non-Core Currency
(determined on the basis of the Dollar Equivalent of each
such Individual Currency Loan and each such Letter of Credit)
shall not exceed $5,000,000. Each Letter of Credit shall<PAGE>
have an expiration date which shall not exceed the earlier of
(x) twelve months from the date of issuance thereof and (y)
30 days immediately preceding the Maturity Date. No Letter
of Credit shall be issued, and no amendment to any Letter of
Credit shall be issued which would increase the stated amount
or extend the expiration date of such Letter of Credit, (i)
if the Administrative Agent or any Lender by notice to the
Administrative Agent and the applicable Letter of Credit Ap-
plicant and the Parent no later than 1:00 P.M. one Business
Day prior to the requested date of issuance of such Letter of
Credit or amendment, shall have determined that any of the
applicable conditions set forth in Sections 5 and 6 have not
been satisfied and such conditions remain unsatisfied as of
the requested time of issuing such Letter of Credit or
amendment or (ii) to the extent that immediately after giving
effect thereto the Aggregate Credit Exposure would exceed the
Aggregate Commitments (each a "Non-Issuance Event").
(b) Each Letter of Credit shall be issued for the
account of the applicable Letter of Credit Applicant for gen-
eral corporate purposes of such Letter of Credit Applicant
and its Subsidiaries. Such Letter of Credit Applicant and
the Parent shall give the Administrative Agent a Letter of
Credit Request for the issuance of such Letter of Credit by
11:00 A.M. three Business Days prior to the requested date of
issuance. Such Letter of Credit Request shall be executed by
such Letter of Credit Applicant and the Parent, and shall
specify (i) the beneficiary of such Letter of Credit and the
obligations of such Letter of Credit Applicant or any of its
Subsidiaries, as the case may be, in respect of which such
Letter of Credit is to be issued, (ii) such Letter of Credit
Applicant's proposal as to the conditions under which a draw-
ing may be made under such Letter of Credit and the documen-
tation to be required in respect thereof, (iii) the maximum
amount to be available under such Letter of Credit, (iv) the
requested date of issuance and (v) the applicable Currency.
Upon receipt of such Letter of Credit Request from such Let-
ter of Credit Applicant and the Parent, the Administrative
Agent shall promptly notify the Issuing Bank and each other
Lender thereof. Each Letter of Credit shall be in form and
substance reasonably satisfactory to the Issuing Bank, and
adequate and fair means in the sole discretion of the Issuing
Bank shall exist for the issuance thereof, with such provi-
sions with respect to the conditions under which a drawing
may be made thereunder and the documentation required in re-
spect of such drawing as the Issuing Bank shall reasonably
require and as may be acceptable to such Letter of Credit
Applicant and the Parent. Such Letter of Credit shall be
used solely for the purposes described therein and herein.
The Issuing Bank shall, on the proposed date of issuance and
subject to the other terms and conditions of this Agreement,
issue such Letter of Credit.
(c) Each payment by the Issuing Bank of a draft<PAGE>
drawn under a Letter of Credit designated in a Core Currency
shall give rise to an obligation on the part of the ap-
plicable Letter of Credit Applicant to reimburse the Issuing
Bank immediately for the amount thereof at its Applicable
Payment Office in such Core Currency.
(d) Each payment by the Issuing Bank of a draft
drawn under a Letter of Credit designated in a Non-Core Cur-
rency shall give rise to an obligation on the part of the ap-
plicable Letter of Credit Applicant to reimburse the Issuing
Bank immediately for the amount thereof in Dollars, at such
office as the Issuing Bank shall designate to the Administra-
tive Agent, the Parent and such Letter of Credit Applicant,
in an amount based upon the all-in cost of funds in Dollars
of the Issuing Bank to fund such draft (each a "Dollar Reim-
bursement Amount"). In connection with each obligation of a
Letter of Credit Applicant to pay a Dollar Reimbursement
Amount under this Section 2.19(d), the Issuing Bank shall
deliver to such Letter of Credit Applicant, the Parent and
the Administrative Agent a written statement setting forth
such Dollar Reimbursement Amount. The Issuing Bank's
determination of such Dollar Reimbursement Amount shall be
conclusive absent manifest error.
T. Letter of Credit Participation and Funding Commit-
ments
(a) Each Lender hereby unconditionally and ir-
revocably, severally for itself only and without any notice
to or the taking of any action by such Lender, takes from
time to time an undivided participating interest in the
obligations of the Issuing Bank under and in connection with
each Letter of Credit in an amount equal to such Lender's
Availability Percentage at such time of the amount of such
Letter of Credit. Each Lender from time to time shall be
liable to the Issuing Bank for its Availability Percentage
at such time of the unreimbursed amount of any draft drawn
and honored under each Letter of Credit. Each Lender from
time to time shall also be liable for an amount equal to the
product of its Availability Percentage at such time and any
amounts paid by the applicable Letter of Credit Applicant
pursuant to Section 2.21 that are subsequently rescinded or
avoided, or must otherwise be restored or returned. Such li-
abilities shall be unconditional and without regard to the
occurrence of any Default or Event of Default or the compli-
ance by the Parent and the Borrowers with any of their
respective obligations under the Loan Documents or any other
circumstances.
(b) The Administrative Agent will promptly notify
each Lender (which notice shall be promptly confirmed in
writing) of the date and the amount of any draft presented
under any Letter of Credit with respect to which full reim-
bursement of payment is not made by the applicable Letter of<PAGE>
Credit Applicant as provided in Sections 2.19(c) or 2.19(d),
as the case may be, and forthwith upon receipt of such no-
tice, and provided that no Non-Issuance Event shall have
occurred and be continuing with respect to such Letter of
Credit, such Lender (other than the Issuing Bank in its
capacity as a Lender) shall make available to the
Administrative Agent for the account of the Issuing Bank its
Availability Percentage at such time of the amount of such
unreimbursed draft or, if such Letter of Credit is designated
in a Non-Core Currency, the applicable Dollar Reimbursement
Amount, at the Applicable Payment Office of the Administra-
tive Agent in the applicable Core Currency or, if such Letter
of Credit is designated in a Non-Core Currency, at the
applicable office designated by the Administrative Agent
pursuant to Section 2.19(d) in Dollars, and, in each case, in
immediately available funds. The Administrative Agent shall
distribute the payments made by each Lender (other than the
Issuing Bank in its capacity as a Lender) pursuant to the
immediately preceding sentence to the Issuing Bank promptly
upon receipt thereof in like funds as received. Each Lender
shall indemnify and hold harmless the Administrative Agent
and the Issuing Bank from and against any and all losses, li-
abilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses (including rea-
sonable attorneys' fees and expenses) resulting from any
failure on the part of such Lender to provide, or from any
delay in providing, the Administrative Agent with such
Lender's Availability Percentage of the amount of any payment
made by the Issuing Bank under a Letter of Credit in ac-
cordance with this clause (b) above (except in respect of
losses, liabilities or other obligations suffered by the Is-
suing Bank resulting from the gross negligence or willful
misconduct of the Issuing Bank or the Administrative Agent,
as the case may be). If a Lender does not make available to
the Administrative Agent when due such Lender's Availability
Percentage at such time of any unreimbursed payment made by
the Issuing Bank under a Letter of Credit (other than pay-
ments made by the Issuing Bank by reason of its gross negli-
gence or willful misconduct), such Lender shall be required
to pay interest to the Administrative Agent for the account
of the Issuing Bank on such Lender's Availability Percentage
at such time of such payment at a rate of interest per annum
equal to the Federal Funds Rate (or, in the case of any
Letter of Credit designated in a Core Currency (other than
Dollars), at a rate based upon the all-in cost of funds for
the applicable Non-Core Currency) from the date such Lender's
payment is due until the date such payment is received by the
Administrative Agent. The Administrative Agent shall distrib-
ute such interest payments to the Issuing Bank upon receipt
thereof in like funds as received.
(c) Whenever the Administrative Agent or the Issu-
ing Bank is reimbursed by any Letter of Credit Applicant, for
the account of the Issuing Bank, for any payment under a Let-<PAGE>
ter of Credit and such payment relates to an amount previ-
ously paid by a Lender in respect of its Availability Per-
centage of the amount of such payment under such Letter of
Credit, the Administrative Agent or the Issuing Bank, as the
case may be, will promptly pay over such payment to such
Lender.
U. Absolute Obligation with respect to Letter of Credit
Payments
The obligation of each Letter of Credit Applicant
to reimburse the Administrative Agent for the account of the
Issuing Bank in respect of each Letter of Credit issued for
the account of such Letter of Credit Applicant for each pay-
ment under or in respect of such Letter of Credit shall be
absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to
payment which such Letter of Credit Applicant or any of its
Subsidiaries may have or have had against the beneficiary of
such Letter of Credit, the Administrative Agent, the Issuing
Bank, as issuer of such Letter of Credit, any Lender, the
Swing Line Lender or any other Person, including any defense
based on the failure of any drawing to conform to the terms
of such Letter of Credit, any drawing document proving to be
forged, fraudulent or invalid, or the legality, validity,
regularity or enforceability of such Letter of Credit.
V. Increased Costs Based on Letters of Credit
Without limiting the provisions of Section 2.14, if
any law, rule, regulation, order, guideline or request or any
change in the interpretation or application thereof by any
Governmental Authority charged with the administration
thereof or GAAP shall either (a) impose, modify or make ap-
plicable any reserve, special deposit, assessment or similar
requirement against any Letter of Credit issued or partici-
pated in by any Lender, or (b) impose on the Administrative
Agent, the Issuing Bank or such Lender, as the case may be,
any other condition regarding such Letter of Credit (except
for imposition of, or changes in the rate of, the Tax on the
Income of the Administrative Agent, the Issuing Bank or such
Lender, as the case may be) and the result of any event re-
ferred to in clause (a) or (b) above shall be to increase the
cost to the Issuing Bank (or any successor thereto as issuer
of such Letter of Credit) of issuing or maintaining such Let-
ter of Credit or the cost to any Lender of its obligations
pursuant to Section 2.20, or the cost to the Administrative
Agent of performing its functions hereunder with respect to
such Letter of Credit, in any case by an amount which the
Administrative Agent, the Issuing Bank or such Lender, as the
case may be, deems material, then, upon demand by the Admin-
istrative Agent, the Issuing Bank or such Lender, as the case
may be, the applicable Letter of Credit Applicant shall im-
mediately pay to the Administrative Agent, the Issuing Bank<PAGE>
or such Lender, as the case may be, from time to time as
specified by the Administrative Agent, the Issuing Bank or
such Lender, as the case may be, additional amounts which
shall be sufficient to compensate the Administrative Agent,
the Issuing Bank or such Lender, as the case may be, for such
increased cost. A statement in reasonable detail as to such
increased cost incurred by the Administrative Agent, the Is-
suing Bank or such Lender, as the case may be, as a result of
any event mentioned in clauses (a) or (b) above, submitted by
the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, to such Letter of Credit Applicant shall be
conclusive, absent manifest error, as to the amount thereof.
W. Borrower Addenda
Provided that no Default or Event of Default has
occurred and is continuing, the Parent may direct that any of
its wholly-owned Subsidiaries which is not then a Borrower
become a Borrower by submitting a Borrower Addendum to the
Administrative Agent with respect to such Subsidiary duly ex-
ecuted by each of the Parent and such Subsidiary together
with a certificate, dated the date of such Borrower Addendum
of the Secretary or Assistant Secretary of such Subsidiary
(i) attaching a true and complete copy of the resolutions of
its Board of Directors and of all documents evidencing other
necessary corporate action (in form and substance satisfac-
tory to the Administrative Agent) taken by it to authorize
such Borrower Addendum, the Loan Documents and the transac-
tions contemplated thereby, (ii) attaching a true and com-
plete copy of its certificate of incorporation, by-laws or
other organizational documents, (iii) setting forth the in-
cumbency of its officer or officers who may sign the
Borrower Addendum, including therein a signature specimen of
such officer or officers, (iv) an opinion of foreign local
counsel to such Subsidiary in all respects reasonably
satisfactory to the Administrative Agent and (v) attaching a
certificate of good standing (or equivalent) issued by the
jurisdiction of its incorporation. If any such document is
not in English, such document shall be accompanied by a
certified English translation thereof. Upon receipt of a
Borrower Addendum and the supporting documentation referred
to above, the Administrative Agent shall confirm such Bor-
rower Addendum by signing a copy thereof and shall deliver a
copy thereof to the Parent and each Lender. Thereupon the
Subsidiary which executed such Borrower Addendum shall become
a "Borrower" hereunder. In the event that such additional
Borrower is not a corporation organized under the laws of a
jurisdiction in which any other Borrower is organized (and
whose principal office is not located in a jurisdiction in
which any other Borrower's principal office is located), this
Agreement and the other Loan Documents will be deemed amended
by adding definitions comparable to the definitions ap-
plicable to each other Subsidiary Borrower, such definitions
to be as set forth in the applicable Borrower Addendum.<PAGE>
X. Records
(a) Lender's Records. Each Lender will note on its
internal records with respect to each Loan made by it (i) the
date and amount of such Loan, (ii) whether such Loan is a Re-
volving Loan, Swing Line Loan, Individual Currency Loan, Ne-
gotiated Rate Loan or Bid Loan, (iii) the identity of the
Borrower to whom such Loan was made, (iv) the interest rate
(other than in the case of an ABR Advance), Individual Cur-
rency Rate, Negotiated Rate or Bid Rate and Interest Period,
if applicable, applicable to such Loan and (v) each payment
and prepayment of the principal thereof.
(b) Administrative Agent's Records. The Adminis-
trative Agent shall keep records regarding the Loans, the
Letters of Credit and this Agreement in accordance with its
customary procedures for agented credits.
(c) Prima Facie Evidence. The entries made in the
records maintained pursuant to subsections (a) and (b) above
shall, to the extent not prohibited by applicable law, be
prima facie evidence of the existence and amount of the obli-
gations of the Parent and each Borrower recorded therein;
provided, however, that the failure of the Administrative
Agent or any Lender, as the case may be, to make any notation
on its records shall not affect the Parent's or the respec-
tive Borrower's obligations in respect of the Loans, the Let-
ters of Credit or the Loan Documents.
