THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
By and Among
STARTER CORPORATION,
STARTER GALT, INC.,
BANKBOSTON, N.A. AS ADMINISTRATIVE AGENT
CITIBANK, N.A. AS SYNDICATION AGENT,
AND
THE OTHER LENDERS WHICH ARE OR MAY BECOME PARTIES HERETO
WITH
BANCBOSTON SECURITIES, INC. AS ARRANGER
Dated: as of March 31, 1998
TABLE OF CONTENTS
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.........................1
ss.1.1. Definitions.............................................1
ss.1.2. Rules of Interpretation.................................2
ss.2. THE REVOLVING CREDIT FACILITY...................................2
ss.2.1. Commitment to Lend......................................2
ss.2.2. Facility Fee............................................2
ss.2.3. Voluntary Reduction of Total Commitment.................2
ss.2.4. The Notes...............................................3
ss.2.5. Interest on Loans. Except as otherwise
provided inss.5.10,.....................................3
ss.2.6. Requests for Loans......................................3
ss.2.7. Conversion Options......................................4
ss.2.8. Funds for Loans.........................................4
ss.2.9. Change in Borrowing Base................................5
ss.2.10. Settlement; Application of Repayments
of Revolving Credit Loans...............................5
ss.2.11. Operating Accounts......................................7
ss.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.........................7
ss.3.1. Maturity................................................7
ss.3.2. Mandatory Repayments of Loans. ........................7
ss.3.3. Optional Repayments of Loans............................8
ss.4. LETTERS OF CREDIT...............................................9
ss.4.1. Letter of Credit Facility...............................9
ss.4.2. [INTENTIONALLY OMITTED].................................10
ss.4.3. Reimbursement Obligation of the Borrowers...............10
ss.4.4. Letter of Credit Payments...............................11
ss.4.5. Obligations Absolute....................................12
ss.4.6. Reliance by Issuer......................................12
ss.4.7. Letter of Credit Fees...................................13
ss.4.8. Existing Letters of Credit..............................13
ss.5. CERTAIN GENERAL PROVISIONS......................................13
ss.5.1. Certain Fees............................................14
ss.5.2. Funds for Payments......................................14
ss.5.3. Computations............................................14
ss.5.4. Inability to Determine LIBOR Rate.......................14
ss.5.5. Illegality..............................................15
ss.5.6. Additional Costs, Etc...................................15
ss.5.7. Capital Adequacy........................................16
ss.5.8. Certificate.............................................17
ss.5.9. Indemnity...............................................17
ss.5.10. Interest After Default..................................17
ss.5.11. Concerning Joint and Several Liability
of the Borrower.s.......................................17
ss.5.12. Interest................................................19
ss.6. COLLATERAL SECURITY.............................................19
ss.7. REPRESENTATIONS AND WARRANTIES..................................19
ss.7.1. Corporate Authority; Ownership..........................19
ss.7.2. No Business Activity; Subsidiaries......................20
ss.7.3. Governmental Approvals..................................20
ss.7.4. Title to Properties; Leases.............................21
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ss.7.5. Financial Statements....................................21
ss.7.6. No Material Changes, Etc................................21
ss.7.7. Franchises, Patents, Copyrights, Etc....................21
ss.7.8. Litigation..............................................22
ss.7.9. No Materially Adverse Contracts, Etc....................22
ss.7.10. Compliance with Other Instruments, Laws, Etc............22
ss.7.11. Tax Status..............................................22
ss.7.12. No Event of Default.....................................22
ss.7.13. Holding Company and Investment Company Acts.............23
ss.7.14. Absence of Financing Statements, Etc....................23
ss.7.15. Perfection of Security Interest.........................23
ss.7.16. Certain Transactions....................................23
ss.7.17. Employee Benefit Plans..................................23
ss.7.18. Regulations U and X.....................................24
ss.7.19. Environmental Compliance................................24
ss.7.20. Fiscal Year.............................................26
ss.7.21. Other Representations...................................26
ss.7.22. Bank Accounts...........................................26
ss.7.23. Solvency................................................26
ss.7.24. Year 2000 Problem.......................................26
ss.7.25. Full Disclosure.........................................27
ss.8. AFFIRMATIVE COVENANTS OF THE BORROWERS..........................27
ss.8.1. Punctual Payment........................................27
ss.8.2. Maintenance of Office...................................27
ss.8.3. Records and Accounts....................................27
ss.8.4. Financial Statements, Certificates and Information......27
ss.8.5. Notices.................................................29
ss.8.6. Corporate Existence; Maintenance of Properties..........31
ss.8.7. Insurance...............................................31
ss.8.8. Taxes...................................................31
ss.8.9. Inspection of Properties and Books, Etc.................32
ss.8.10. Compliance with Laws, Contracts, Licenses, and Permits..33
ss.8.11. Employee Benefit Plans..................................34
ss.8.12. Use of Proceeds.........................................34
ss.8.13. Business................................................34
ss.8.14. Further Assurances......................................34
ss.8.15. Payment of Wages........................................34
ss.8.16. Cash Management System..................................34
ss.8.17. Bank Accounts...........................................34
ss.8.18. Lender Meeting..........................................35
ss.8.19. Interest Rate Protection Arrangements...................35
ss.8.20. Auditor's Opinion. ....................................35
ss.8.21. Consulting Arrangements. ..............................35
ss.8.22. Subordination Agreement. ..............................35
ss.9. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS.....................35
ss.9.1. Restrictions on Indebtedness............................35
ss.9.2. Restrictions on Liens...................................36
ss.9.3. Restrictions on Investments.............................37
ss.9.4. Distributions...........................................38
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ss.9.5. Merger, Consolidation and Disposition of Assets.........38
ss.9.6. Sale and Leaseback......................................39
ss.9.7. Business................................................39
ss.9.8. Compliance with Environmental Laws......................39
ss.9.9. Employee Benefit Plans..................................39
ss.9.10. Additional Shares.......................................40
ss.9.11. Change of Fiscal Year...................................40
ss.9.12. Total Commitment Amount.................................40
ss.9.13. Accounting Practices....................................40
ss.9.14. Limitation on Other Restrictions on Amendment of Loan
Documents...............................................40
ss.10. FINANCIAL COVENANTS OF THE BORROWERS...........................40
ss.10.1. Fixed Charge Coverage Ratio............................40
ss.10.2. Consolidated Net Worth.................................40
ss.11. CONDITIONS TO EFFECTIVE DATE...................................41
ss.11.1. Loan Documents.........................................41
ss.11.2. Certified Copies of Charter Documents..................41
ss.11.3. Corporate Action.......................................41
ss.11.4. Incumbency Certificates................................41
ss.11.5. Legality of Transactions...............................41
ss.11.6. Validity of Liens......................................41
ss.11.7. UCC Search Results.....................................42
ss.11.8. Certificates of Insurance..............................42
ss.11.9. Proceedings and Documents..............................42
ss.11.10. Borrowers' Condition...................................42
ss.11.11. Opinion of Counsel.....................................42
ss.11.12. Payment of Arranger's and Administrative Agent's Fees..42
ss.11.13. Consulting Arrangements................................42
ss.11.14. Projections............................................43