Y. Replacement of Lender
If (i) any Borrower is obligated to pay to any
Lender any amount under Section 2.13(a), (b) or (c) and such
payment is attributable solely to any change since the Effec-
tive Date (in the case of each Lender listed on the signature
pages hereof) or since the effective date of the Assignment
and Acceptance Agreement pursuant to which it became a Lender
(in the case of each other Lender) in any applicable law,
rule, regulation, order, directive, treaty or guideline
(whether or not having the force of law) or in the
interpretation or administration thereof (including the
introduction of any new law, rule, regulation, order,
directive, treaty or guideline), (ii) any Lender shall have
failed to make available a Loan on the date on which and in
the amount in which it was obligated to do so and shall not
have cured such failure within three Business Days or (iii)
any Lender shall have demanded any payment under Section 2.14
or excused itself from funding a Loan pursuant to Section
2.14, the Company shall have the right, in accordance with
the requirements of Section 11.7(b), if no Default or Event
of Default shall exist to replace up to two such Lenders
(each a "Replaced Lender") with one or more other assignees
(each, a "Replacement Lender"), reasonably acceptable to the
Swing Line Lender and the Issuing Bank, provided that (I) at<PAGE>
the time of any replacement pursuant to this Section, the
Replacement Lender shall enter into one or more Assignment
and Acceptance Agreements pursuant to Section 11.7(b) (with
the Assignment Fee payable pursuant to said Section 11.7(b)
to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in
Letters of Credit by, the Replaced Lender and, in connection
therewith, shall pay to (w) the Replaced Lender in respect
thereof an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, (B) an amount equal
to all drawings on all Letters of Credit that have been
funded by (and not reimbursed to) such Replaced Lender, to-
gether with all then unpaid interest with respect thereto at
such time and (C) an amount equal to all accrued, but
theretofore unpaid, fees owing to the Replaced Lender
pursuant to Sections 3.1 and 3.2, (x) the Issuing Bank an
amount equal to such Replaced Lender's Commitment Percentage
of all drawings (which at such time remains an unpaid
drawing) to the extent such amount was not theretofore funded
by such Replaced Lender, (y) the Swing Line Lender an amount
equal to such Replaced Lender's Commitment Percentage of any
Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Lender and (z) the
Administrative Agent an amount equal to all amounts owed by
such Replaced Lender to the Administrative Agent under this
Agreement, including, without limitation, an amount equal to
the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, a corresponding
amount of which was made available by the Administrative
Agent to the applicable Borrower(s) pursuant to Section
2.4(e) and which has not been repaid to the Administrative
Agent by such Replaced Lender or the applicable Borrower(s)
and (II) all obligations of the Borrowers owing to the
Replaced Lender (other than those specifically described in
clause (I) above in respect of which the assignment purchase
price has been, or is concurrently being, paid) shall be paid
in full to such Replaced Lender concurrently with such re-
placement. Upon the execution of the respective Assignment
and Acceptance Agreements and the payment of amounts referred
to in clauses (i) and (ii) of this Section 2.25, the Re-
placement Lender shall become a Lender hereunder and the Re-
placed Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 2.13,
2.14, 2.15, 2.22, 11.5 and 11.10), which shall survive as to
such Replaced Lender.
III. FEES
A. Facility Fee<PAGE>
The Parent agrees to pay to the Administrative
Agent, for the account of the Lenders in accordance with each
Lender's Commitment Percentage, a fee (the "Facility Fee"),
for each day from and after the Effective Date, equal to the
product of (x) the Aggregate Commitments in effect as at the
end of such day or, if no Commitments then exist, the
Aggregate Commitments on the last day on which Commitments
did exist, and (y) the applicable percentage set forth below
based upon the Pricing Level in effect as at the end of such
day:
<TABLE>
<CAPTION>
Pricing Level Facility Fee Percentage
---------------- -----------------------
<S> <C>
Pricing Level I 0.1000%
Pricing Level II 0.1500
Pricing Level III 0.1750
Pricing Level IV 0.2000
Pricing Level V 0.3000.
</TABLE>
The Facility Fee shall be (i) calculated on the basis of
a 360-day year for the actual number of days elapsed, (ii)
payable quarterly in arrears on each Quarterly Payment Date,
commencing on the first such day following the Effective
Date, and on the date that the Aggregate Commitments shall
expire or otherwise terminate (or in the event that the
Aggregate Commitments have expired or otherwise terminated,
on the date that the Aggregate Credit Exposure has been
reduced to $0).
B. Letter of Credit Commissions
The Parent agrees to pay to the Administrative
Agent, for the account of the Lenders, commissions (the
"Letter of Credit Commissions") with respect to the issued
and outstanding Letters of Credit, for each day from and
after the Effective Date, equal to, with respect to each
Lender, the product of (x) the Letter of Credit Exposure as
at the end of such day and (y) the Availability Percentage of
such Lender as at the end of such day multiplied by (z) the
applicable percentage set forth below based upon the Pricing
Level in effect as at the end of such day:
<TABLE>
<CAPTION>
Letter of Credit
Pricing Level Commission Percentage
------------------ -----------------------
<S> <C> <PAGE>
Pricing Level I 0.2000%
Pricing Level II 0.2700%
Pricing Level III 0.2750%
Pricing Level IV 0.4000%
Pricing Level V 0.4000%
</TABLE>
The Letter of Credit Commissions shall be (i) calculated
on the basis of a 360-day year for the actual number of days
elapsed, (ii) payable quarterly in arrears on each Quarterly
Payment Date and on the date that the Letter of Credit
Commitments shall expire and the Letter of Credit Exposure is
$0, and (iii) nonrefundable.
C. Administrative Agent's and Issuing Bank's Fees
(a) The Parent agrees to pay to the Administrative
Agent, for its own account, such other fees as have been
agreed to in writing from time to time by the Parent and the
Administrative Agent.
(b) The Parent agrees to pay to the Issuing Bank,
for its own account, such other fees as have been agreed to
in writing from time to time by the Parent and the Issuing
Bank.
IV. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the
Lenders to enter into this Agreement and to make the Loans,
the Swing Line Lender to make the Swing Line Loans and the
Lenders to participate therein, and the Issuing Bank to
issue the Letters of Credit and the Lenders to participate
therein, the Parent and the Borrowers make the following
representations and warranties to the Administrative Agent,
the Issuing Bank, the Swing Line Lender and the Lenders:
A. Subsidiaries; Capital Stock
As of the date of this Agreement, the Parent has
only the Subsidiaries set forth on, and the authorized,
issued and outstanding capital stock of the Parent and each
such Subsidiary (or partnership or other interests, as the
case may be) is as set forth on, Schedule 4.1. The shares
of, or partnership or other interests in, each Subsidiary of
the Parent are owned beneficially and of record by the Parent
or another Subsidiary of the Parent, are free and clear of
all Liens except as otherwise permitted by Section 8.3, and
are duly authorized, validly issued, fully paid and
nonassessable except, in the case of any Subsidiary organized
under the laws of the State of New York, for any liability
that may arise under the provisions of Section 630 of the
Business Corporation Law of the State of New York. As of the<PAGE>
date of this Agreement, except as set forth on Schedule 4.1,
(a) neither the Parent nor any of its Subsidiaries has issued
any securities convertible into, or options or warrants for,
any common or preferred equity securities thereof, (b) there
are no agreements, voting trusts or understandings binding
upon the Parent or any of its Subsidiaries with respect to
the voting securities of the Parent or any of its
Subsidiaries or affecting in any manner the sale, pledge, as-
signment or other disposition thereof, including any right of
first refusal, option, redemption, call or other right with
respect thereto, whether similar or dissimilar to any of the
foregoing, and (c) the Parent owns, directly or indirectly,
all of the outstanding capital stock of each of its
Subsidiaries.
B. Existence and Power
Each of the Parent and each of its Subsidiaries is
duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, has all requi-
site power and authority to own its Property and to carry on
its business as now conducted, and is in good standing and
authorized to do business in each jurisdiction in which the
failure so to qualify could reasonably be expected to have a
Material Adverse effect.
C. Authority
Each of the Parent and each of its Subsidiaries
has full power and authority to enter into, execute, deliver
and perform the terms of the Loan Documents to which it is a
party, all of which have been duly authorized by all proper
and necessary corporate or partnership action, as the case
may be, and are in full compliance with its certificate of
incorporation and by-laws or partnership agreement, as the
case may be. No consent or approval of, or other action by,
shareholders of the Parent, any Borrower, any Governmental
Authority or any other Person, which has not already been
obtained, is required to authorize in respect of the Parent
or any of its Subsidiaries, or is required in connection with
the execution, delivery and performance by the Parent and
each of its Subsidiaries of, the Loan Documents to which it
is a party, or is required as a condition to the enforce-
ability against the Parent or such Subsidiary of the Loan
Documents to which it is a party.
D. Binding Agreement
The Loan Documents constitute the valid and
legally binding obligations of the Parent and each of its
Subsidiaries to the extent the Parent or such Subsidiary, as
the case may be, is a party thereto, enforceable in ac-
cordance with their respective terms, except as such enforce-
ability may be limited by applicable bankruptcy, insolvency,<PAGE>
reorganization, moratorium or similar laws affecting the en-
forcement of creditors' rights generally and by equitable
principles relating to the availability of specific per-
formance as a remedy and except to the extent that
indemnification obligations may be limited by federal or
state securities laws or public policy relating thereto.
E. Litigation
Except as set forth on Schedule 4.5, there are no
actions, suits, arbitration proceedings or claims (whether
purportedly on behalf of the Parent, any of its Subsidiaries
or otherwise) pending or, to the knowledge of the Parent and
the Borrowers, threatened against the Parent or any of its
Subsidiaries, or maintained by the Parent or any of its Sub-
sidiaries, or which may affect the Property of the Parent or
any of its Subsidiaries, at law or in equity, before any Gov-
ernmental Authority which could reasonably be expected to
have a Material Adverse effect. There are no proceedings
pending or, to the knowledge of the Parent and the Borrowers,
threatened against the Parent or any of its Subsidiaries (a)
which call into question the validity or enforceability of,
or otherwise seek to invalidate any Loan Document, or (b)
which might, individually or in the aggregate, materially and
adversely affect any of the transactions contemplated by any
Loan Document.
F. No Conflicting Agreements
(a) Neither the Parent nor any of its Subsidiaries
is in default under any agreement to which it is a party or
by which it or any of its Property is bound the effect of
which could reasonably be expected to have a Material Adverse
effect. No notice to, or filing with, any Governmental
Authority is required for the due execution, delivery and
performance by the Parent or any of its Subsidiaries of the
Loan Documents to which it is a party (except those notices
or filings which have already been made).
(b) No provision of any statute, rule, regulation,
judgment, decree or order, or any existing material mortgage,
indenture, contract or agreement, in each case binding on the
Parent or any of its Subsidiaries or affecting the Property
of the Parent or any of its Subsidiaries conflicts with, or
requires any consent which has not already been obtained
under, or would in any way prohibit the execution, delivery
or performance by the Parent or any of its Subsidiaries of
the terms of, any Loan Document. The execution, delivery or
performance by the Parent and each of its Subsidiaries of the
terms of each Loan Document to which it is a party will not
constitute a default under, or result in the creation or
imposition of, or obligation to create, any Lien upon the
Property of the Parent or any of its Subsidiaries pursuant to
the terms of any such mortgage, indenture, contract or<PAGE>
agreement which defaults or Liens, individually or in the
aggregate, would have or result in a Material Adverse effect.
G. Taxes
The Parent and each of its Subsidiaries has filed
or caused to be filed all tax returns, and has paid, or has
made adequate provision for the payment of, all taxes shown
to be due and payable on said returns or in any assessments
made against them, the failure of which to file or pay could
reasonably be expected to have a Material Adverse effect, and
no tax Liens have been filed against the Parent or any of its
Subsidiaries and no claims are being asserted with respect to
such taxes which are required by GAAP (as in effect on the
Effective Date) to be reflected in the Financial Statements
and are not so reflected therein. The charges, accruals and
reserves on the books of the Parent and each of its
Subsidiaries with respect to all Federal, state, local,
foreign and other taxes are considered by the management of
the Parent and the Borrowers to be adequate, and neither the
Parent nor any Borrower knows of any unpaid assessment which
is or might be due and payable against it or any of its
Subsidiaries or any Property of the Parent or any of its
Subsidiaries, except such thereof as are being contested in
good faith and by appropriate proceedings diligently
conducted, and for which adequate reserves have been set
aside in accordance with GAAP.
H. Compliance with Applicable Laws; Filings
Neither the Parent nor any of its Subsidiaries is
in default with respect to any judgment, order, writ, injunc-
tion, decree or decision of any Governmental Authority which
default could reasonably be expected to have a Material Ad-
verse effect. The Parent and each of its Subsidiaries is
complying with all applicable statutes, rules and regulations
of all Governmental Authorities, a violation of which could
reasonably be expected to have a Material Adverse effect.
The Parent and each of its Subsidiaries has filed or caused
to be filed with all Governmental Authorities all reports,
applications, documents, instruments and information required
to be filed pursuant to all applicable laws, rules, regula-
tions and requests which, if not so filed, could reasonably
be expected to have a Material Adverse effect. Each
Borrower, prior to each borrowing by it hereunder in any
jurisdiction, has obtained all necessary approvals and
consents of, and has filed or caused to be filed all reports,
applications, documents, instruments and information required
to be filed pursuant to all applicable laws, rules,
regulations and requests of, all Governmental Authorities in
connection with such borrowing in such jurisdiction.
I. Governmental Regulations<PAGE>
Neither the Parent nor any of its Subsidiaries nor
any corporation controlling the Parent or any of its Subsid-
iaries or under common control with the Parent or any of its
Subsidiaries is subject to regulation under the Public Util-
ity Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, in each case as amended, or
is subject to any statute or regulation which regulates the
incurrence of Indebtedness, including statutes or regulations
relative to common or contract carriers or to the sale of
electricity, gas, steam, water, telephone, telegraph or other
public utility services.
J. Property
Each of the Parent and each of its Subsidiaries
has good and marketable title to, or a valid leasehold inter-
est in, all of its real Property, and is the owner of, or has
a valid lease of, all personal property, in each case which
is material to the Parent and its Subsidiaries taken as a
whole, subject to no Liens, except such Liens permitted by
Section 8.3. All leases of Property to each of the Parent
and each of its Subsidiaries are in full force and effect,
the Parent or such Subsidiary enjoys quiet and undisturbed
possession under all leases of real property and neither the
Parent nor any of its Subsidiaries is in default beyond any
applicable grace period of any provision thereof, the effect
of which could reasonably be expected to have a Material
Adverse effect.
K. Federal Reserve Regulations; Use of Loan Proceeds
Neither the Parent nor any of its Subsidiaries is
engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. No part of the
proceeds of the Loans or any Letter of Credit will be used,
directly or indirectly, for a purpose which violates the
provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, as amended. Any-
thing in this Agreement to the contrary notwithstanding, no
Lender shall be obligated to extend credit to the Parent or
any of its Subsidiaries in violation of any limitation or
prohibition provided by any applicable law, regulation or
statute, including Regulation U of the Board of Governors of
the Federal Reserve System.
L. No Misrepresentation
No representation or warranty contained in any
Loan Document and no certificate, Financial Statement, other
financial statement or written notice furnished or to be
furnished by the Parents or any of its Subsidiaries in con-
nection with the transactions contemplated hereby, contains
or will contain, as of its date, a misstatement of material<PAGE>
fact, or omits or will omit to state, as of its date, a
material fact required to be stated in order to make the
statements therein contained not misleading in the light of
the circumstances under which made.
M. Plans
(a) Each Employee Benefit Plan of the Parent, each
of its Subsidiaries and each ERISA Affiliate is in compliance
withERISA and the Code, where applicable, in all material re-
spects. The amount of (a) all Unfunded Pension Liabilities
under the Pension Plans, excluding any Pension Plan which is
a Multiemployer Plan, does not exceed $2,000,000, and (b) the
aggregate Unrecognized Retiree Welfare Liability under all
applicable Employee Benefit Plans does not exceed $2,000,000.
The Parent, each of its Subsidiaries and each ERISA Affiliate
have complied with the requirements of Section 515 of ERISA
with respect to each Pension Plan which is a Multiemployer
Plan. The aggregate potential annual withdrawal liability
payments, as determined in accordance with Title IV of ERISA,
for which the Parent, each of its Subsidiaries and each ERISA
Affiliate would become obligated in the event of a complete
or partial withdrawal from all Pension Plans which are
Multiemployer Plans does not exceed $2,000,000. The Parent,
each of its Subsidiaries and each ERISA Affiliate has made
all contributions or payments to or under each such Pension
Plan required by law or the terms of such Pension Plan or any
contract or agreement where the failure to make such
contributions or payments could reasonably be expected to
have a Material Adverse effect. No liability to the PBGC has
been, or is expected by the Parent, any of its Subsidiaries
or any ERISA Affiliate to be, incurred by the Parent, any of
its Subsidiaries or any ERISA Affiliate where such liability
could reasonably be expected to have a Material Adverse
effect. Liability, as referred to in this Section 4.13,
includes any joint and several liability. Each Employee Ben-
efit Plan which is a group health plan within the meaning of
Section 5000(b)(1) of the Code is in material compliance with
the continuation of health care coverage requirements of Sec-
tion 4980B of the Code.
(b) All contributions required to be made with re-
spect to each Foreign Pension Plan have been timely made.
Each Foreign Pension Plan has been maintained in compliance
with its terms and with the requirements of any and all ap-
plicable laws, statutes, rules, regulations and orders and
has been maintained, where required, in good standing with
applicable Governmental Authorities. Neither the Parent nor
any of its Subsidiaries has incurred any obligation in
connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each
Foreign Pension Plan required to be funded, determined as of
the end of the most recently ended fiscal year on the basis<PAGE>
of actuarial assumptions, each of which is reasonable, did
not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities by more
than the foreign exchange equivalent (based on the applicable
spot exchange rate) of $2,000,000.
N. Environmental Matters
Neither the Parent nor any of its Subsidiaries (a)
has received written notice or otherwise learned of any
claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or
actual liability which individually or in the aggregate could
reasonably be expected to have a Material Adverse effect,
arising in connection with (i) any non-compliance with or
violation of the requirements of any applicable federal,
state, local or foreign environmental health or safety
statute or regulation, or (ii) the release or threatened
release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment, (b) to
the best knowledge of the Parent and the Borrowers, has any
threatened or actual liability in connection with the release
or threatened release of any toxic or hazardous waste, sub-
stance or constituent, or other substance into the environ-
ment which individually or in the aggregate could reasonably
be expected to have a Material Adverse effect, (c) has
received notice of any federal, state, local or foreign
investigation evaluating whether any remedial action is
needed to respond to a release or threatened release of any
toxic or hazardous waste, substance or constituent or other
substance into the environment for which the Parent or any of
its Subsidiaries is or would be liable, which liability would
reasonably be expected to have a Material Adverse effect, or
(d) has received notice that the Parent or any of its
Subsidiaries is or may be liable to any Person under the
Comprehensive Environmental Response, Compensation and Li-
ability Act, as amended, 42 U.S.C. Section 9601 et seq., or
any analogous state, local or foreign law, which liability
would reasonably be expected to have a Material Adverse
effect. The Parent and each of its Subsidiaries is in
compliance with the financial responsibility requirements of
federal, state, local and foreign environmental laws to the
extent applicable, including those contained in 40 C.F.R.,
parts 264 and 265, subpart H, and any analogous federal,
state, local or foreign law, except in those cases in which
the failure so to comply would not reasonably be expected to
have a Material Adverse effect.
O. Financial Statements
The Parent has heretofore delivered to the Admin-
istrative Agent and the Lenders copies of its Form 10-K for
the fiscal year ended January 31, 1995, containing the au-
dited Consolidated Balance Sheets of the Parent and its Sub-<PAGE>
sidiaries as of such date and the related Consolidated State-
ments of Income, Stockholders' Equity and Cash Flows for the
fiscal year then ended (collectively, with the applicable
related notes and schedules, the "Financial Statements").
The Financial Statements fairly present the Consolidated fi-
nancial condition and results of the operations of the Parent
and its Subsidiaries as of the dates and for the periods
indicated therein and have been prepared in conformity with
GAAP as then in effect subject, in the case of interim
Financial Statements, to normal year-end adjustments. Neither
the Parent nor any of its Subsidiaries has any obligation or
liability of any kind (whether fixed, accrued, contingent,
unmatured or otherwise) which, in accordance with GAAP as
then in effect, should have been disclosed in the Financial
Statements and was not. Since January 31, 1995, there has
been no Material Adverse change.
P. Franchises, Intellectual Property, Etc.
Each of the Parent and each of its Subsidiaries
possesses or has the right to use all franchises,
Intellectual Property, licenses and other rights as are mate-
rial and necessary for the conduct of its business, and with
respect to which it is in compliance, with no known conflict
with the valid rights of others which could reasonably be ex-
pected to have a Material Adverse effect. No event has oc-
curred which permits or, to the best knowledge of the Parent
and the Borrowers, after notice or the lapse of time or both,
or any other condition, could reasonably be expected to
permit, the revocation or termination of any such franchise,
Intellectual Property, license or other right which
revocation or termination could reasonably be expected to
have a Material Adverse effect.
Q. Labor Relations
Except as set forth on Schedule 4.17, neither the
Parent nor any of its Subsidiaries is a party to any collec-
tive bargaining agreement and, to the best knowledge of the
Parent and the Borrowers, no petition has been filed or pro-
ceedings instituted by any employee or group of employees
with any labor relations board seeking recognition of a
bargaining representative with respect to the Parent or such
Subsidiary. There are no material controversies pending
between the Parent or any of its Subsidiaries and any of
their respective employees, which could reasonably be
expected to have a Material Adverse effect.
V. CONDITIONS OF LENDING - LOANS ON THE FIRST BORROWING
DATE
In addition to the requirements set forth in Section 6,
the obligation of each Lender to make one or more Loans, the<PAGE>
obligation of the Swing Line Lender to make one or more Swing
Line Loans and the obligation of the Issuing Bank to issue
one or more Letters of Credit, on the first Borrowing Date
(which shall not occur prior to the Effective Date) is sub-
ject to the fulfillment of the following conditions prior to
or simultaneously with the making of such Loans or the issu-
ance of such Letters of Credit:
A. Evidence of Corporate Action
The Administrative Agent shall have received a
certificate, dated the first Borrowing Date, of the Secretary
or Assistant Secretary of each Credit Party (i) attaching a
true and complete copy of the resolutions of its Board of Di-
rectors and of all documents evidencing all necessary corpo-
rate action (in form and substance reasonably satisfactory to
the Administrative Agent) taken by it to authorize the Loan
Documents to which it is a party and the transactions
contemplated thereby, (ii) attaching a true and complete copy
of its organizational documents, (iii) setting forth the
incumbency of its officer(s) who may sign such Loan Docu-
ments, including therein a signature specimen of such
officer(s), and (iv) attaching a certificate of good standing
of the Secretary of State of the State of its incorporation
and each of the jurisdictions listed on Schedule 5.1, in each
case to the extent such certificate of good standing is
available.
B. Guaranty
Each of the Parent, Tiffany, Tiffany International
and Tiffany Japan shall have delivered to the Administrative
Agent a guaranty, dated as of the date hereof, executed by
such Credit Party and in the form of Exhibit N (as the same
may be amended, supplemented or otherwise modified from time
to time, the "Guaranty").
C. Approvals
The Administrative Agent shall have received evi-
dence reasonably satisfactory to it that all approvals and
consents of all Governmental Authorities, and all approvals
and all consents of all other Persons, in each case which are
required to be obtained in connection with the consummation
of the transactions contemplated by the Loan Documents have
been obtained and that all required notices have been given,
and the Administrative Agent shall have received a
certificate, in all respects reasonably satisfactory to the
Administrative Agent, of the Responsible Officer to the
foregoing effect to the best knowledge of such officer.
D. Litigation
There shall be no injunction, writ, preliminary<PAGE>
restraining order or other order of any nature issued by any
Governmental Authority in any respect affecting any Loan
Document or any transaction contemplated by the Loan
Documents, and no action or proceeding by or before any
Governmental Authority shall have been commenced and be
pending seeking to prevent or delay any of the foregoing or
challenging any term or provision thereof or seeking any
damages in connection therewith, and the Administrative Agent
shall have received a certificate, in all respects reasonably
satisfactory to the Administrative Agent, of the executive
officers or analogous counterparts of the Parent to the
foregoing effect to the best knowledge of such officer.
E. Approval of Special Counsel
All legal matters incident to the making of the
Loans on the first Borrowing Date shall be reasonably satis-
factory to Special Counsel, and the Administrative Agent
shall have received from Special Counsel an opinion, dated
the first Borrowing Date, substantially in the form of
Exhibit P.
F. Opinion of Counsel to the Borrowers and the Parent
(a) The Administrative Agent shall have received
an opinion of Scott A. Klion, Esq., Associate General Counsel
to the Parent and counsel to the Domestic Borrowers, dated
the first Borrowing Date, substantially in the form of
Exhibit O-1.
(b) The Administrative Agent shall have received,
in respect of each Borrower which is not a Domestic Borrower,
an opinion of local foreign counsel, reasonably satisfactory
to the Administrative Agent, to such Borrower, dated the
first Borrowing Date, substantially in the form of Exhibit O-
2.
G. Existing Indebtedness
All Indebtedness set forth on Schedule 5.7 shall
have been paid in full, all Liens, if any, securing the same
shall have been terminated, and the Administrative Agent
shall have received satisfactory evidence of the foregoing.
H. Payment of Fees
The Parent and the Borrowers shall have paid to
the Issuing Bank, the Swing Line Lender, the Administrative
Agent, the Arranging Agent and the Lenders all fees and all
expenses which they shall have agreed to pay, to the extent
such fees and expenses shall have become payable on or prior
to the first Borrowing Date, and shall have paid the reason-
able fees and disbursements of Special Counsel in connection
with such agreement to the extent billed therefor.<PAGE>
I. Other Documents
The Administrative Agent shall have received such
other documents (including financial statements and projec-
tions), each in form and substance reasonably satisfactory to
the Administrative Agent, as the Administrative Agent shall
reasonably require in connection with the making of the first
Loans and the issuance of the first Letters of Credit.
VI. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT
The obligation of each Lender to make each Loan, the ob-
ligation of the Swing Line Lender to make each Swing Line
Loan and the obligation of the Issuing Bank to issue each
Letter of Credit is subject to the fulfillment of the
following conditions precedent:
A. Compliance
On each Borrowing Date, and after giving effect to
the Loans to be made, and the Letters of Credit to be issued,
on such Borrowing Date, (a) there shall exist no Default or
Event of Default and (b) the representations and warranties
contained in this Agreement shall be true and correct with
the same effect as though such representations and warranties
had been made on such Borrowing Date except to the extent
that any representation or warranty under Section 4.1
expressly relates to an earlier date.
B. Loan Closings
All documents required by the provisions of this
Agreement to have been executed or delivered by each Credit
Party to the Administrative Agent, the Issuing Bank, the
Swing Line Lender or any Lender on or before the applicable
Borrowing Date shall have been so executed or delivered on or
before such Borrowing Date.
C. Borrowing or Letter of Credit Request
The receipt by the Administrative Agent of a
Notice of Borrowing, in the case of such Loan, or a Letter of
Credit Request, in the case of a Letter of Credit, executed
by the Parent and the applicable Borrower making such
request.
D. Other Documents
The Administrative Agent shall have received such
other documents (including financial statements and projec-
tions), each in form and substance reasonably satisfactory to
the Administrative Agent, as the Administrative Agent shall
reasonably require in connection with the making of the Loans<PAGE>
and the issuance of the Letters of Credit on such Borrowing
Date.
VII. AFFIRMATIVE AND FINANCIAL COVENANTS
The Parent agrees that, so long as any Loan Document is
in effect, any Loan, Letter of Credit or reimbursement
obligation (contingent or otherwise) in respect of any Letter
of Credit remains outstanding and unpaid, or any other
amount is owing under any Loan Document to any Lender or the
Administrative Agent, the Parent will:
A. Legal Existence
Except as may otherwise be permitted by Sections
8.4, 8.5 and 8.6, maintain, and cause each of its
Subsidiaries to maintain, (a) its corporate or partnership
existence, as the case may be, and (b) such existence in good
standing in the jurisdiction of its incorporation or for-
mation and in each other jurisdiction in which the failure so
to do could reasonably be expected to have a Material Adverse
effect; provided however, that subject to Section 8, nothing
in this Section 7.1 shall prevent the abandonment or
termination of the corporate existence or good standing of
any Subsidiary of the Parent (other than Tiffany, Tiffany
International and Tiffany Japan) in any jurisdiction if (i),
in the reasonable judgment of the Parent and such Subsidiary,
such abandonment or termination is in the best interest of
the Parent and its Subsidiaries taken as a whole and would
not have a Material Adverse effect and (ii) such Subsidiary,
at the time of such abandonment or termination, has no
obligations, contingent or otherwise, under any Loan
Documents to any Lender, the Swing Line Lender, the Issuing
Bank or the Administrative Agent.
B. Taxes
Pay and discharge when due, and cause each of its
Subsidiaries so to do, all taxes, assessments, governmental
charges, license fees and levies upon or with respect to the
Parent and such Subsidiary, and upon the income, profits and
Property thereof unless, and only to the extent, that (a)
such taxes, assessments, governmental charges, license fees
and levies shall be contested in good faith and by ap-
propriate proceedings diligently conducted by the Parent or
such Subsidiary, and (b) such reserve or other appropriate
provision as shall be required by GAAP shall have been made
therefor.