ss.11.15. Cash Management System.................................43
ss.11.16. Borrowing Base Report..................................43
ss.11.17. Accounts Receivable Aging Report.......................43
ss.11.18. Field Exams............................................43
ss.11.19. Material Licensing Agreements; Licensor Consents.......43
ss.11.20. Leases; Lessor Agreements..............................43
ss.11.21. Consents...............................................43
ss.12. CONDITIONS TO ALL BORROWINGS...................................44
ss.12.1. Representations True; No Event of Default..............44
ss.12.2. No Legal Impediment....................................44
ss.12.3. Governmental Regulation................................44
ss.12.4. Proceedings and Documents..............................44
ss.12.5. Borrowing Base Report..................................44
ss.13. EVENTS OF DEFAULT; ACCELERATION; ETC...........................44
ss.13.1. Events of Default and Acceleration.....................44
ss.13.2. Termination of Commitments.............................48
ss.13.3. Remedies...............................................48
ss.13.4. Distribution of Collateral Proceeds....................48
ss.14. SETOFF.........................................................49
ss.15. THE AGENTS.....................................................50
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ss.15.1. Authorization..........................................50
ss.15.2. Employees and Agents...................................50
ss.15.3. No Liability...........................................50
ss.15.4. No Representations.....................................50
ss.15.5. Payments...............................................51
ss.15.6. Holders of Notes.......................................52
ss.15.7. Indemnity..............................................52
ss.15.8. Agents as Lenders......................................52
ss.15.9. Resignation............................................52
ss.15.10. Notification of Defaults and Events of Default.........53
ss.15.11. Duties in the Case of Enforcement......................53
ss.16. EXPENSES.......................................................53
ss.17. INDEMNIFICATION................................................54
ss.18. SURVIVAL OF COVENANTS, ETC.....................................55
ss.19. ASSIGNMENT AND PARTICIPATION...................................55
ss.19.1. Conditions to Assignment by Lenders....................55
ss.19.2. Certain Representations and Warranties; Limitations;
Covenants..............................................56
ss.19.3. Register...............................................56
ss.19.4. New Notes..............................................57
ss.19.5. Participations.........................................57
ss.19.6. Disclosure.............................................58
ss.19.7. Assignee or Participant Affiliated with the Borrowers..58
ss.19.8. Miscellaneous Assignment Provisions....................58
ss.19.9. Assignment by Borrowers................................59
ss.20. NOTICES, ETC...................................................59
ss.21. GOVERNING LAW..................................................59
ss.22. HEADINGS.......................................................60
ss.23. COUNTERPARTS...................................................60
ss.24. ENTIRE AGREEMENT, ETC..........................................60
ss.25. WAIVER OF JURY TRIAL...........................................60
ss.26. CONSENTS, AMENDMENTS, WAIVERS, ETC.............................60
ss.27. SEVERABILITY...................................................61
ss.28. LIMITATION OF LIABILITY........................................62
ss.29. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER..............62
ss.30. EFFECTIVE DATE.................................................62
ss.31. MARSHALLING....................................................62
ss.32. CONSENT TO JURISDICTION, CONSULTATION WITH COUNSEL.............63
ss.33. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. ...............63
33.1. Sharing of Information with Section 20 Subsidiary. ....63
33.2. Confidentiality. ......................................63
33.3. Prior Notification. ...................................64
33.4. Other. ................................................64
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Loan Request
Exhibit E - Borrowing Base Report
SCHEDULES
Schedule 1 - Lending Institutions
Schedule 2 - Definitions and Rules of Interpretation
Schedule 4.8 - Existing Letters of Credit
Schedule 7.2 - Ownership Interests
Schedule 7.4 - Owned Assets not listed on Balance Sheet
Schedule 7.8 - Litigation
Schedule 7.16- Permitted Transactions
Schedule 7.22- Bank Accounts
Schedule 9.1 - Permitted Indebtedness
Schedule 9.2 - Permitted Liens
Schedule 9.3 - Permitted Investments
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement")
is made as of the 31st day of March, 1998, by and among STARTER CORPORATION
("Starter"), STARTER GALT, INC. ("Starter Galt" and, together with Starter, the
"Borrowers" and each, singularly, a "Borrower"), each a Delaware corporation,
Starter having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxxx 00000 and Starter Galt having its principal place of business at 000
00xx Xxxxxx, X.X., Xxxxx Xxxxxx, Xxxx, BANKBOSTON, N.A. (formerly known as Bank
of Boston Connecticut) ("BankBoston"), and the other lending institutions listed
on Schedule 1 attached hereto (collectively, the "Lenders"), BankBoston as
Administrative Agent for itself and the other Lenders (in such capacity, the
"Administrative Agent") and CITIBANK, N.A. ("Citibank") as Syndication Agent for
itself and the other Lenders (in such capacity, the "Syndication Agent").
W I T N E S S E T H
WHEREAS, pursuant to a certain Second Amended and Restated Credit
Agreement dated as of May 13, 1997, as amended by a First Amendment Agreement
dated as of July 16, 1997, a Second Amendment Agreement dated as of September
24, 1997 and a Forbearance and Modification Agreement dated as of February 13,
1998 (as amended, the "Existing Credit Agreement"), BankBoston, CoreStates Bank,
N.A., People's Bank, National Bank of Canada, Sanwa Business Credit Corporation,
KeyBank National Association, BTM Capital Corporation, Firstrust Savings Bank
and PNC Bank, N.A. (collectively, the "Original Banks") made revolving loans and
other extensions of credit to the Borrowers in an aggregate principal amount of
up to $100,000,000 (the "Existing Indebtedness"); and
WHEREAS, it is the intention of the Borrowers, BankBoston and certain of
the Original Banks that the terms and conditions of the Existing Credit
Agreement be amended and restated in its entirety as set forth herein; and
WHEREAS, it is also the intention of the parties hereto that the Original
Banks who will not be a party to this Credit Agreement will assign to the
Lenders all of their rights and obligations under the Existing Credit Agreement
immediately prior to the occurrence of the Effective Date;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1.1. Definitions. Except as otherwise expressly provided herein,
all capitalized terms used in this Credit Agreement, the exhibits hereto and any
notes, certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Credit Agreement shall have the meanings
set forth for such terms in Schedule 2 hereto.
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ss.1.2. Rules of Interpretation. Except as otherwise expressly
provided herein, the rules of interpretation set forth in Schedule 2 hereto
shall apply to this Credit Agreement, the exhibits hereto and any notes,
certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Credit Agreement.
ss.2. THE REVOLVING CREDIT FACILITY.
ss.2.1. Commitment to Lend. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Lenders severally agrees to lend to
the Borrowers and the Borrowers may borrow, repay, and reborrow from time to
time between the Effective Date and the Maturity Date upon notice by the
Borrowers to the Administrative Agent given in accordance with ss.2.6, such sums
as are requested by the Borrowers up to a maximum aggregate amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Lender's Commitment minus such Lender's Commitment Percentage of the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations; provided that
Total Exposure (after giving effect to all amounts requested) shall not at any
time exceed an amount equal to the Maximum Available Amount; provided, further,
that the Borrowers shall not permit the Total Exposure (after giving effect to
all amounts requested) to exceed $85,000,000 (the "Clean Down Amount") during
any one (1) thirty (30) consecutive day period occurring during Starter's first
fiscal quarter in each calendar year ending after December 31, 1997. The Loans
shall be made pro rata in accordance with each Lender's Commitment Percentage.
Each request for a Loan hereunder shall constitute a representation and warranty
by the Borrowers that the conditions set forth in ss.11 and ss.12, in the case
of the initial Loans to be made on the Effective Date, and ss.12, in the case of
all other Loans, have been satisfied on the date of such request.
ss.2.2. Facility Fee. The Borrowers agree to pay to the
Administrative Agent for the respective accounts of the Lenders in accordance
with their respective Commitment Percentages a facility fee on the Total
Commitment as set forth in Column B of Schedule 1 hereto, subject to reduction
in accordance with ss.2.3, whether used or unused, at a rate per annum equal to
the Facility Fee Rate. For example, assuming that the Total Commitment has not
been reduced pursuant to ss.2.3, the Facility Fee payable in respect of the
calendar quarter beginning on January 1 of any calendar year and ending on March
31 of such calendar year shall equal the Facility Fee Rate multiplied by a Total
Commitment amount of $160,000,000 (computed based on a 360-day year and paid for
the actual number of days elapsed as provided in ss.5.3). The facility fee shall
be payable quarterly in arrears on the first day of each calendar quarter for
the immediately preceding calendar quarter (or portion thereof) commencing on
the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate. The
facility fee provided in this ss.2.2 shall accrue at all times after the
Effective Date, including at any time during which one or more of the conditions
in ss.12 are not met.
ss.2.3. Voluntary Reduction of Total Commitment. The Borrowers shall
have the right at any time and from time to time upon five (5) Business Days'
prior written notice to the Administrative Agent to reduce by $1,000,000 or any
greater integral multiple thereof or terminate entirely the Total Commitment,
whereupon the Commitments of the Lenders shall be reduced pro rata in accordance
with their
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respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice from the
Borrowers delivered pursuant to this ss.2.3, the Administrative Agent will
notify the Lenders of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrowers shall pay to the Administrative Agent
for the respective accounts of the Lenders the full amount of any facility fee
then accrued on the amount of the reduction. No reduction or termination of the
Commitments may be reinstated.
ss.2.4. The Notes. The Loans shall be evidenced by separate
promissory notes of the Borrowers in substantially the form of Exhibit A hereto
(each a "Note"), dated as of the Effective Date and completed with appropriate
insertions. One Note shall be payable to the order of each Lender in a principal
amount equal to such Lender's Commitment or, if less, the outstanding amount of
all Loans made by such Lender, plus interest accrued thereon, as set forth
below. Each Borrower irrevocably authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown Date of any Loan or at the time of
receipt of any payment of principal on such Lender's Note, an appropriate
notation on such Lender's Note Record reflecting the making of such Loan or (as
the case may be) the receipt of such payment. The outstanding amount of the
Loans set forth on such Lender's Note Record shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Note
Record shall not limit or otherwise affect the obligations of the Borrowers
hereunder or under any Note to make payments of principal of or interest on any
Note when due.
ss.2.5. Interest on Loans. Except as otherwise provided in ss.5.10,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of each
Interest Period with respect thereof at the Base Rate from time to time in
effect plus the Applicable Margin.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of each
Interest Period with respect thereto at the rate of the LIBOR Rate determined
for such Interest Period plus the Applicable Margin.
(c) The Borrowers promise to pay interest on each Loan in arrears on
each Interest Payment Date with respect thereto.
ss.2.6. Requests for Loans. The Borrowers shall give to the
Administrative Agent written notice in the form of Exhibit D hereto (or
telephonic notice confirmed in a writing in the form of Exhibit D hereto) of
each Loan requested hereunder (a "Loan Request") (i) no later than 10:00 a.m.
(Boston, Massachusetts time) on the proposed Drawdown Date and not more than
five (5) Business Days prior to the proposed Drawdown Date of any Base Rate Loan
and (ii) not less than three (3) and not more than five (5) LIBOR Business Days
prior to the proposed Drawdown Date of any LIBOR Rate Loan. Each such notice
shall specify (1) the principal amount of the Loan requested, (2) the proposed
Drawdown Date of such Loan, (3) the Interest Period for such Loan and (4) the
Type of such Loan. Promptly upon receipt of any such
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notice, the Administrative Agent shall notify each of the Lenders thereof. Each
Loan Request shall be irrevocable and binding on each Borrower and shall
obligate the Borrowers to accept the Loan requested from the Lenders on the
proposed Drawdown Date. Each Loan Request for a LIBOR Rate Loan shall be in a
minimum aggregate amount of $3,000,000 or an integral multiple thereof.
ss.2.7. Conversion Options.
(a) The Borrowers may elect from time to time to convert any
outstanding Loan to a Loan of another Type, provided that (i) with respect to
any such conversion of a Loan to a Base Rate Loan, the Borrowers shall give the
Administrative Agent not less than one (1) and not more than five (5) Business
Days' prior written notice of such election; (ii) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrowers shall give
the Administrative Agent no less than three (3) and not more than five (5) LIBOR
Business Days' prior written notice of such election; (iii) with respect to any
such conversion of a LIBOR Rate Loan into a Loan of another Type, such
conversion shall only be made on the last day of the Interest Period with
respect thereto and (iv) no Loan may be converted into a LIBOR Rate Loan when
any Default or Event of Default has occurred and is continuing. On the date on
which such conversion is being made each Lender shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its Domestic
Lending Office or its LIBOR Lending Office, as the case may be. All or any part
of outstanding Loans of any Type may be converted into a Loan of another Type as
provided herein, provided that (i) any partial conversion shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrowers and (ii) with respect to LIBOR Rate Loans,
there shall be no more than ten (10) separate Interest Periods in effect at any
one time.
(b) Any Loan of any Type may be continued as a Loan of the same Type
upon the expiration of an Interest Period with respect thereto by compliance by
the Borrowers with the notice provisions contained in ss.2.7(a); provided that
no LIBOR Rate Loan may be continued as such when any Default or Event of Default
has occurred and is continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto ending
during the continuance of any Default or Event of Default of which officers of
the Administrative Agent active upon the Borrowers' account have actual
knowledge. The Administrative Agent shall notify the Lenders promptly when any
such automatic conversion contemplated by this ss.2.7 is scheduled to occur.
(c) Any conversion to or from LIBOR Rate Loans shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of all LIBOR Rate Loans having the same
Interest Period shall not be less than $3,000,000 or a whole multiple of
$1,000,000 in excess thereof.
ss.2.8. Funds for Loans.