C. Insurance
Maintain, and cause each of its Subsidiaries to
maintain, insurance with financially sound insurance carriers<PAGE>
against at least such risks, and in at least such amounts, as
are usually insured against by similar businesses, including
business interruption, public liability (bodily injury and
property damage), fidelity, workers' compensation (where
required) and property insurance, upon request a detailed
list of such insurance then in effect, stating the names of
the carriers thereof, the policy numbers, the insureds
thereunder, the amounts of insurance, dates of expiration
thereof, and the Property and risks covered thereby; except
that the Parent or any of its Subsidiaries may effect
workers' compensation or similar insurance in respect of
operations in any jurisdiction either through an insurance
fund operated by such jurisdiction or by causing to be
maintained a system or systems of self-insurance which is in
accord with applicable laws and good business practice.
D. Performance of Obligations
Pay and discharge promptly when due, and cause
each of its Subsidiaries so to do, all lawful Indebtedness,
obligations and claims for labor, materials and supplies or
otherwise which, if unpaid, could reasonably be expected to
(a) have a Material Adverse effect, or (b) become a Lien on
the Property of the Parent or any of its Subsidiaries, except
those Liens permitted under Section 8.3, provided that nei-
ther the Parent nor such Subsidiary shall be required to pay
or discharge or cause to be paid or discharged any such In-
debtedness, obligation or claim so long as (i) the validity
thereof shall be contested in good faith and by appropriate
proceedings diligently conducted by the Parent or such Sub-
sidiary, and (ii) such reserve or other appropriate provision
as shall be required by GAAP shall have been made therefor.
E. Condition of Property
Except for ordinary wear and tear, at all times,
maintain, protect and keep in good repair, working order and
condition, all Property used in the operation of its business
(other than Property which is replaced with similar
Property), except (i) to the extent that the failure so to do
would not, individually or in the aggregate, have a Material
Adverse effect, and cause each of its Subsidiaries so to do
and (ii) as permitted under Sections 8.3 and 8.4.
F. Observance of Legal Requirements
Observe and comply in all material respects, and
cause each of its Subsidiaries so to do, with all laws, ordi-
nances, orders, judgments, rules, regulations, certifica-
tions, franchises, permits, licenses, directions and require-
ments of all Governmental Authorities, which now or at any
time hereafter may be applicable to it or to such Subsidiary,
a violation of which could reasonably be expected to have a
Material Adverse effect.<PAGE>
G. Financial Statements and Other Information
Maintain, and cause each of its Subsidiaries to
maintain, a standard system of accounting in accordance with
GAAP, and furnish to each Lender:
(a) As soon as available and, in any event, within
105 days after the close of each fiscal year, a copy of (i)
the Balance Sheet as of the end of such fiscal year, of the
Parent on a Consolidated basis, and (ii) the related State-
ments of Income, Cash Flows and Shareholder's Equity for
such fiscal year, of the Parent on a Consolidated basis, set-
ting forth in each case in comparative form the corresponding
figures in respect of the previous fiscal year, all in
reasonable detail, and accompanied by, in the case of such
Consolidated financial statements, a report of the Account-
ants, which report shall state that (A) the Accountants au-
dited such Consolidated financial statements, (B) such audit
was made in accordance with generally accepted auditing
standards in effect at the time and provides a reasonable
basis for such opinion, and (C) said Consolidated financial
statements have been prepared in accordance with GAAP;
(b) Simultaneously with the delivery of the certi-
fied statements required by clause (a) above, copies of a
certificate of such Accountants stating that, in making the
examination necessary for their audit of the Consolidated
financial statements of the Parent for such fiscal year,
nothing came to their attention of a financial or accounting
nature that caused them to believe that there shall have oc-
curred any condition or event which would constitute a
Default or an Event of Default, or, if so, specifying in such
certificate all such Defaults and Events of Default and the
nature and status thereof;
(c) As soon as available, and in any event within
50 days after the end of each of the first three fiscal quar-
ters, and 105 days after the end of the last fiscal quarter,
of each fiscal year, a copy of (i) the Balance Sheet, as of
the end of such quarter, of the Parent on a Consolidated
basis and (ii) the related Statements of Income, Cash Flows
and Shareholder's Equity, of the Parent on a Consolidated
basis for (x) such quarter, and (y) the period from the be-
ginning of the then current fiscal year to the end of such
quarter, in each case in comparative form with the prior
fiscal year, all in reasonable detail and prepared in
accordance with GAAP (without footnotes and subject to
year-end adjustments), together with a certificate of the
Responsible Officer, which certificate shall state that all
such financial statements fairly present the financial
condition and results of operations of the Parent and its
Subsidiaries and have been prepared in accordance with GAAP
(but without footnotes and subject to year-end adjustments);<PAGE>
(d) Notwithstanding anything to the contrary con-
tained herein, the Parent may satisfy its obligation to fur-
nish (i) the Consolidated financial statements referred to in
clause (a) above by furnishing, as soon as available, and in
any event within 105 days after the end of the applicable
fiscal year, a copy of the annual audited Consolidated
financial statements of the Parent and its Subsidiaries
prepared in conformity with GAAP and as filed with the SEC
for such fiscal year, and (ii) the Consolidated financial
statements referred to in clause (c) above by furnishing, as
soon as available, and in any event within 50 days after the
end of the applicable fiscal quarter, copies of the
Consolidated financial statements of the Parent and its
Subsidiaries as filed with the SEC for the applicable fiscal
quarter;
(e) Simultaneously with the delivery of the finan-
cial statements required by clauses (a), (c) and (d) above, a
certificate of the Responsible Officer certifying that to the
best of his knowledge no condition or event has occurred
which would constitute a Default or an Event of Default, or
if so, specifying in such certificate all such violations,
conditions and events and the nature and status thereof;
(f) Within 45 days after the end of each of the
first three fiscal quarters, and within 90 days after the end
of the last fiscal quarter, of each fiscal year, a Compliance
Certificate, as of the end of such fiscal quarter, certified
by the Responsible Officer;
(g) As soon as available, and in any event within
two Business Days after any downgrade or withdrawal by either
S&P or Moody's of the senior unsecured long term debt Rating
assigned to the Parent, written notice to the Administrative
Agent and each Lender thereof, and the effective date
thereof, in each case certified by the Responsible Officer;
(h) Prompt written notice upon the Parent or any
of its Subsidiaries obtaining knowledge that: (i) any In-
debtedness of the Parent or any of its Subsidiaries in an
aggregate amount in excess of $5,000,000 shall have been
declared or become due and payable prior to its stated
maturity, or called and not paid when due, or required to be
purchased or otherwise acquired by the Parent or any of its
Subsidiaries prior to its stated maturity, and whether such
acceleration shall have been rescinded or annulled, or (ii)
the holders of any notes, or other evidence of Indebtedness,
certificates or securities evidencing any such Indebtedness,
or any obligees with respect to any other Indebtedness of the
Parent or any of its Subsidiaries, have the right to declare
Indebtedness in an aggregate amount in excess of $5,000,000
due and payable prior to its stated maturity or have the
right to require the Parent or any of its Subsidiaries to
purchase or otherwise acquire any such Indebtedness prior to<PAGE>
its stated maturity and whether such right shall have been
waived;
(i) Prompt written notice of: (i) any citation,
summons, subpoena, order to show cause or other order naming
the Parent or any of its Subsidiaries a party to any proceed-
ing before any Governmental Authority which could reasonably
be expected to have a Material Adverse effect, and include
with such notice a copy of such citation, summons, subpoena,
order to show cause or other order, (ii) any lapse or other
termination of any license, permit, franchise or other autho-
rization issued to the Parent or any of its Subsidiaries by
any Governmental Authority, (iii) any refusal by any Govern-
mental Authority to renew or extend any license, permit,
franchise or other authorization, and (iv) any dispute
between the Parent or any of its Subsidiaries and any Gov-
ernmental Authority, which lapse, termination, refusal or
dispute, referred to in clause (ii), (iii) or (iv) above,
could reasonably be expected to have a Material Adverse ef-
fect;
(j) Promptly upon becoming available, copies of
all regular, periodic or special reports, schedules, proxy
statements, registration statements, 10-Ks, 10-Qs and 8-Ks
which the Parent or any of its Subsidiaries may now or here-
after be required to file with or deliver to any securities
exchange or the SEC, and copies of all material news releases
sent to financial analysts;
(k) Prompt written notice in the event that the
Parent or any of its Subsidiaries knows, or has reason to
know, that (i) any Termination Event with respect to a
Pension Plan has occurred or will occur, (ii) any condition
exists with respect to a Pension Plan (other than a
Multiemployer Plan) which presents a material risk of
termination of such Pension Plan by the PBGC, imposition of
an excise tax on the Parent, any of its Subsidiaries or any
ERISA Affiliate or the requirement that the Parent, any of
its Subsidiaries or any ERISA Affiliate provide security to
any Pension Plan, (iii) the Parent, any of its Subsidiaries
or any ERISA Affiliate has applied for a waiver of the
minimum funding standard under Section 412 of the Code with
respect to a Pension Plan, (iv) the aggregate amount of the
Unfunded Pension Liabilities under all Pension Plans (other
than Multiemployer Plans) has increased to an amount in
excess of $2,000,000, (v) the aggregate amount of Un-
recognized Retiree Welfare Liability under all applicable Em-
ployee Benefit Plans has increased to an amount in excess of
$2,000,000, (vi) the Parent, any of its Subsidiaries or any
ERISA Affiliate has engaged in a Prohibited Transaction with
respect to an Employee Benefit Plan, (vii) the imposition of
a tax upon the Parent or any of its Subsidiaries under Sec-
tion 4980B(a) of the Code, or (viii) the assessment of a
civil penalty under Section 502(c) of ERISA against the<PAGE>
Parent or any of its Subsidiaries, or (ix) any condition with
respect to a Multiemployer Plan exists which presents a risk
of material liability to the Parent or any of its
Subsidiaries or would reasonably be expected to have a
Material Adverse effect, in each case together with a
certificate of the Responsible Officer setting forth the
details of such event and the action which the Parent, such
Subsidiary or such ERISA Affiliate proposes to take with
respect thereto, together with a copy of all notices and fil-
ings with respect thereto;
(l) Prompt written notice in the event that the
Parent, any of its Subsidiaries or any ERISA Affiliate shall
receive a demand letter from the PBGC notifying the Parent,
such Subsidiary or such ERISA Affiliate of any final decision
finding liability of the Parent, any of its Subsidiaries or
any ERISA Affiliate and the date by which such liability must
be paid, together with a copy of such letter and a
certificate of the Responsible Officer setting forth the
action which the Parent, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto;
(m) Promptly upon the same becoming available, and
in any event by the date such amendment is adopted, a copy of
any Pension Plan amendment that the Parent, any of its
Subsidiaries or any ERISA Affiliate proposes to adopt which
would require the posting of security under Section
401(a)(29) of the Code, together with a certificate of the
Responsible Officer setting forth the reasons for the
adoption of such amendment and the action which the Parent,
such Subsidiary or such ERISA Affiliate proposes to take with
respect thereto;
(n) As soon as possible and in any event by the
10th day after any required installment or other payment
under Section 412 of the Code owed to a Pension Plan by the
Parent, any of its Subsidiaries or any ERISA Affiliate shall
have become due and owing and remain unpaid a copy of the
notice of failure to make required contributions provided to
the PBGC by the Parent, any of its Subsidiaries or any ERISA
Affiliate under Section 412(n) of the Code, together with a
certificate of the Responsible Officer setting forth the
action which the Parent, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto;
(o) If the termination of any Pension Plan would
result in the imposition of any tax under Section 4980 of the
Code, then as soon as possible, but in no event less than 60
days before the due date of the tax, a certificate of the
Responsible Officer setting forth the estimated amount of the
tax, any reversion, and the proposed use of the reversion
(this Section 7.7(o) shall apply to a transaction
notwithstanding a reduction or complete elimination of the
tax because of the operation of either Sections 4980(d) or<PAGE>
420(a)(3)(A) of the Code);
(p) Upon a Responsible Officer becoming aware
thereof, prompt written notice that a material contribution
required to be made to any Foreign Pension Plan has not been
timely made, the failure of which would reasonably be
expected to have a Material Adverse effect;
(q) Upon a Responsible Officer becoming aware
thereof, prompt written notice of the occurrence of (i) each
Default, (ii) each Event of Default, and (iii) each Material
Adverse change;
(r) Promptly upon receipt thereof, copies of all
audit reports relating to the Parent or any of its
Subsidiaries submitted by the Accountants in connection with
each annual, interim or special audit of the books of the
Parent or any of its Subsidiaries; and
(s) Promptly upon request therefor, such other in-
formation and reports regarding the business, condition (fi-
nancial or otherwise), property or prospects of the Parent
and its Subsidiaries, as the Administrative Agent or any
Lender at any time or from time to time may reasonably re-
quest.
H. Inspection
At all reasonable times, upon reasonable prior no-
tice, permit representatives of the Administrative Agent or
any Lender to visit the offices of the Parent or each of its
Subsidiaries, to examine the books and records thereofand Ac-
countants' reports relating thereto, and to make copies or
extracts therefrom, to discuss the affairs of the Parent or
each of its Subsidiaries with the respective officers
thereof, and to examine and inspect the Property of the
Parent or each of its Subsidiaries and to meet and discuss
the affairs of the Parent and each of its Subsidiaries with
the Accountants.
I. Authorizations
Maintain and cause each of its Subsidiaries to
maintain, in full force and effect, all copyrights, patents,
trademarks, trade names, franchises, licenses, permits, ap-
plications, reports, and other authorizations and rights, as
are necessary for theconduct from time to time of their busi-
nesses, except to the extent the failure so to maintain such
items, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse effect.
J. Subsidiaries
(a) At all times maintain (directly or<PAGE>
indirectly), beneficially and of record, (i) at least 51% of
the voting control of, and at least 51% of the equity in,
Tiffany & Co. K.K., and (ii) 100% of the voting control of,
and 100% of the equity in, each other Subsidiary Borrower.
(b) Except as set forth on Schedule 4.1 or as may
otherwise be permitted by Sections 8.4, 8.5 and 8.6, at all
times maintain (directly or indirectly), beneficially and of
record, 100% of the voting control of, and 100% of the equity
in, each of its other Subsidiaries.
K. Leverage Ratio
At all times have a Leverage Ratio not greater
than 0.55:1.00.
L. Interest Coverage Ratio
At all times have an Interest Coverage Ratio
greater than 2.50:1.00.