(a) Not later than 2:00 p.m. (Boston, Massachusetts time) on the
proposed Drawdown Date of any Loan, each of the Lenders will make available to
the
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Administrative Agent, at the Administrative Agent's Head Office, in immediately
available funds, the amount of such Lender's Commitment Percentage of the amount
of the requested Loans. Upon receipt from each Lender of such amount, and upon
receipt of the documents required by (i) ss.ss.11 and 12 in the case of initial
Loans, and (ii) ss.12 for all other Loans, and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Administrative Agent
will make available to the Borrowers the aggregate amount of such Loans made
available to the Administrative Agent by the Lenders. The failure or refusal of
any Lender to make available to the Administrative Agent at the aforesaid time
and place on any Drawdown Date the amount of such Lender's Commitment Percentage
of the requested Loans shall not relieve any other Lender from its several
obligation hereunder to make available to the Administrative Agent the amount of
such other Lender's Commitment Percentage of any requested Loans.
(b) The Administrative Agent may, unless notified to the contrary by
any Lender prior to a Drawdown Date, assume that such Lender has made available
to the Administrative Agent on such Drawdown Date the amount of such Lender's
Commitment Percentage of the Loans to be made on such Drawdown Date, and the
Administrative Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the Borrowers a corresponding amount. If any
Lender makes available to the Administrative Agent such amount on a date after
such Drawdown Date, such Lender shall pay to the Administrative Agent on demand
an amount equal to the product of (i) the average, computed for the period
referred to in clause (iii) below, of the weighted average interest rate paid by
the Administrative Agent for federal funds acquired by the Administrative Agent
during each day included in such period, times (ii) the amount of such Lender's
Commitment Percentage of such Loans, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such Drawdown Date to
the date on which the amount of such Lender's Commitment Percentage of such
Loans shall become immediately available to the Administrative Agent, and the
denominator of which is 365. A statement of the Administrative Agent submitted
to such Lender with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Administrative Agent by
such Lender. If the amount of such Lender's Commitment Percentage of such Loans
is not made available to the Administrative Agent by such Lender within three
(3) Business Days following such Drawdown Date, the Administrative Agent shall
be entitled to recover such amount from the Borrowers on demand, with interest
thereon at the rate per annum applicable to the Loans made on such Drawdown
Date.
ss.2.9. Change in Borrowing Base. The Borrowing Base shall be
determined weekly (or at such other interval as may be specified pursuant to
ss.8.4(f)) by the Administrative Agent by reference to the Borrowing Base Report
delivered to the Lenders and the Administrative Agent pursuant to ss.8.4(f).
ss.2.10. Settlement; Application of Repayments of Revolving Credit
Loans. (a) BankBoston may, but is not required to, fund all Base Rate Loans made
in accordance with the provisions of this Credit Agreement. Prior to each
Settlement, (i) all payments of the principal of the Base Rate Loans shall be
credited to the account of BankBoston, and (ii) the outstanding amount of Base
Rate Loans made by BankBoston
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may exceed BankBoston's Commitment Percentage of the outstanding amount of
Base Rate Loans.
(b) The Lenders shall effect Settlements (i) on each Monday and
Thursday of each week (or the next immediately succeeding Business Day if such
day is not a Business Day), (ii) within one Business Day after each other date
on which borrowings of Base Rate Loans (net of payments of principal of Base
Rate Loans by the Borrowers) or payments of principal of Base Rate Loans (net of
borrowings of Base Rate Loans by the Borrowers) exceed $5,000,000 and (iii) on
the Maturity Date or any other date that all of the Obligations become due and
payable hereunder (whether by acceleration or otherwise) (each such date, a
"Settlement Date"). By 11:00 a.m. (Boston, Massachusetts time) of each such
Settlement Date, the Administrative Agent shall give telephonic notice to the
Lenders of (A) the respective outstanding amount of Base Rate Loans made by each
Lender as at the close of business on the prior day, (B) the amount that any
Lender, as applicable (the "Settling Lender"), shall pay to effect a Settlement
(the "Settlement Amount") and (C) the portion (if any) of the aggregate
Settlement Amount to be paid to each Lender. A statement of the Administrative
Agent submitted to the Lenders with respect to any amounts owing hereunder shall
be prima facie evidence of the amount due and owing. Each Settling Lender shall,
not later than 4:00 p.m. (Boston, Massachusetts time) on each Settlement Date,
effect a wire transfer of immediately available funds to the Administrative
Agent at its head office in the amount of such Lender's Settlement Amount. The
Administrative Agent shall, as promptly as practicable during normal business
hours on each Settlement Date, effect a wire transfer of immediately available
funds to each Lender of the Settlement Amount to be paid to such Lender. All
funds advanced by any Lender as a Settling Lender pursuant to this ss.2.10(b)
shall for all purposes be treated as a Base Rate Loan made by such Settling
Lender to the Borrowers and all funds received by any Lender pursuant to this
ss.2.10(b) shall for all purposes be treated as repayment of amounts owed by the
Borrowers with respect to Base Rate Loans made by such Lender.
(c) The Administrative Agent may (unless notified to the contrary by
a Settling Lender by 2:00 p.m. (Boston, Massachusetts time) on the Settlement
Date) assume that each Settling Lender has made available to the Administrative
Agent on such Settlement Date the Settlement Amount, and the Administrative
Agent may (but shall not be required to), in reliance upon such assumption, make
available to each applicable Lender its share (if any) of the aggregate
Settlement Amount. If the Settlement Amount of such Settling Lender is made
available to the Administrative Agent by such Settling Lender (or, conversely,
if the Administrative Agent makes the Settlement Amount available to a Lender
entitled thereto) on a date after such Settlement Date, such Settling Lender
shall pay the Administrative Agent (or, conversely, the Administrative Agent
shall pay such Lender entitled to such Settlement Amount) on demand an amount
equal to the product of (i) the average computed for the period referred to in
clause (iii) below, of the weighted average annual interest rate paid by the
Administrative Agent or such Lender, as applicable, for federal funds acquired
by the Administrative Agent or such Lender, as applicable during each day
included in such period times (ii) the Settlement Amount, times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including such Settlement Date to but not including the date on which the
Settlement Amount shall become immediately available to the Administrative Agent
or such Lender, as
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applicable, and the denominator of which is 360. Upon payment of such amount,
the Settling Lender shall be deemed to have delivered the Settlement Amount of
such Settling Lender on the Settlement Date and shall become entitled to
interest payable by the Borrowers with respect to such Lender's Settlement
Amount as if such share were delivered on the Settlement Date. If the Settlement
Amount is not in fact made available to the Administrative Agent by the Settling
Lender within three (3) Business Days of such Settlement Date, the
Administrative Agent shall be entitled to debit the Borrowers' account with the
Administrative Agent to recover such amount from the Borrowers and if the
Borrowers' account with the Administrative Agent does not contain sufficient
funds the Borrowers agree to deposit into the account such amount, with interest
thereon at the rate per annum applicable to any Base Rate Loans made on such
Settlement Date. The failure or refusal of any of the Lenders to make available
to the Administrative Agent at the aforesaid time on any Settlement Date the
amount of the Settlement Amount representing Base Rate Loans to be made by such
Lender on such date shall not relieve any other Lender from its obligations
hereunder to make Settlements and Base Rate Loans on such Settlement Date or on
any subsequent Settlement Date but in no event shall any Lender or the
Administrative Agent be responsible or liable for the failure of any other
Lender to make the Base Rate Loans to be made by such other Lender.
(d) Each payment by the Borrowers of Base Rate Loans hereunder shall
be allocated among the Lenders on the first Settlement Date after such payment,
in amounts determined to provide that after such application the outstanding
amount of Base Rate Loans of each Lender equals, as nearly as practicable, such
Lender's Commitment Percentage of all outstanding Base Rate Loans.
ss.2.11. Operating Accounts. The Borrowers and their Subsidiaries
shall maintain their primary operating accounts with the Agents.
ss.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
ss.3.1. Maturity. The Borrowers absolutely and unconditionally and
jointly and severally promise to pay on the Maturity Date, and there shall
become absolutely due and payable on the Maturity Date, all of the Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon and all fees and reasonable expenses incurred by the Lenders and
Administrative Agent in connection therewith and payable by the Borrowers
hereunder.
ss.3.2. Mandatory Repayments of Loans.
(a) If at any time, the Total Exposure exceeds the Maximum Available
Amount, then the Borrowers shall immediately pay the amount of such excess to
the Administrative Agent for the respective accounts of the Lenders for
application: first, to any Unpaid Reimbursement Obligations; second, to the
Loans; and third, to provide to the Administrative Agent cash collateral for
Reimbursement Obligations as contemplated by ss.ss.4.3(b) and (c). Each payment
of any Unpaid Reimbursement Obligations or prepayment of Loans shall be
allocated among the Lenders, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Lender's Note, with
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adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
(b) Notwithstanding any term contained herein to the contrary, if any
Person (other than Xxxxx Xxxxxxxxx) or if any two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended from time to time, and any successor statute), directly
or indirectly, capital stock of Starter (or other securities convertible into
capital stock) representing combined voting power of all capital stock of
Starter entitled to vote in the election of directors (other than capital stock
having such power only by reason of the happening of a contingency) which is
greater than that owned by Xxxxx Xxxxxxxxx, then (1) not later than thirty (30)
days after the occurrence of such event, the Borrowers shall pay to the
Administrative Agent (x) all principal, interest, fees and other amounts due in
respect of the Loans, plus (y) an amount equal to the sum of the Maximum Drawing
Amount plus all Unpaid Reimbursement Obligations to be held by the
Administrative Agent as cash collateral as contemplated by ss.4.3(c), plus (z)
all other amounts then due under this Credit Agreement and the other Loan
Documents, and (2) the Total Commitment hereunder shall forthwith terminate and
each of the Lenders shall be relieved of all further obligations to make Loans
to the Borrowers and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit.
ss.3.3. Optional Repayments of Loans. The Borrowers shall have the
right, at their election, to repay the outstanding amount of the Loans, as a
whole or in part, at any time, subject to the premium set forth below, provided
that any full or partial prepayment of the outstanding amount of any LIBOR Rate
Loans pursuant to this ss.3.3 may be made only on the last day of the Interest
Period relating thereto unless, contemporaneously with such prepayment, the
Borrowers shall have paid to the Administrative Agent all amounts due under
ss.5.9 hereof. The Borrowers shall give the Administrative Agent, no later than
10:00 a.m., Boston time, not less than one (1) and not more than five (5)
Business Days' prior written notice of any proposed prepayment pursuant to this
ss.3.3 of Base Rate Loans, and not less than three (3) and not more than five
(5) LIBOR Business Days' notice of any proposed prepayment pursuant to this
ss.3.3 of LIBOR Rate Loans, in each case specifying the proposed date of
prepayment of Loans and the principal amount to be prepaid. Each such partial
prepayment of the Loans shall be in an integral multiple of $1,000,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrowers, first to the principal of Base Rate Loans and then to the principal
of LIBOR Rate Loans. Each partial prepayment shall be allocated among the
Lenders, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Lender's Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion. If the
Borrowers terminate the Total Commitment, whether in one transaction or a series
of transactions, the Borrowers shall pay a premium with respect to such
termination in an amount determined in accordance with the percentages set forth
in the following table opposite the period during which the termination occurs:
Period Terminated Amount Due
----------------- ----------
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Effective Date through 1% of the Total Commitment (as in effect on
first anniversary thereof the Effective Date)
First anniversary of Effective
Date through Maturity Date 0% of the Total Commitment
provided, that so long as no Event of Default is then continuing or would result
therefrom, the premium set forth in the table above shall not be due and payable
if the Total Commitment is terminated and the outstanding principal amount of
the Obligations are paid with the proceeds of any of the following: (i) the sale
of more than 25% of the issued and outstanding stock of Starter to a Person that
is not an Affiliate of Starter or Xxxxx Xxxxxxxxx prior to such sale, or (ii) a
merger or consolidation of Starter with a Person that is not an Affiliate of
Starter or Xxxxx Xxxxxxxxx prior to such merger or consolidation, or (iii) an
Asset Sale consisting of the sale of all or substantially all of the assets of
Starter to a Person that is not an Affiliate of Starter or Xxxxx Xxxxxxxxx; and
provided further that the premium set forth in the table above shall not be due
and payable if the Total Commitment is terminated and the outstanding principal
amount of the Obligations are paid with the proceeds of financing pursuant to
which BankBoston, N.A. is the administrative agent and the interests of the
financial institutions participating in such financing hold more than 50% of the
then current Total Commitment at the time of such termination.
ss.4. LETTERS OF CREDIT.
ss.4.1. Letter of Credit Facility.
(a) Subject to the terms and conditions hereof and the execution and
delivery by one or more of the Borrowers of a Letter of Credit Application on
the Administrative Agent's customary form (a "Letter of Credit Application"),
the Administrative Agent (or its affiliates) on behalf of the Lenders and in
reliance upon the agreement of the Lenders set forth in ss.4.1(d) and upon the
representations and warranties of the Borrowers contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of such Borrower
one or more standby or documentary letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the Borrowers
and agreed to by the Administrative Agent; provided, however, that (i) no Letter
of Credit shall be issued, renewed or extended later than ten (10) Business Days
prior to the Maturity Date, (ii) no documentary Letter of Credit shall have a
term longer than one hundred twenty (120) days, (iii) no Letter of Credit shall
be issued, renewed or extended in a face amount of less than $50,000, (iv) no
standby Letter of Credit shall be issued, renewed or extended without the
consent of each of the Lenders, and (v) no Letter of Credit shall have a stated
expiration after the Maturity Date, provided further, that, on the tenth (10th)
day prior to the Maturity Date, each Letter of Credit then outstanding shall be
either (x) cash collateralized in an amount equal to 105% of the Maximum Drawing
Amount under such Letter of Credit or (y) secured by a "back-to-back" letter of
credit issued by a bank satisfactory to the Administrative Agent (in its sole
and absolute discretion), in an amount equal to 105% of the Maximum Drawing
Amount under such Letter of Credit (it being understood that from time to time
such cash collateral will be released,
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and such back-to-back letters of credit may be reduced, to the extent that the
Maximum Drawing Amount under such Letters of Credit is reduced), and provided
further, that, after giving effect to such request, the Total Exposure shall not
exceed the Maximum Available Amount.