VIII. NEGATIVE COVENANTS
The Parent agrees that, so long as any Loan Document is
in effect, any Loan, Letter of Credit or reimbursement
obligation (contingent or otherwise) in respect of any Letter
of Credit remains outstanding and unpaid, or any other amount
is owing under any Loan Document to any Lender, the Swing
Line Lender or the Administrative Agent, the Parent shall
not, directly or indirectly:
A. Indebtedness
Create, incur, assume or suffer to exist any In-
debtedness, or permit any of its Subsidiaries so to do,
except any one or more of the following types of
Indebtedness: (a) Indebtedness under the Loan Documents, (b)
Indebtedness of the Subsidiaries of the Parent in an
aggregate principal amount not in excess of $25,000,000 at
any one time outstanding (i) in respect of capital leases,
(ii) secured by Liens on Property acquired by any such
Subsidiary after the date hereof provided that such Liens are
in existence on the date of such acquisition and were not
placed on such Property in contemplation of such acquisition,
and (iii) other purchase money Indebtedness of the
Subsidiaries of the Parent, provided that, in each case under
this clause (b), the Lien securing such Indebtedness is per-
mitted by Section 8.3, (c) Indebtedness set forth on Schedule
8.1 and any refinancings, extensions and renewals thereof,
(d) Indebtedness set forth on Schedule 5.7, provided that it
will be repaid in full simultaneously with the making of the
Loans on the first Borrowing Date, (e) Intercompany Debt, (f)
other Indebtedness of the Subsidiaries of the Parent in an<PAGE>
aggregate principal amount at any one time outstanding not to
exceed $10,000,000, provided that immediately before and
after giving effect to the creation, incurrence or assumption
of such Indebtedness no Default or Event of Default shall or
would exist, (g) Indebtedness of the Parent, provided that
immediately before and after giving effect to the creation,
incurrence or assumption of such Indebtedness no Default or
Event of Default shall or would exist, and (h) Indebtedness
in the form of a deferred payable of Tiffany to Mitsukoshi
Limited in the principal amount of 2.5 billion Japanese yen.
B. Interest Rate Protection Arrangements and Other
Hedging Arrangements
Create, incur, assume or suffer to exist any in-
debtedness under or in respect of any Interest Rate
Protection Arrangement or any Other Hedging Arrangement, or
permit any of its Subsidiaries so to do, except (i) foreign
currency purchased put options and forward exchange contracts
intended to reduce the risk on foreign currency denominated
transactions and (ii) interest rate swap agreements to modify
the interest rate characteristics of up to $100,000,000
notional principal amount of Indebtedness.
C. Liens
Create, incur, assume or suffer to exist any Lien
against or on any Property now owned or hereafter acquired by
the Parent or any of its Subsidiaries, or permit any of its
Subsidiaries so to do, except any one or more of the
following types of Liens: (a) Liens in connection with work-
ers' compensation, unemployment insurance or other social
security obligations (which phrase shall not be construed to
refer to ERISA or the minimum funding obligations under
Section 412 of the Code), (b) Liens to secure the performance
of bids, tenders, letters of credit, contracts (other than
contracts for the payment of Indebtedness), leases, statutory
obligations, surety, customs, appeal, performance and payment
bonds and other obligations of like nature, in each such case
arising in the ordinary course of business, (c) mechanics',
workmen's, carriers', warehousemen's, materialmen's,
landlords', or other like Liens arising in the ordinary
course of business with respect to obligations which are not
due or which are being contested in good faith and by ap-
propriate proceedings diligently conducted, (d) Liens for
taxes, assessments, fees or governmental charges the payment
of which is not required by Section 7.2, (e) easements,
rights of way, restrictions, leases of Property to others,
easements for installations of public utilities, title imper-
fections and restrictions, zoning ordinances and other
similar encumbrances affecting Property which in the
aggregate do not materially impair its use for the operation
of the business of the Parent or such Subsidiary, (f) Liens
set forth on Schedule 8.3 and any renewal thereof, (g) Liens<PAGE>
under capital leases and Liens on Property (including, in the
event such Property constitutes capital stock of a newly
acquired Subsidiary of the Parent, Liens on the Property of
such Subsidiary) hereafter acquired and either existing on
such Property when acquired, or created contemporaneously
with such acquisition, to secure the payment or financing of
the purchase price thereof, provided that such Liens attach
only to the Property so purchased or acquired and provided
further that the Indebtedness secured by such Liens is
permitted by Section 8.1(b), (h) Liens created under the Loan
Documents, (i) statutory Liens in favor of lessors arising in
connection with Property leased to the Parent or any of its
Subsidiaries, (j) Liens of attachments, judgments or awards
against the Parent or any of its Subsidiaries with respect to
which an appeal or proceeding for review shall be pending or
a stay of execution shall have been obtained, or which are
otherwise being contested in good faith and by appropriate
proceedings diligently conducted, and in respect of which
adequate reserves shall have been established in accordance
with GAAP on the books of the Parent or such Subsidiary, and
(k) Intercompany Liens.
D. Dispositions
Make any Disposition or permit any of its Subsid-
iaries so to do, except any one or more of the following:
(a) Dispositions of any Investments permitted under Sections
8.7(a), (b), (c), (d) or (e), (b) Intercompany Dispositions,
(c) Dispositions in the ordinary course of business
(including the disposition of closed stores and the
disposition of certain New Jersey facilities in connection
with the consolidation of such facilities' operations into a
new facility to be constructed and leased in Parsippany, New
Jersey), and (d) other Dispositions of Property having a fair
market value which, when aggregated with the fair market
value of all other Dispositions of Property (other than
Dispositions described in the preceding clauses (a), (b) and
(c) made on and after the Effective Date, would not exceed
$75,000,000 on a Consolidated basis, provided, however, that
immediately before and after giving effect thereto, no
Default or Event of Default shall or would exist.
E. Merger or Consolidation, Etc.
(a) Consolidate with, be acquired by, or merge
into or with any Person, or convey or otherwise transfer all
or substantially all of its Property, or permit any of its
Subsidiaries so to do, except that:
(i) any of its wholly-owned Subsidiaries
(other than a Borrower) may consolidate with or merge with
any of its other Subsidiaries (other than a Borrower), or
convey or transfer all or substantially all of its Property
to any of its other wholly-owned Subsidiaries (other than a<PAGE>
Borrower), provided that (x) immediately before and after
giving effect thereto no Default or Event of Default shall or
would exist and (y) the Administrative Agent shall have
received 15 Business Days' prior written notice thereof, and
(ii) any of its wholly-owned Subsidiaries may
consolidate with or merge with any Subsidiary Borrower, or
convey or transfer all or substantially all of its Property
to any Subsidiary Borrower, provided that (w) immediately
before and after giving effect thereto no Default or Event of
Default shall or would exist, (x) such Subsidiary Borrower
shall be the survivor of such consolidation or merger, (y)
the Administrative Agent shall have received 15 Business
Days' prior written notice of such consolidation, merger,
conveyance or transfer, and (z) the Administrative Agent
shall have received such documents, opinions and certificates
as the Administrative Agent shall have reasonably requested
in connection therewith.
F. Acquisitions
Make any Acquisition, or permit any of its Sub-
sidiaries so to do, except any one or more of the following:
(a) Acquisitions of Investments permitted by Section 8.7, (b)
Intercompany Acquisitions permitted by Section 8.5, and (c)
Acquisitions by the Parent or any of its Subsidiaries,
provided that (i) immediately before and after giving effect
to each such Acquisition no Default or Event of Default shall
or would exist, (ii) immediately after giving effect to each
such Acquisition, all of the representations and warranties
contained in Section 4 shall be true and correct as if then
made except to the extent that any representation or warranty
under Section 4.1 expressly relates to an earlier date, and
(iii) the aggregate consideration paid for all such
Acquisitions shall not exceed $50,000,000.
G. Investments
Any time hold, purchase, invest in or otherwise
acquire any derivative product or any interest therein or any
debt security or Stock of, or any other equity interest in,
any Person, or make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to,
or make any other investment, whether by way of capital con-
tribution or otherwise, in any Person (all of which are some-
times referred to herein as "Investments"), or permit any of
its Subsidiaries so to do, except any one or more of the fol-
lowing Investments: (a) Investments in short-term direct ob-
ligations of the United States of America (and not the agen-
cies or instrumentalities thereof), (b) Investments in
short-term debt securities of any issuer, provided that the
principal thereof and interest thereon is unconditionally
guaranteed by the United States of America (and not the agen-
cies or instrumentalities thereof), (c) Investments in short-<PAGE>
term certificates of deposit, in Dollars, of any Lender or
any other depository institution chartered under the laws of
the United States of America or any State thereof the
deposits of which are insured by the Federal Deposit
Insurance Corporation and which has capital and undivided
surplus of not less than $500,000,000, (d) Investments in
commercial paper having a commercial paper rating of not
lower than (i) A-1 by S&P, or (ii) P-1 by Moody's, (e)
Investments existing on the date hereof and set forth on
Schedule 8.7, (f) Investments in Intercompany Debt, (g)
Investments in the Parent or any Subsidiary or any Person who
immediately thereafter becomes a Subsidiary, (h) Investments
from the net cash proceeds received from the issuance of
additional shares of the Parent's capital stock, (i)
Acquisitions permitted by Section 8.6, (j) Investments in
short-term certificates of deposit or similar instruments, in
any Currency other than Dollars, of any bank which has
capital and undivided surplus of not less than the equivalent
of $1,000,000,000, and (k) additional Investments in an
aggregate amount not exceeding $5,000,000 or the equivalent
thereof.
H. Restricted Payments
Make any Restricted Payment or permit any of its
Subsidiaries so to do, except any one or more of the
following Restricted Payments: (a) any direct or indirect
wholly-owned Subsidiary of the Parent may make dividends or
other distributions to the Parent or to any other direct or
indirect wholly-owned Subsidiary of the Parent, and (b) the
Parent may make regular periodic dividends at a rate which is
substantially consistent with past practice, provided that
immediately before and after giving effect thereto, no
Default or Event of Default shall or would exist.
I. Limitation on Upstream Dividends by Subsidiaries
Permit, cause or suffer to exist, any of its Sub-
sidiaries to enter into or agree, or otherwise be or become
subject, to any agreement, contract or other arrangement
(other than this Agreement) with any Person pursuant to the
terms of which (a) such Subsidiary is or would be prohibited
from declaring or paying any cash dividends on any class of
its stock owned directly or indirectly by the Parent or any
of its other Subsidiaries or from making any other dis-
tribution on account of any class of any such stock (herein
referred to as "Upstream Dividends"), or (b) the declaration
or payment of Upstream Dividends by a Subsidiary of the
Parent to the Parent or another Subsidiary of the Parent, on
an annual or cumulative basis, is or would be otherwise
limited or restricted.
J. Transactions with Affiliates<PAGE>
Become, or permit any of its Subsidiaries to be-
come, a party to any material transaction with any Affiliate
of the Parent on a basis less favorable in any material re-
spect than if such transaction were not with an Affiliate of
the Parent.