(b) Each Letter of Credit Application shall be completed to the
satisfaction of the Administrative Agent. In the event that any provision of any
Letter of Credit Application shall be inconsistent with any provision of this
Credit Agreement, then the provisions of this Credit Agreement shall, to the
extent of any such inconsistency, govern.
(c) Each Letter of Credit issued, extended or renewed hereunder
shall, among other things, provide for the payment of sight drafts, for honor
thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein. Each Letter of Credit
Application and each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of Connecticut.
(d) Each Lender severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to reimburse the Administrative Agent on demand
for such Lender's Commitment Percentage of each draft paid by the Administrative
Agent under each Letter of Credit (the extension of credit represented by each
Lender's obligations hereunder in respect of Letters of Credit being referred to
herein as such Lender's "Letter of Credit Participation").
(e) Each such payment made by a Lender shall entitle such Lender to
a portion of the Borrowers' Unpaid Reimbursement Obligation in an amount equal
to such payment. Each Lender shall share in accordance with its participating
interest in any interest which accrues pursuant to ss.4.3 and in any subsequent
payments of such Unpaid Reimbursement Obligations.
(f) Any Letter of Credit to be issued hereunder may, at the request
of the Administrative Agent, and with the consent of any Lender, be issued by
such Lender pursuant to the provisions of this ss.4. In each such case, to the
extent applicable, references to the Administrative Agent in this ss.4 and any
other such reference relating to Letters of Credit shall, with respect to such
Letter of Credit, be deemed to be references to such issuing Lender.
ss.4.2. [INTENTIONALLY OMITTED].
ss.4.3. Reimbursement Obligation of the Borrowers. In order to
induce the Administrative Agent to issue, extend and renew each Letter of Credit
and the Lenders to participate therein, the Borrowers hereby jointly and
severally agree to reimburse or pay to the Administrative Agent, for the account
of the Administrative Agent or (as the case may be) the Lenders, with respect to
each Letter of Credit issued, extended or renewed by the Administrative Agent
hereunder,
(a) except as otherwise expressly provided in ss.4.3(b) and (c), on
each date that any draft presented under any Letter of Credit is honored by the
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Administrative Agent, or the Administrative Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Administrative Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Administrative
Agent or any Lender in connection with any payment made by the Administrative
Agent or any Lender under, or with respect to, such Letter of Credit.
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the sum of the Maximum Drawing Amount plus all Unpaid
Reimbursement Obligations, an amount equal to such difference, which amount
shall be held by the Administrative Agent for the benefit of the Lenders and the
Administrative Agent as cash collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters of
Credit in accordance with ss.13, an amount equal to the then Maximum Drawing
Amount, which amount shall be held by the Administrative Agent for the benefit
of the Lenders and the Administrative Agent as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Head Office in immediately available funds. Interest on
any and all amounts remaining unpaid by the Borrowers under this ss.4.3 at any
time from the date such amounts become due and payable (whether as stated in
this ss.4.3, by acceleration or otherwise) until payment in full (whether before
or after judgment) shall be payable to the Administrative Agent on demand at the
rate specified in ss.5.10 for overdue principal on the Loans.
ss.4.4. Letter of Credit Payments. If any draft shall be presented
or other demand for payment shall be made under any Letter of Credit, the
Administrative Agent shall notify the Borrowers of the date and amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. Subject to the provisions of
ss.4.3(a), if the Borrowers fail to reimburse the Administrative Agent as
provided in ss.4.3 by the date that such draft is honored or paid or other
payment is made by the Administrative Agent, the Administrative Agent may at any
time thereafter notify the Lenders of the amount of any such Unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Boston, Massachusetts time)
on the Business Day next following the receipt of such notice, each Lender shall
make available to the Administrative Agent, at the Administrative Agent's Head
Office, in immediately available funds, such Lender's Commitment Percentage of
such Unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day included
in such period, times (b) the amount equal to such Lender's Commitment
Percentage of such Unpaid Reimbursement Obligation, times (c) a fraction, the
numerator of which is the number of days that elapse from and including the date
the Administrative Agent paid the draft presented for honor or otherwise made
payment to the date on which such Lender's Commitment Percentage of such Unpaid
Reimbursement Obligation shall become immediately available to the
Administrative Agent, and the denominator
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of which is 360. The responsibility of the Administrative Agent to the Borrowers
and the Lenders shall be only to determine that the documents (including each
draft) delivered under each Letter of Credit in connection with such presentment
or other demand for payment shall be in conformity in all respects with such
Letter of Credit, except for minor errors not affecting the plain meaning of the
documents presented and not susceptible to any claim by the Borrowers that the
presentation was nonconforming.
ss.4.5. Obligations Absolute. The Borrowers' joint and several
obligations under this ss.4 shall be absolute and unconditional under any and
all circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which either Borrower may have or have had against the
Administrative Agent, any Lender or any beneficiary of a Letter of Credit. The
Borrowers further agree with the Administrative Agent and the Lenders that the
Administrative Agent and the Lenders shall not be responsible for, and the
Borrowers' Reimbursement Obligations under ss.4.3 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
either Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of either Borrower against the beneficiary of
any Letter of Credit or any such transferee. The Administrative Agent and the
Lenders shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit except for any such error,
omission, interruption or delay resulting solely from gross negligence or
willful misconduct of the Administrative Agent or the Lenders. Each Borrower
agrees that any action taken or omitted by the Administrative Agent or any
Lender under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon such Borrower and
shall not result in any liability on the part of the Administrative Agent or any
Lender to such Borrower.
ss.4.6. Reliance by Issuer. To the extent not inconsistent with
ss.4.5, the Administrative Agent or any other issuing Lender having the rights
of the Administrative Agent pursuant to ss.4.1(f) hereof shall be entitled to
rely, and shall be fully protected in relying upon, any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document 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, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Lenders as
it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement in accordance
with a request of the Majority
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Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and all future holders of the
Revolving Credit Notes or of a Letter of Credit Participation.
ss.4.7. Letter of Credit Fees. The Borrowers shall pay fees (in each
case, a "Letter of Credit Fee") to the Administrative Agent as follows:
(i) in respect of each standby Letter of Credit (including Existing
Letters of Credit that are standby letters of credit), at a rate per annum
on the face amount of such standby Letter of Credit equal to the
Applicable Margin then in effect for LIBOR Loans minus one-quarter of one
percent (0.25%), which amount shall be paid monthly in arrears on the
first day of each calendar month for the immediately preceding calendar
month (or portion thereof) to the Administrative Agent for the accounts of
the Lenders in accordance with their respective Commitment Percentages;
and
(ii) in respect of each documentary Letter of Credit (including
Existing Letters of Credit that are documentary letters of credit), an
amount equal to the greater of (x) one and three-quarters of one percent
(1.75%) per annum on the face amount of such documentary Letter of Credit
or (y) the minimum charge for similar documentary letters of credit as set
by the Administrative Agent from time to time, which amount shall be paid
monthly in arrears on the first day of each calendar month for the
immediately preceding calendar month (or portion thereof) to the
Administrative Agent for the accounts of the Lenders in accordance with
their respective Commitment Percentages; and
(iii) in respect of each Letter of Credit (including Existing
Letters of Credit), a fronting fee equal to one quarter of one percent
(0.25%) per annum on the face amount of such Letter of Credit, which
amount shall be paid monthly in arrears on the first day of each calendar
month for the immediately preceding calendar month (or portion thereof) to
the Administrative Agent for the Administrative Agent's own account.