IX. DEFAULT
A. Events of Default
The following shall each constitute an "Event of
Default" hereunder:
(a) The failure of any Borrower to make any
principal payment on any Loan or any reimbursement payment in
respect of any Letter of Credit when due and payable; or
(b) The failure of any Borrower to make payment of
any installment of interest on any Loan or any fee or other
amount payable under or in respect of any Loan Document on
the date when due and payable and such default shall continue
unremedied for a period of three Business Days after the same
shall have become due; or
(c) The failure of the Parent or any Borrower to
observe or perform any covenant or agreement contained in
Section 2.18, 7.1(a), 7.11 or 7.12, or in Section 8; or
(d) The failure of the Parent or any Borrower to
observe or perform any other covenant or agreement contained
in this Agreement, and such failure shall have continued
unremedied for a period of 30 days after any Responsible
Officer shall have become aware of such failure; or
(e) Any representation or warranty of any Credit
Party (or of any of its officers on its behalf) made in any
Loan Document or in any certificate, report, opinion (other
than an opinion of counsel) or other document delivered on or
after the date hereof pursuant to any Loan Document, shall in
any such case prove to have been incorrect or misleading
(whether because of misstatement or omission) in any material
respect when made; or
(f) (i) Liabilities and/or other obligations in an
aggregate amount in excess of $5,000,000 of the Parent or any
of its Subsidiaries on a Consolidated basis (other than the
obligations hereunder and Intercompany Debt), whether as
principal, guarantor, surety or other obligor, for the pay-
ment or purchase of any Indebtedness, (A) shall become or
shall be declared to be due and payable prior to the
expressed maturity thereof (unless such acceleration shall
have thereafter been unconditionally rescinded or annulled
prior to the time that the Aggregate Commitment has been
terminated or the Loans have become or been declared due and<PAGE>
payable), or (B) shall not be paid when due or within any
grace period for the payment or purchase thereof, or (ii) any
holder of any such obligations shall have the right to
declare the Indebtedness evidenced thereby due and payable or
to require the purchase of the Indebtedness evidenced thereby
prior to its stated maturity (unless such right shall
thereafter have been unconditionally waived prior to the time
such holder shall have declared such Indebtedness due and
payable or required the purchase of such Indebtedness); or
(g) The Parent or any of its Subsidiaries shall
(i) suspend or discontinue its business (except as may oth-
erwise be expressly permitted herein), or (ii) make an as-
signment for the benefit of creditors, or (iii) generally not
be paying its debts as such debts become due, or (iv) admit
in writing its inability to pay its debts as they become due,
or (v) file a voluntary petition in bankruptcy, or (vi)
become insolvent (however such insolvency shall be evi-
denced), or (vii) file any petition or answer seeking for it-
self any reorganization, arrangement, composition, readjust-
ment of debt, liquidation or dissolution or similar relief
under any present or future statute, law or regulation of any
jurisdiction, or (viii) petition or apply to any tribunal for
any receiver, custodian or any trustee for any substantial
part of its Property, or (ix) be the subject of any such pro-
ceeding filed against it which remains undismissed for a pe-
riod of 45 days, or (x) file any answer admitting or not con-
testing the material allegations of any such petition filed
against it, or of any order, judgment or decree approving
such petition in any such proceeding, or (xi) seek, approve,
consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, custodian, liquidator,
or fiscal agent for it, or any substantial part of its
Property, or an order is entered appointing any such trustee,
receiver, custodian, liquidator or fiscal agent and such
order remains unstayed and in effect for 45 days; or
(h) An order for relief is entered under the bank-
ruptcy or insolvency laws of any jurisdiction and continues
unstayed and in effect for a period of 60 days (i) adjudging
the Parent or any of its Subsidiaries as bankrupt or insol-
vent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or
composition of, or in respect of the Parent or any of its
Subsidiaries under the bankruptcy or insolvency laws of any
jurisdiction, or (iii) appointing a receiver, liquidator, as-
signee, trustee, custodian, sequestrator (or other similar
official) of the Parent or any of its Subsidiaries or of any
substantial part of the Property of any thereof, or (iv) or-
dering the winding up or liquidation of the affairs of the
Parent or any of its Subsidiaries and any such decree or
order continues unstayed and in effect for a period of 60
days; or<PAGE>
(i) Judgments or decrees in an aggregate amount in
excess of $5,000,000 on a Consolidated basis against the Par-
ent or any of its Subsidiaries (except to the extent covered
by insurance, provided that each applicable insurance company
has expressly assumed responsibility with respect to the
applicable underlying claim) shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of
30 days; or
(j) A Change of Control shall occur; or
(k) Any license, franchise, permit, right, ap-
proval or agreement of the Parent or any of its Subsidiaries
to own or operate any Operating Entity owned or operated by
the Parent or such Subsidiary is not renewed, or is suspended
or revoked, and the non-renewal, suspension or revocation is
irrevocable and not subject to appeal or challenge and would
have a Material Adverse effect; or
(l) (i) any Termination Event shall occur with re-
spect to any Pension Plan (other than a Multiemployer Plan);
(ii) any Accumulated Funding Deficiency in excess of
$2,000,000, whether or not waived, shall exist with respect
to any Pension Plan (other than a Multiemployer Plan); (iii)
any Person shall engage in any Prohibited Transaction involv-
ing any Employee Benefit Plan which would have a Material
Adverse effect; (iv) the Parent, any of its Subsidiaries or
any ERISA Affiliate shall fail to pay when due an amount
which is payable by it to the PBGC or to a Pension Plan
(including a Multiemployer Plan) under Title IV of ERISA and
such non-payment would have a Material Adverse effect; (v)
the imposition of any tax under Section 4980(B)(a) of the
Code; (vi) the assessment of a civil penalty with respect to
any Employee Benefit Plan under Section 502(c) of ERISA;
(vii) any other event or condition shall occur or exist with
respect to an Employee Benefit Plan which would have a Mate-
rial Adverse effect; (viii) a contribution required to be
made to a Foreign Pension Plan has not been timely made which
would have a Material Adverse effect; or (ix) the Parent or
any of its Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more Foreign Pension Plans
which would have a Material Adverse effect; or
(m) (i) Any Loan Document shall cease to be in
full force and effect, or an "Event of Default" shall have
occurred under, and as such term is defined therein, or (ii)
the failure of any Credit Party to observe or perform any ob-
ligation on its part to be observed or performed under any
Loan Document, and such failure shall have continued
unremedied for a period of 30 days after any Responsible
Officer shall have become aware of such failure, or any
Credit Party shall disavow in writing any of its obligations
thereunder.<PAGE>
Upon the occurrence of an Event of Default or at
any time thereafter during the continuance thereof, (a) if
such event is an Event of Default specified in clause (g) or
(h) above, the Aggregate Commitments, the Swing Line Commit-
ment, the Individual Currency Commitments and the Letter of
Credit Commitment shall immediately and automatically termi-
nate and the Loans, all accrued and unpaid interest thereon,
any reimbursement obligations owing or contingently owing in
respect of all outstanding Letters of Credit and all other
amounts owing under the Loan Documents shall immediately be-
come due and payable, and the Parent and the applicable
Letter of Credit Applicants shall forthwith deposit an amount
equal to the Letter of Credit Exposure in a cash collateral
account with and under the exclusive control of the Adminis-
trative Agent, and the Administrative Agent may, and, upon
the direction of the Required Lenders shall, exercise any and
all remedies and other rights provided in the Loan Documents,
and (b) if such event is any other Event of Default, any or
all of the following actions may be taken: (i) with the con-
sent of the Required Lenders, the Administrative Agent may,
and upon the direction of the Required Lenders shall, by no-
tice to the Parent (on behalf of all Borrowers), declare the
Aggregate Commitments, the Swing Line Commitment, the Indi-
vidual Currency Commitments and the Letter of Credit Commit-
ment to be terminated forthwith, whereupon the Aggregate Com-
mitments, the Swing Line Commitment, the Individual Currency
Commitments and the Letter of Credit Commitment shall im-
mediately terminate, and (ii) with the consent of the
Required Lenders, the Administrative Agent may, and upon the
direction of the Required Lenders shall, by notice of default
to the Parent (on behalf of all Borrowers), declare the
Loans, all accrued and unpaid interest thereon, any
reimbursement obligations owing or contingently owing in
respect of all outstanding Letters of Credit and all other
amounts owing under the Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due
and payable, and the Parent and the applicable Letter of
Credit Applicants shall forthwith deposit an amount equal to
the Letter of Credit Exposure in a cash collateral account
with and under the exclusive control of the Administrative
Agent, and the Administrative Agent may, and upon the
direction of the Required Lenders shall, exercise any and all
remedies and other rights provided pursuant to the Loan
Documents. Except as otherwise provided in this Section,
presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
In the event that the Aggregate Commitments, the
Swing Line Commitment, the Individual Currency Commitments
and the Letter of Credit Commitment shall have been termi-
nated or the Loans shall have been declared due and payable
pursuant to the provisions of this Section, any funds
received by the Administrative Agent and the Lenders from or
on behalf of any Borrower shall be applied by the<PAGE>
Administrative Agent and the Lenders in liquidation of the
Loans and the obligations of the Credit Parties under the
Loan Documents in the following manner and order: (i) first,
to the payment of interest on, and then the principal portion
of, any Loans which the Administrative Agent may have ad-
vanced on behalf of any Lender for which the Administrative
Agent has not then been reimbursed by such Lender or the
Credit Parties; (ii) second, to the payment of any expenses
due the Administrative Agent from the Credit Parties, (iii)
third, to reimburse the Administrative Agent and the Lenders
for any expenses (to the extent not paid pursuant to clause
(ii) above due from the Parent and the Borrowers pursuant to
the provisions of Section 11.5; (iv) fourth, to the payment
of accrued Facility Fees, Letter of Credit Commissions and
all other fees, expenses and amounts due under or in respect
of the Loan Documents (other than principal and interest on
the Loans and reimbursement obligations and interest thereon
with respect to the Letters of Credit); (v) fifth, to the
payment of interest due on the Loans and due on reimbursement
obligations with respect to the Letters of Credit; (vi)
sixth, to the payment of principal outstanding on the Loans
and reimbursement obligations with respect to the Letters of
Credit; and (vii) seventh, to the payment of any other
amounts owing to the Administrative Agent and the Lenders un-
der the Loan Documents.
X. THE ADMINISTRATIVE AGENT
A. Appointment
Each Lender hereby irrevocably designates and ap-
points BNY as the Administrative Agent of such Lender under
the Loan Documents and each such Lender hereby irrevocably
authorizes BNY, as the Administrative Agent for such Lender,
to take such action on its behalf under the provisions of the
Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent
by the terms of the Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this Agreement or
any Loan Document, the Administrative Agent shall not have
any duties or responsibilities other than those expressly set
forth herein or therein, or any fiduciary relationship with
the Issuing Bank, the Swing Line Lender or any Lender, and no
implied covenants, functions, responsibilities, duties, obli-
gations or liabilities shall be read into the Loan Documents
or otherwise exist against the Administrative Agent.
B. Delegation of Duties
The Administrative Agent may execute any of its
duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to rely upon the ad-<PAGE>
vice of counsel concerning all matters pertaining to such du-
ties.
C. Exculpatory Provisions
Neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in con-
nection with the Loan Documents (except the Administrative
Agent for its own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by
the Credit Parties or any officers of the Credit Parties con-
tained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in,
or received by the Administrative Agent under or in con-
nection with, the Loan Documents or for the value, validity,
effectiveness, genuineness, perfection, enforceability or
sufficiency of any of the Loan Documents or for any failure
of the Credit Parties or any other Person to perform its
obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to as-
certain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, the
Loan Documents, or to inspect the properties, books or
records of the Credit Parties. The Administrative Agent
shall not be under any liability or responsibility what-
soever, as Administrative Agent, to the Credit Parties or any
other Person as a consequence of any failure or delay in per-
formance, or any breach, by any Lender of any of its obliga-
tions under the Loan Documents.
D. Reliance by Administrative Agent
The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writ-
ing, resolution, notice, consent, certificate, affidavit,
opinion, letter, cablegram, telegram, fax, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to
any of the Credit Parties), independent accountants and other
experts selected by the Administrative Agent. The Ad-
ministrative Agent may treat each Lender, or the Person
designated in the last notice filed with it under this Sec-
tion, as the holder of all of the interests of such Lender in
its Loans until written notice of transfer, signed by such
Lender (or the Person designated in the last notice filed
with the Administrative Agent) and by the Person designated
in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been
filed with the Administrative Agent. The Administrative<PAGE>
Agent shall not be under any duty to examine or pass upon the
validity, effectiveness, enforceability, perfection or
genuineness of any of the Loan Documents or any instrument,
document or communication furnished pursuant hereto or
thereto or in connection herewith or therewith, and the
Administrative Agent shall be entitled to assume that the
same are valid, effective and genuine, have been signed or
sent by the proper parties and are what they purport to be.
The Administrative Agent shall be fully justified in failing
or refusing to take any action under the Loan Documents
unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate. The Adminis-
trative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan
Documents in accordance with a request or direction of the
Required Lenders, and such request or direction and any
action taken or failure to act pursuant thereto shall be
binding upon the Issuing Bank, the Swing Line Lender and all
of the Lenders and all future holders of the Indebtedness of
the Credit Parties under the Loan Documents.
E. Notice of Default
The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default unless the Administrative Agent has received
written notice thereof from the Issuing Bank, the Swing Line
Lender, any Lender, or any Credit Parties. In the event that
the Administrative Agent receives such a notice, the Adminis-
trative Agent shall promptly give notice thereof to the Issu-
ing Bank, the Swing Line Lender and the Lenders. The Adminis-
trative Agent shall take such action with respect to such De-
fault or Event of Default as shall be directed by the
Required Lenders, provided, however, that unless and until
the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem
to be in the best interests of the Issuing Bank, the Swing
Line Lender and the Lenders.
F. Non-Reliance
The Issuing Bank, the Swing Line Lender and each
Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employ-
ees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the
Administrative Agent hereinafter, including any review of the
affairs of the Credit Parties, shall be deemed to constitute
any representation or warranty by the Administrative Agent to
the Issuing Bank, the Swing Line Lender or any Lender. The
Issuing Bank, the Swing Line Lender and each Lender repre-
sents to the Administrative Agent that it has, independently<PAGE>
and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as
it has deemed appropriate, made its own evaluation of and
investigation into the business, operations, Property,
financial and other condition and creditworthiness of the
Credit Parties and made its own decision to enter into this
Agreement. The Issuing Bank, the Swing Line Lender and each
Lender also represents that it will, independently and
without reliance upon the Administrative Agent, the Issuing
Bank, the Swing Line 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 analysis,
evaluations and decisions in taking or not taking action
under the Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and
creditworthiness of the Credit Parties. Except for notices,
reports and other documents expressly required to be
furnished to the Issuing Bank, the Swing Line Lender and the
Lenders by the Administrative Agent under the Loan Documents,
the Administrative Agent shall not have any duty or
responsibility to provide the Issuing Bank, the Swing Line
Lender or any Lender with any credit or other information
concerning the business, operations, Property, financial and
other condition or creditworthiness of the Credit Parties
which may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
G. Indemnification
Each Lender agrees to indemnify and reimburse the
Administrative Agent in its capacity as such (to the extent
not promptly reimbursed by the Credit Parties and without
limiting the obligation of the Credit Parties to do so), pro
rata according to (i) at any time when no Loans are
outstanding, its Commitment Percentage, or if no Commitments
then exist, its Commitment Percentage on the last day on
which Commitments did exist, and (ii) at any time when Loans
are outstanding (x) if the Commitments then exist, its
Commitment Percentage or (y) if the Commitments have been
terminated or otherwise no longer exist, the percentage equal
to the fraction (A) the numerator of which is the Credit
Exposure of such Lender and (B) the denominator of which is
the Aggregate Credit Exposure, from and against any and all
liabilities, obligations, losses, damages, penalties, ac-
tions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever including any amounts paid to the Lenders
(through the Administrative Agent) by the Credit Parties pur-
suant to the terms of the Loan Documents, that are subse-
quently rescinded or avoided, or must otherwise be restored
or returned) which may at any time (including at any time
following the payment of the Loans or the reimbursement
obligations hereunder with respect to the Letters of Credit)<PAGE>
be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of
the Loan Documents or any other documents contemplated by or
referred to herein or the transactions contemplated hereby or
thereby or any action taken or omitted to be taken by the Ad-
ministrative Agent under or in connection with the foregoing;
provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the
finally adjudicated gross negligence or willful misconduct of
the Administrative Agent. Without limitation of the fore-
going, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its pro rata share (calculated
as set forth in the first sentence of this Section) of any
unpaid costs and expenses (including reasonable fees and
expenses of counsel) payable by the Credit Parties under
Section 11.5, to the extent that the Administrative Agent has
not been reimbursed for such costs and expenses by the Credit
Parties. The failure of any Lender to reimburse the
Administrative Agent promptly upon demand for its pro rata
share (as so calculated) of any amount required to be paid by
the Lenders to the Administrative Agent as provided in this
Section shall not relieve any other Lender of its obligation
hereunder to reimburse the Administrative Agent for its pro
rata share (as so calculated) of such amount, but no Lender
shall be responsible for the failure of any other Lender to
reimburse the Administrative Agent for such other Lender's
pro rata share (as so calculated) of such amount. The agree-
ments in this Section shall survive the payment of all
amounts payable under the Loan Documents.
H. Administrative Agent in Its Individual Capacity
BNY and its affiliates may make loans to, accept
deposits from, issue letters of credit for the account of,
and generally engage in any kind of business with, the Credit
Parties or any of the Subsidiaries of the Parent as though
BNY were not the Issuing Bank, the Swing Line Lender or the
Administrative Agent hereunder. With respect to the Commit-
ment, the Swing Line Commitment, the Individual Currency
Commitment and the Letter of Credit Commitment of BNY and the
Loans made by BNY, and the Letters of Credit issued by BNY,
BNY shall have the same rights and powers under the Loan
Documents as any Lender and may exercise the same as though
it were not the Issuing Bank, the Swing Line Lender or the
Administrative Agent, and the terms "Lender" and "Lenders"
shall in each case include BNY.
I. Successor Administrative Agent
If at any time the Administrative Agent deems it
advisable, in its sole discretion, it may submit to each of
the Issuing Bank, the Swing Line Lender and each Lender a<PAGE>
written notice of its resignation as Administrative Agent un-
der the Loan Documents, such resignation to be effective upon
the written acceptance of the duties of the Administrative
Agent under the Loan Documents by a successor Administrative
Agent appointed by the Required Lenders, provided, however,
that if no such appointment is made and given within 30 days
after the delivery of such notice of resignation, the
Administrative Agent shall have the right to appoint a
successor Administrative Agent. A successor Administrative
Agent shall be a commercial bank organized under the laws of
the United States of America or any State thereof and having
a combined capital, surplus, and undivided profits of at
least $500,000,000 and, provided that no Default or Event of
Default shall exist, shall be reasonably satisfactory to the
Parent. Upon the acceptance of any appointment as Ad-
ministrative 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's rights, powers,
privileges and duties as Administrative Agent under the Loan
Documents shall be terminated. The Credit Parties, the
Issuing Bank, the Swing Line Lender and the Lenders shall
execute such documents as shall be necessary to effect such
appointment. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of the
Loan Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
XI. OTHER PROVISIONS
A. Amendments and Waivers
(a) With the written consent of the Required Lend-
ers, the Administrative Agent, the Parent and the other ap-
propriate Credit Parties may, from time to time, enter into
written amendments, supplements or modifications of any of
the Loan Documents and, with the consent of the Required
Lenders, the Administrative Agent on behalf of the Issuing
Bank, the Swing Line Lender and the Lenders may execute and
deliver to any such parties a written instrument waiving or
granting a consent to a departure from, on such terms and
conditions as the Administrative Agent may specify in such
instrument, any of the requirements of any of the Loan
Documents or any Default or Event of Default and its con-
sequences; provided, however, that:
(i) no such amendment, supplement, modification,
waiver or consent shall increase or decrease the Commitment
of any Lender without the consent of such Lender, or increase
or decrease any Individual Currency Commitment of any Lender
without the consent of such Lender;<PAGE>
(ii) without the consent of all of the Lenders,
(A) extend the Maturity Date, (B) decrease the rate or extend
the time of payment of interest of, or extend the time of
payment or forgive the principal amount of, or change the pro
rata allocation of payments under, any Loan or reimbursement
obligation with respect to any Letter of Credit, (C) decrease
or extend the time of payment of the Facility Fee or Letter
of Credit Commissions, (D) change the provisions of Sections
2.14, 11.1 or 11.7(a), (E) change the definition of Required
Lenders, (F) change the definition of Core Currencies so as
to add any additional currency as a Core Currency, (G) re-
lease the Guaranty, (H) change the several nature of the
obligations of the Lenders under the Loan Documents, or (I)
increase the Aggregate Commitments to an amount in excess of
$160,000,000;
(iii) without the written consent of the Issuing
Bank, no such amendment, supplement, modification or waiver
shall change the Letter of Credit Commitment, change the
amount or the time of payment of the Letter of Credit Commis-
sions, or change any other term or provision which relates to
the Letter of Credit Commitment or the Letters of Credit;
(iv) without the written consent of the Swing
Line Lender, no such amendment, supplement, modification or
waiver shall change the Swing Line Commitment, change the
amount or the time of payment of the Swing Line Loans or
interest thereon or change any other term or provision which
relates to the Swing Line Commitment or the Swing Line Loans;
and
(v) without the written consent of the
Administrative Agent, no such amendment, supplement,
modification or waiver shall amend, modify or waive any
provision of Section 10 or otherwise change any of the rights
or obligations of the Administrative Agent under the Loan
Documents.
(b) Notwithstanding anything to the contrary con-
tained herein, the Parent may at any time or from time to
time, at the Parent's sole cost and expense, request any
Lender to increase its Commitment, or any other bank,
insurance company, pension fund, mutual fund or other
financial institution (each a "Proposed Lender"; each such
Proposed Lender to be reasonably satisfactory to the Swing
Line Lender and the Issuing Bank) to provide a new
Commitment, by submitting a supplement to this Agreement to
the Administrative Agent, the Issuing Bank, the Swing Line
Lender and the Credit Parties. If such supplement is in all
respects satisfactory to it, the Administrative Agent, the
Issuing Bank, the Swing Line Lender, the Parent, each other
Credit Party and such Lender or Proposed Lender, as the case
may be, shall each execute a copy thereof and deliver a copy
thereof to the Administrative Agent, the Parent and such<PAGE>
Lender or such Proposed Lender, as the case may be. Upon
execution and delivery of such supplement, (i) in the case of
such Lender, the amount of such Lender's Commitment shall be
increased to the amount set forth in such supplement, (ii) in
the case of such Proposed Lender, such Proposed Lender shall
become a party hereto and shall for all purposes of this
Agreement and the other Loan Documents be deemed a "Lender"
with a Commitment and one or more Individual Currency Commit-
ments in the respective amounts set forth in such supplement
and (iii) in each case, the Commitments and the Commitment
Percentages set forth in Exhibit A-1 and the Individual Com-
mitments set forth in Exhibit A-2 shall be adjusted accord-
ingly by the Administrative Agent and a new Exhibit A-1 and a
new Exhibit A-2 shall be distributed by the Administrative
Agent to the Parent (on behalf of all Borrowers) and each
Lender; provided, however, that:
(x) immediately after giving effect thereto, the
Aggregate Commitments shall not exceed $160,000,000; and
(y) notwithstanding anything to the contrary con-
tained in Section 11.7, if immediately after giving effect to
the events described in Sections 11.1(b)(i) or 11.1(b)(ii),
as the case may be, Revolving Loans shall or would be
outstanding, then such Lender or such Proposed Lender, as the
case may be, shall enter into a master assignment and
acceptance agreement with the other Lenders in all respects
reasonably satisfactory to the other Lenders, pursuant to
which each other Lender shall sell, assign, transfer and
negotiate to it a portion of its Revolving Loans necessary to
reflect the Commitments as adjusted in accordance with
Section 11.1(b)(iii).
(c) Any such amendment, supplement, modification
or waiver pursuant to this Section 11.1 shall be binding upon
the parties to the applicable agreement, all present and fu-
ture Lenders and the Administrative Agent. In the case of
any waiver, the parties to the Loan Documents, the Issuing
Bank, the Swing Line Lender, the Lenders and the
Administrative Agent shall be restored to their former
position and rights thereunder to the extent provided for in
such waiver, and any Default or Event of Default waived shall
not extend to any subsequent or other Default or Event of De-
fault, or impair any right consequent thereon. The Loan
Documents may not be amended orally or by any course of
conduct.
(d) If any assignment made pursuant to subsection
(b)(y) above shall be made to any Proposed Lender and such
Proposed Lender is not a U.S. Person, such Proposed Lender
shall furnish such certificates, documents or other evidence
to the Parent, the Borrowers, the Lenders and the Administra-
tive Agent as shall be required by Section 2.13(e) or
2.13(f).<PAGE>
B. Notices
All notices and other communications under the
Loan Documents shall be given to the parties hereto at the
following addresses:
(i) if to the Parent or a Borrower, at its Address
for Notices set forth on Exhibit S or as set forth on the ap-
plicable Borrower Addendum;
(ii) if to any Lender, at its Address for No-
tices set forth on Exhibit R;
(iii) if to the Administrative Agent, at its Ad-
dress for Notices set forth on Exhibit Q;
(iv) if to the Swing Line Lender, at its Address
for Notices set forth on Exhibit R;
(v) if to the Issuing Bank, at its Address for No-
tices set forth on Exhibit R;
or in any of the foregoing cases at such other address
and/or to such other Person as a party hereto may hereafter
specify for that purpose by written notice to the Parent, the
Borrowers and the Administrative Agent. Such notices and
other communications will be effective only if and when given
in writing, and shall be deemed to have been given three (3)
days after deposit in the mail, designated as certified mail,
return receipt requested, postage-prepaid, at the applicable
address specified above, or when delivered at the applicable
address specified above, or when sent by telecopy addressed
to the party to which such notice is directed at its address
determined as provided above and receipt is confirmed, except
that any notice, request or demand by the Parent or any Bor-
rower to or upon the Administrative Agent, the Swing Line
Lender, the Issuing Bank or the Lenders pursuant to Sections
2.3, 2.6, 2.9, 2.10, 2.11, 2.12 or 2.19 shall not be effec-
tive until received. Any party to a Loan Document may rely
on signatures of the parties thereto which are transmitted by
fax or other electronic means as fully as if originally
signed.
C. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising,
on the part of the Administrative Agent, the Swing Line
Lender, the Issuing Bank or any Lender, any right, remedy,
power or privilege under the Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under the Loan
Documents preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges under the Loan<PAGE>
Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
D. Survival of Representations and Warranties
All representations and warranties made under the
Loan Documents and in any document, certificate or statement
delivered pursuant thereto or in connection therewith shall
survive the execution and delivery thereof.
E. Payment of Expenses and Taxes
The Parent and each Borrower (to the extent of
such other Borrower's Proportionate Share of the amount at
issue) severally agrees, promptly upon presentation of a
statement or invoice therefor, and whether any Loan is made,
or any Letter of Credit is issued (i) to pay or reimburse the
Administrative Agent for all of the Administrative Agent's
out-of-pocket costs and expenses reasonably incurred in con-
nection with the preparation of the Loan Documents and any
amendment, supplement or modification (whether or not
executed) to the Loan Documents, any documents prepared in
connection therewith and the consummation of the transactions
contemplated thereby, including the reasonable fees and
disbursements of Special Counsel, (ii) to pay or reimburse
the Administrative Agent, the Issuing Bank, the Swing Line
Lender and the Lenders for all of their respective costs and
expenses, including reasonable fees and disbursements of
counsel, incurred in connection with (A) any Default or Event
of Default and any enforcement or collection proceedings
resulting therefrom or in connection with the negotiation of
any restructuring or "work-out" (whether consummated or not)
of the obligations of the Parent and the Borrowers under the
Loan Documents and (B) the enforcement of this Section, (iii)
to pay, indemnify, and hold each Lender, the Swing Line
Lender, the Issuing Bank and the Administrative Agent harm-
less from and against, any and all recording and filing fees
and any and all liabilities with respect to, or resulting
from any delay in paying, stamp, excise and other similar
taxes, if any, which may be payable or determined to be pay-
able in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Loan Documents and any
such other documents, and (iv) to pay, indemnify and hold
each Lender, the Swing Line Lender, the Issuing Bank and the
Administrative Agent and each of their respective officers,
directors and employees harmless from and against any and all
other liabilities, obligations, claims, losses, damages, pen-
alties, actions, judgments, suits, costs, expenses or dis-
bursements of any kind or nature whatsoever (including
reasonable counsel fees and disbursements) with respect to
the enforcement and performance of the Loan Documents and the
use of the proceeds of the Loans and the Letters of Credit<PAGE>
(all the foregoing, collectively, the "indemnified li-
abilities"); provided, however, that neither the Parent nor
the Borrowers shall have any obligation hereunder to pay in-
demnified liabilities to the Administrative Agent, the Swing
Line Lender, the Issuing Bank or any Lender arising from the
finally adjudicated gross negligence or willful misconduct of
the Administrative Agent, the Swing Line Lender, the Issuing
Bank or such Lender or claims between one indemnified party
and another indemnified party. The agreements in this
Section shall survive the termination of the Aggregate Com-
mitments, the Swing Line Commitment, the Letter of Credit
Commitment and the Individual Currency Commitments and the
payment of all amounts payable under the Loan Documents.
F. Determination of Dollar Equivalent
For purposes of the Loan Documents, the Dollar
Equivalent of each Alternate Currency Loan and each Letter of
Credit designated in an Alternate Currency shall be
recalculated (i) on the first day of each Borrowing/Issuance
Period, (ii) on the date that the Agent shall have received a
Bid Accept/Reject Letter accepting a Bid or a Negotiated Rate
Confirmation, (iii) on each date that the Aggregate
Commitments are, or the Swing Line Commitment or any Indi-
vidual Currency Commitment is, reduced and (iv) on the last
Business Day of each month unless the Dollar Equivalent was
recalculated pursuant to clause (i), (ii) or (iii) during
such month. The Dollar Equivalent for each Alternate Cur-
rency Loan and each Letter of Credit designated in an
Alternate Currency shall remain in effect until the same is
recalculated by the Administrative Agent as provided above
and notice of such recalculation is received by the Parent,
it being understood that until such notice is received, the
Dollar Equivalent shall be that Dollar Equivalent. The
Administrative Agent shall promptly notify the Parent, the
Issuing Bank, the Swing Line Lender and the Lenders of each
such determination of the Dollar Equivalent for each Al-
ternate Currency Loan and each Letter of Credit designated in
an Alternate Currency.
G. Assignments and Participations
(a) This Agreement and the other Loan Documents
shall be binding upon and inure to the benefit of the Parent,
the Borrowers, the Lenders, the Swing Line Lender, the
Issuing Bank, the Administrative Agent, and their respective
successors and assigns, except that neither the Parent nor
the Borrowers may assign, delegate or transfer any of their
rights or obligations under the Loan Documents without the
prior written consent of the Administrative Agent, the
Issuing Bank, the Swing Line Lender and each Lender.
(b) Except as provided in Section 11.1(b), each
Lender shall have the right at any time, upon written notice<PAGE>
to the Administrative Agent of its intent to do so, to sell,
assign, transfer or negotiate all or any part of such
Lender's rights and obligations under the Loan Documents to
one or more of its affiliates, to one or more of the other
Lenders (or to affiliates of such other Lenders) or, with the
prior written consent of the Parent, the Swing Line Lender
and the Issuing Bank (which consents shall not be
unreasonably withheld), to sell, assign, transfer or
negotiate all or any part of such Lender's rights and
obligations under the Loan Documents to any other bank,
insurance company, pension fund, mutual fund or other finan-
cial institution, provided that (i) each such sale, assign-
ment, transfer or negotiation (other than sales, assignments,
transfers or negotiations (x) to affiliates of such Lender or
(y) of a Lender's entire interest) shall be in a minimum
amount of $5,000,000, and (ii) there shall be paid to the Ad-
ministrative Agent by the assigning or assignee Lender a fee
(the "Assignment Fee") of $3,000. For each assignment, the
parties to such assignment shall execute and deliver to the
Administrative Agent for its acceptance and recording an As-
signment and Acceptance Agreement. Upon such execution, de-
livery, acceptance and recording by the Administrative Agent,
from and after the effective date specified in such As-
signment and Acceptance Agreement, the assignee thereunder
shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, the assignor Lender
thereunder shall be released from its obligations under the
Loan Documents. Upon any such sale, assignment or other
transfer, the Commitments and the Commitment Percentages set
forth in Exhibit A-1, and the Individual Currency Commitments
set forth in Exhibit A-2, shall be adjusted accordingly by
the Administrative Agent and a new Exhibit A-1 and a new
Exhibit A-2 shall be distributed by the Administrative Agent
to the Parent (on behalf of all Borrowers) and each Lender.