In respect of each Letter of Credit, the Borrower shall also pay to the
Administrative Agent for the Administrative Agent's own account, at such other
time or times as such charges are customarily made by the Administrative Agent,
the Administrative Agent's customary issuance, amendment, negotiation or
document examination and other administrative fees as in effect from time to
time.
ss.4.8. Existing Letters of Credit. The Borrowers and the Lenders
agree that the letters of credit described on Schedule 4.8 hereto (the "Existing
Letters of Credit"), which Existing Letters of Credit have previously been
issued by BankBoston or its affiliates for the account of the Borrowers, shall
be deemed Letters of Credit issued under and governed by this Credit Agreement,
that this Credit Agreement supersedes any and all prior agreements between the
Borrowers and BankBoston with respect to the Existing Letters of Credit, and
that all the Existing Letters of Credit shall be subject to and governed by the
terms of this Credit Agreement, including without limitation ss.4.7.
ss.5. CERTAIN GENERAL PROVISIONS.
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ss.5.1. Certain Fees. The Borrowers shall pay to the Administrative
Agent and the Arranger the fees set forth in the Fee Letter.
ss.5.2. Funds for Payments.
(a) All payments of principal, interest, Reimbursement Obligations,
facility fees, Letter of Credit Fees and any other amounts due hereunder or
under any of the other Loan Documents shall be made to the Administrative Agent,
for the respective accounts of the Lenders and the Administrative Agent, as
applicable, at the Administrative Agent's Head Office or at such other location
in the Boston, Massachusetts area that the Administrative Agent may from time to
time designate, in each case in immediately available funds.
(b) All payments by the Borrowers hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties, charges,
fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless the
Borrowers are compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrowers with respect to any amount payable
by it hereunder or under any of the other Loan Documents, the Borrowers will pay
to the Administrative Agent, for the account of the Lenders or (as the case may
be) the Administrative Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Lenders or the Administrative Agent
to receive the same net amount which the Lenders or the Administrative Agent
would have received on such due date had no such obligation been imposed upon
the Borrowers. The Borrowers will deliver promptly to the Administrative Agent
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by the Borrowers hereunder or under
such other Loan Document.
ss.5.3. Computations. All computations of interest on the Loans and
of facility fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Note Records from time to
time shall be considered correct and binding on each Borrower unless within five
(5) Business Days after receipt of any notice by the Administrative Agent or any
of the Lenders of such outstanding amount, the Administrative Agent or such
Lender shall notify the Borrowers to the contrary.
ss.5.4. Inability to Determine LIBOR Rate. In the event, prior to
the commencement of any Interest Period relating to any LIBOR Rate Loan, the
Administrative Agent shall determine or be notified by the Majority Lenders that
adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
that
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would otherwise determine the rate of interest to be applicable to any LIBOR
Rate Loan during any Interest Period, the Administrative Agent shall forthwith
give notice of such determination (which shall be conclusive and binding on the
Borrowers and the Lenders) to the Borrowers and the Lenders. In such event (a)
any Loan Request or Conversion Request with respect to LIBOR Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans, (b)
each LIBOR Rate Loan will automatically, on the last day of the then current
Interest Period relating thereto, become a Base Rate Loan, and (c) the
obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the
Administrative Agent or the Majority Lenders determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Administrative
Agent shall so notify the Borrowers and the Lenders.
ss.5.5. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of
such circumstances to the Borrowers and the other Lenders and thereupon (a) the
commitment of such Lender to make LIBOR Rate Loans or convert Loans of another
Type to LIBOR Rate Loans shall forthwith be suspended and (b) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such LIBOR Rate Loans or within such earlier period as may be
required by law. The Borrowers hereby agree promptly to pay the Administrative
Agent for the account of such Lender, upon demand by such Lender, any additional
amounts necessary to compensate such Lender for any costs incurred by such
Lender in making any conversion in accordance with this ss.5.5, including any
interest or fees payable by such Lender to lenders of funds obtained by it in
order to make or maintain its LIBOR Loans hereunder.
ss.5.6. Additional Costs, Etc. If any future applicable law or any
change in any present law, which expression, as used herein, includes statutes,
rules and regulations thereunder and interpretations thereof by any competent
court or by any governmental or other regulatory body or official charged with
the administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Lender or the Administrative Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of Credit, such
Lender's Commitment or the Loans (other than taxes based upon or measured by the
income or profits of such Lender or the Administrative Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to any Lender or the
Administrative Agent under this Credit Agreement or any of the other Loan
Documents, or
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(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Lender, or
(d) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Lender's Commitment, or any
class of loans, letters of credit or commitments of which any of the Loans or
such Lender's Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Lender's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Lender or the
Administrative Agent hereunder on account of such Lender's Commitment, any
Letter of Credit or any of the Loans, or
(iii) to require such Lender or the Administrative Agent to
make any payment or to forego any interest or Reimbursement Obligation or
other sum payable hereunder, the amount of which payment or foregone
interest or Reimbursement Obligation or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received by
such Lender or the Administrative Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or foregone interest or Reimbursement Obligation or other sum.
ss.5.7. Capital Adequacy. If any present or future law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or the interpretation thereof by a court or governmental authority
with appropriate jurisdiction affects the amount of capital required or expected
to be maintained by any Lender or the Administrative Agent or any corporation
controlling such Lender or the Administrative Agent and such Lender or the
Administrative Agent determines that the amount of capital required to be
maintained by it is increased by or based upon the existence of such Lender's or
the Administrative Agent's commitment with respect to any Loans, Letter of
Credit Participations or Letters of Credit, then such Lender or the
Administrative Agent may notify the Borrowers of such fact. To the extent that
the costs of such increased capital requirements are not reflected in the Base
Rate (if relating to Loans or Unpaid Reimbursement Obligations), the Borrowers
and such Lender or (as the case may be) the Administrative Agent shall
thereafter negotiate in good faith, within thirty (30) days of the day on which
the Borrowers receive such
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notice, an adjustment payable hereunder that will adequately compensate such
Lender or the Administrative Agent in light of these circumstances. If the
Borrowers and such Lender or the Administrative Agent are unable to agree to
such adjustment within thirty (30) days of the date on which the Borrowers
receive such notice, then commencing on the date of such notice (but not earlier
than the effective date of any such increased capital requirement), the fees
payable hereunder shall increase by an amount that will, in such Lender's or the
Administrative Agent's reasonable determination, provide adequate compensation.