(c) Each Lender may grant participations in all or
any part of its rights and obligations under the Loan
Documents to one or more of its affiliates, to one or more of
the other Lenders (or to affiliates of such other Lenders) or
to one or more other banks, insurance companies, pension
funds, mutual funds or other financial institutions, provided
that (i) such Lender's obligations under the Loan Documents
shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties to the Loan Documents for
the performance of such obligations, (iii) the Borrowers, the
Administrative Agent, the Swing Line Lender, the Issuing Bank
and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents, (iv) no sub-
participations shall be permitted and (v) the voting rights
of any holder of any participation shall be limited to deci-
sions that in accordance with Section 11.1 require the
consent of all of the Lenders. The Parent and the Borrowers
acknowledge and agree that any such participant shall for<PAGE>
purposes of Sections 2.13, 2.14, 2.15, 2.22, 11.5 and 11.10,
be deemed to be a "Lender"; provided, however, neither the
Parent nor the Borrowers shall, at any time, be obligated to
pay any participant in any interest of any Lender hereunder
any sum in excess of the sum which the Parent and the
Borrowers would have been obligated to pay to such Lender in
respect of such interest had such Lender not sold such par-
ticipation.
(d) If any (i) assignment is made pursuant to sub-
section (b) above or (ii) any participation is granted pursu-
ant to subsection (c) above, shall be made to any Person that
is not a U.S. Person, such Person shall furnish such certifi-
cates, documents or other evidence to the Parent, the Borrow-
ers and the Administrative Agent, in the case of clause (i)
and to the Parent, the Borrowers and the Lender which sold
such participation in the case of clause (ii), as shall be
required by Section 2.13(e) or 2.13(f).
(e) No Lender shall, as between and among the Par-
ent, the Borrowers, the Administrative Agent, the Swing Line
Lender, the Issuing Bank and such Lender, be relieved of any
of its obligations under the Loan Documents as a result of
any sale, assignment, transfer or negotiation of, or granting
of participations in, all or any part of its rights and
obligations under the Loan Documents, except that a Lender
shall be relieved of its obligations under the Loan Documents
to the extent of any such sale, assignment, transfer, or
negotiation of all or any part of its obligations under the
Loan Documents pursuant to subsection (b) above.
(f) Notwithstanding anything to the contrary con-
tained in this Section, any Lender may at any time or from
time to time assign all or any portion of its rights under
the Loan Documents to a Federal Reserve Bank, provided that
any such assignment shall not release such assignor from its
obligations thereunder.
H. Counterparts
Each of the Loan Documents may be executed by one
or more of the parties thereto on any number of separate
counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same document. It
shall not be necessary in making proof of any Loan Document
to produce or account for more than one counterpart signed by
the party to be charged. An executed counterpart of any Loan
Document and of any amendment, modification, consent or
waiver thereto or thereof transmitted by fax shall be deemed
to be an originally executed counterpart. A copy of any Loan
Document signed by all the parties thereto shall be deposited
with the Parent (on behalf of all Borrowers) and the Adminis-
trative Agent. Any party to any Loan Document may rely upon
the signatures of any other party thereto which are<PAGE>
transmitted by fax or other electronic means to the same ex-
tent as if originally signed.
I. Adjustments; Set-off
(a) If any Lender (a "Benefited Lender") shall at
any time receive any payment of all or any part of its Loans,
or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to
in Section 9.1 (g) or (h), or otherwise) in a greater
proportion than any such payment to and collateral received
by any other Lender in respect of such other Lender's Loans,
or interest thereon, such Benefited Lender shall purchase for
cash from each of the other Lenders such portion of each such
other Lender's Loans, and shall provide each of such other
Lenders with the benefits of any such collateral, or the pro-
ceeds thereof, as shall be necessary to cause such Benefited
Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders,
provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrowers agree that
each Lender so purchasing a portion of another Lender's Loans
may exercise all rights of payment (including rights of set-
off, to the extent not prohibited by law) with respect to
such portion as fully as if such Lender were the direct
holder of such portion.
(b) In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence of an Event of
Default and the acceleration of the obligations owing in con-
nection with the Loan Documents, or at any time upon the oc-
currence and during the continuance of an Event of Default,
under Section 9.1(a), (b), (g) or (h), each Lender shall have
the right, without prior notice to the Parent or the Borrow-
ers, any such notice being expressly waived by the Parent and
the Borrowers to the extent not prohibited by applicable law,
to set-off and apply against any indebtedness, whether
matured or unmatured, of the Parent or the Borrowers to such
Lender, any amount owing from such Lender to the Parent or
the Borrowers, at, or at any time after, the happening of any
of the above-mentioned events. To the extent not prohibited
by applicable law, the aforesaid right of set-off may be
exercised by such Lender against the Parent and the Borrowers
or against any trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver,
or execution, judgment or attachment creditor of the Parent
or the Borrowers, or against anyone else claiming through or
against the Parent or the Borrowers or such trustee in
bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or at-<PAGE>
tachment creditor, notwithstanding the fact that such right
of set-off shall not have been exercised by such Lender prior
to the making, filing or issuance, or service upon such
Lender of, or of notice of, any such petition, assignment for
the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution,
subpoena, order or warrant. Each Lender agrees promptly to
notify the Parent, the Borrowers and the Administrative Agent
after any such set-off and application made by such Lender,
provided that the failure to give such notice shall not
affect the validity of such set-off and application. With
respect to each Borrower, the right of set-off provided for
in this Section 11.9(b) shall be limited to the obligations
of such Borrower with respect to Loans made to it and to its
Proportionate Share of other costs, expenses and other
amounts.
J. Indemnity
Each of the Borrowers to the extent of its Propor-
tionate Share and the Parent severally agree to indemnify and
hold harmless the Administrative Agent, the Swing Line
Lender, the Issuing Bank and each Lender and their respective
affiliates, directors, officers, employees, attorneys and
agents (each an "Indemnified Person") with respect to each
Indemnified Person's status under the Loan Documents from and
against any loss, cost, liability, damage or expense
(including the reasonable fees and disbursements of counsel
of such Indemnified Person, including all local counsel hired
by any such counsel) incurred by such Indemnified Person in
investigating, preparing for, defending against, or providing
evidence, producing documents or taking any other action in
respect of, any commenced or threatened litigation,
administrative proceeding or investigation under any federal
securities law or any other statute of any jurisdiction, or
any regulation, or at common law or otherwise, which is al-
leged to arise out of or is based upon (i) any untrue state-
ment or alleged untrue statement of any material fact by the
Parent or the Borrowers in any document or schedule executed
or filed with any Governmental Authority by or on behalf of
the Parent or the Borrowers; (ii) any omission or alleged
omission to state any material fact required to be stated in
such document or schedule, or necessary to make the
statements made therein, in light of the circumstances under
which made, not misleading; (iii) any acts, practices or
omissions or alleged acts, practices or omissions of the
Parent or the Borrowers or their respective agents relating
to the use of the proceeds of any or all borrowings made by
the Borrowers which are alleged to be in violation of Section
2.18, or in violation of any federal securities law or of any
otherstatute, regulation or other law of any jurisdiction ap-
plicable thereto; or (iv) any acquisition or proposed
acquisition by the Parent or the Borrowers of all or a por-
tion of the Stock, or all or a portion of the assets, of any<PAGE>
Person whether such Indemnified Person is a party thereto.
The indemnity set forth herein shall be in addition to any
other obligations or liabilities of the Parent and the
Borrowers to each Indemnified Person under the Loan Documents
or at common law or otherwise, and shall survive any termina-
tion of the Loan Documents, the expiration of the Commit-
ments, the Letter of Credit Commitment, the Swing Line
Commitment, the Individual Currency Commitments, and the pay-
ment of all indebtedness of the Parent and the Borrowers
under the Loan Documents, provided that the Parent and the
Borrowers shall have no obligation under this Section to an
Indemnified Person with respect to any of the foregoing to
the extent found in a final judgment of a court having
jurisdiction to have resulted out of the gross negligence or
wilful misconduct of such Indemnified Person or arising from
claims between one such Indemnified Person and another such
Indemnified Person.
K. GOVERNING LAW
THE LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES THERETO SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
L. Severability
Every provision of this Agreement and the other
Loan Documents is intended to be severable, and if any term
or provision hereof or thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof or thereof
shall not be affected or impaired thereby, and any in-
validity, illegality or unenforceability in any jurisdiction
shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.
M. Integration
All exhibits to this Agreement and any other Loan
Document shall be deemed to be a part hereof or thereof, as
the case may be. Except for agreements between the Adminis-
trative Agent, the Swing Line Lender, the Issuing Bank and
the Parent with respect to certain fees, the Loan Documents
embody the entire agreement and understanding among the
Parent, the Borrowers, the Administrative Agent, the Swing
Line Lender, the Issuing Bank and the Lenders with respect to
the subject matter thereof and supersede all prior agreements
and understandings among the Parent, the Borrowers, the
Administrative Agent, the Swing Line Lender, the Issuing Bank
and the Lenders with respect to the subject matter thereof.
N. Judgment Currency<PAGE>
(a) Each Credit Party's obligations under the Loan
Documents to make payments in the Applicable Currency (the
"Obligation Currency") shall not be discharged or satisfied
by any tender or recovery pursuant to any judgment expressed
in or converted into any currency other than the Obligation
Currency, except to the extent that, on the Business Day im-
mediately following the date of such tender or recovery, the
Administrative Agent, the Swing Line Lender, the Issuing Bank
or the applicable Lender, as the case may be, may, in ac-
cordance with normal banking procedures, purchase the Obliga-
tion Currency with such other currency. If for the purpose of
obtaining or enforcing judgment against any Credit Party in
any court or in any jurisdiction, it becomes necessary to
convert into any currency other than the Obligation Currency
(such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in the Obligation
Currency, the conversion shall be made at the rate of
exchange at which, in accordance with normal banking proce-
dures in the relevant jurisdiction, the Obligation Currency
could be purchased with the Judgment Currency as of the day
immediately preceding the day on which the judgment is given
(such Business Day being hereinafter referred to as the
"Judgment Currency Conversion Date").
(b) If the amount of Obligation Currency purchased
pursuant to the last sentence of subsection (a) above is less
than the sum originally due in the Obligation Currency, the
applicable Credit Party covenants and agrees to indemnify the
applicable recipient against such loss, and if the Obligation
Currency so purchased exceeds the sum originally due to such
recipient, such recipient agrees to remit to the applicable
Credit Party such excess.
O. Confidentiality
Any information disclosed by any Credit Party to
the Administrative Agent or any of the Lenders shall be used
solely for purposes of the Loan Documents and not in any
other manner detrimental to the Parent and, if such informa-
tion is not otherwise in the public domain, shall not be dis-
closed by the Administrative Agent or such Lender to any
other Person except (i) to its independent accountants, legal
counsel and affiliates (it being understood that the Persons
to whom such disclosure is made will be informed of the
confidential nature of such information and instructed to
keep such information confidential), (ii) pursuant to
statutory and regulatory requirements or the request of bank
examiners, (iii) pursuant to any mandatory court order,
subpoena or other legal process, (iv) to the Administrative
Agent, the Issuing Bank, the Swing Line Lender or any other
Lender, (v) pursuant to any agreement heretofore or hereafter
made between such Lender and the Parent which permits such
disclosure, (vi) in connection with the exercise of any
remedy under the Loan Documents or (vii) subject to an<PAGE>
agreement containing provisions substantially the same as
those of this Section, to any participant in or assignee of,
or prospective participant in or assignee of, any Loan,
Letter of Credit Commitment, Individual Currency Commitment
or Commitment (it being understood that prior to any such
disclosures contemplated by clauses (ii) and (iii) above, the
Agent or such Lender shall, if practicable, give the Parent
prior written notice of such disclosure).
P. CONSENT TO JURISDICTION
EACH CREDIT PARTY HEREBY IRREVOCABLY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR
FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS. EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED OR NOT PROHIBITED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
Q. Service of Process
Each Credit Party hereby irrevocably consents to
the service of process in any suit, action or proceeding by
sending the same by certified mail, return receipt requested
or by overnight courier service, to the address of such
Credit Party set forth in Section 11.2.
R. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification,
waiver, consent or amendment thereto shall affect the right
of the Administrative Agent, the Swing Line Lender, the
Issuing Bank or any Lender to serve process in any manner
permitted by law or limit the right of the Administrative
Agent, the Swing Line Lender, the Issuing Bank or any Lender
to bring proceedings against any Credit Party in the courts
of any jurisdiction or jurisdictions in which such Credit
Party may be served.
S. WAIVER OF TRIAL BY JURY
EACH OF THE ADMINISTRATIVE AGENT, THE SWING LINE
LENDER, THE ISSUING BANK, THE LENDERS AND EACH CREDIT PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
T. International Banking Facilities<PAGE>
The Parent and the Borrowers acknowledge that some
or all of the Lenders may, in connection with the Loan Docu-
ments, utilize an International banking facility (as defined
in Regulation D).
Each Borrower which is an entity located outside
the United States, understands that it is the policy of the
Board of Governors of the Federal Reserve System that
deposits received by International banking facilities may be
used only to support the non-U.S. operations of a depositor
(or its foreign affiliates) located outside the United States
and that extensions of credit by International banking
facilities may be used only to finance the non-U.S.
operations of a customer (or its foreign affiliates) located
outside the United States.
Each Borrower which is an entity located outside
the United States acknowledges that the proceeds of its bor-
rowings hereunder from an International banking facility will
be used solely to finance its operations outside the United
States, or that of its foreign affiliates.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
TIFFANY & CO.,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY AND COMPANY,
a New York corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. INTERNATIONAL,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
SOCIETE FRANCAISE POUR LE
DEVELOPPMENT DE LA PORCELAINE
D'ART (S.A.R.L.), a French
corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. OF NEW YORK LIMITED,
a Hong Kong corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY-FARAONE S.P.A.,<PAGE>
an Italian corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. JAPAN INC.,
a Delaware corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. PTE. LTD.,
a Singapore corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO.,
a United Kingdom corporation
By: ________________________
Name: ________________________
Title: ________________________
TIFFANY & CO. WATCH FACTORY S.A.,
a Swiss corporation
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
THE BANK OF NEW YORK,
as the Swing Line Lender, as
the Issuing Bank, as a Lender,
as Arranging Agent and as
Administrative Agent
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
CHEMICAL BANK
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
CREDIT SUISSE
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
THE DAI-ICHI KANGYO BANK,
LIMITED (NEW YORK BRANCH)
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year
first above written.
THE FUJI BANK, LTD.
By: ________________________
Name: ________________________
Title: ________________________<PAGE>