Each Lender and the Administrative Agent shall allocate such cost increases
among its customers in good faith and on an equitable basis.
ss.5.8. Certificate. A certificate setting forth any additional
amounts payable pursuant to ss.ss.5.6 or 5.7 and a brief explanation of such
amounts which are due, submitted by any Lender or the Administrative Agent to
the Borrowers, shall be conclusive, absent manifest error, that such amounts are
due and owing.
ss.5.9. Indemnity. Each Borrower agrees to indemnify each Lender and
to hold each Lender harmless from and against any loss, cost or expense
(including loss of anticipated profits) that such Lender may sustain or incur as
a consequence of (a) default by the Borrowers in payment of the principal amount
of or any interest on any LIBOR Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate
Loans, (b) default by the Borrowers in making a borrowing or conversion after
the Borrowers have given (or is deemed to have given) a Loan Request, notice or
a Conversion Request relating thereto in accordance with ss.2.6 or ss.2.7 or (c)
the making of any payment of a LIBOR Rate Loan or the making of any conversion
of any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
any such Loans.
ss.5.10. Interest After Default.
(a) Overdue principal and (to the extent permitted by applicable
law) interest on the Loans and all other overdue amounts payable hereunder or
under any of the other Loan Documents shall bear interest compounded monthly and
payable on demand at a rate per annum equal to three percent (3%) above the Base
Rate from time to time in effect plus the Applicable Margin in respect of Base
Rate Loans until such amount shall be paid in full (after as well as before
judgment).
(b) During the continuance of any Event of Default arising as a
result of the failure by the Borrowers to pay any principal or interest due and
payable hereunder, the principal of the Loans not overdue shall, until such
Event of Default has been cured or remedied or such Event of Default has been
waived by the Majority Lenders pursuant to ss.26, bear interest at a rate per
annum equal to the rate of interest applicable to overdue principal pursuant to
ss.5.10(a) hereof.
ss.5.11. Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
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Administrative Agent and the Lenders under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each of the Borrowers to accept joint and several
liability for the obligations of each of them.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with each other Borrower, with respect to the
payment and performance of all of the Obligations, it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of all of the Borrowers without preferences or distinction among
them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of such Obligations in accordance with the terms thereof, then in
each such event each other Borrower will make such payment with respect to, or
perform, such Obligation.
(d) The obligations of each Borrower under the provisions of this
ss.5.11 constitute the absolute and unconditional obligations of such Borrower
enforceable against it to the full extent permitted under the terms hereof,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstance whatsoever.
(e) Each Borrower hereby waives notice of acceptance of its joint
and several liability, notice of the Loans made under this Credit Agreement,
notice of the occurrence of any Default or Event of Default, or of any demand
for any payment under this Credit Agreement, notice of any action at any time
taken or omitted by the Administrative Agent or the Lenders under or in respect
of any of the Obligations, any requirement of diligence or to mitigate damages
and, generally, all demands, notices and other formalities of every kind in
connection with this Credit Agreement. Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Administrative Agent or
the Lenders at any time or times in respect of any default by either Borrower in
the performance or satisfaction of any term, covenant, condition or provision of
this Credit Agreement, any and all other indulgences whatsoever by the
Administrative Agent or the Lenders in respect of any of the obligations
hereunder, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of such obligations or the
addition, substitution or release, in whole or in part, of either Borrower.
Without limiting the generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the part of the
Administrative Agent or the Lenders including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this ss.5.11, afford grounds for terminating, discharging or
relieving such Borrower, in whole or in part, from any of its Obligations under
this ss.5.11, it being the intention of each Borrower that, so long as any of
the Obligations remain unsatisfied, the Obligations of such Borrower under this
ss.5.11 shall not be discharged except by performance and then only to the
extent of such performance. The joint and several liability of the
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Borrowers hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of either Borrower or the
Administrative Agent or the Lenders. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by the Administrative Agent or the Lenders
upon the insolvency, bankruptcy or reorganization of any of the Borrowers, or
otherwise, the provisions of this ss.5.11 will forthwith be reinstated in
effect, as though such payment had not been made.
ss.5.12. Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
applicable law and, in the event any such payment is inadvertently made by the
Borrowers or inadvertently received by the Administrative Agent or any Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrowers shall notify the Administrative Agent or such Lender in writing that
it elects to have such excess returned forthwith. It is the express intent
hereof that the Borrowers not pay and none of the Administrative Agent or the
Lenders receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrowers under applicable law.
(b) Notwithstanding the use by the Lenders of the Base Rate and the
LIBOR Rate as reference rates for the determination of interest on the Loans,
the Lenders shall be under no obligation to obtain funds from any particular
source in order to charge interest to the Borrowers at interest rates related to
such reference rates.
ss.6. COLLATERAL SECURITY. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrowers and their
respective Subsidiaries and certain assets of Xxxxx Xxxxxxxxx including, without
limitation, the assignment of the Life Insurance Policy, the pledge of 51% of
the issued and outstanding capital stock of Starter Europe and 26% of the issued
and outstanding capital stock of Far East pursuant to the terms of the Security
Documents to which the Borrowers are a party. In addition, the obligations of
Starter Europe under its Guaranty will be secured by a perfected first priority
security interest in 25% of all of the issued and outstanding capital stock of
Far East pursuant to the terms of the Security Documents to which Starter Europe
is a party; and 50% of the Maximum Amount will be secured by a perfected first
priority pledge of cash or adequately margined securities (as determined by the
Administrative Agent in its sole discretion, and expressly excluding shares of
stock of Starter) owned by Xxxxx Xxxxxxxxx.
ss.7. REPRESENTATIONS AND WARRANTIES. Each Borrower represents and
warrants to the Lenders, the Administrative Agent and the Syndication Agent as
follows:
ss.7.1. Corporate Authority; Ownership.
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(a) Incorporation; Good Standing. Each Borrower and its Subsidiaries
(i) is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where a failure to be so
qualified would have a materially adverse effect on the business, assets or
financial condition of such Borrower or its Subsidiary.
(b) Authorization. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which each Borrower or any of
its Subsidiaries is or is to become a party, and the performance by each such
Person of all of its agreements and obligations under each of such documents,
and the transactions contemplated hereby and thereby (i) are within the
corporate authority of each such Person, (ii) have been duly authorized by all
necessary corporate proceedings, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Borrower or any of its Subsidiaries is subject or any judgment,
order, writ, injunction, license or permit applicable to such Person, (iv) do
not conflict with any provision of the corporate charter or bylaws of, any
agreement or other instrument binding upon, or trust agreement of, such Person
and (v) do not require any approval, consent, order, authorization or license
by, or giving notice to, or taking any other action with respect to, any
governmental or regulatory authority or agency under any provision of any
applicable law.
(c) Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which each Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally binding
obligations of such Person enforceable against such Person in accordance with
the respective terms and provisions hereof and thereof, except as enforceability
is limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
ss.7.2. No Business Activity; Subsidiaries. Except as set forth on
Schedule 7.2, neither Borrower owns or holds of record and/or beneficially
(whether directly or indirectly) any shares of any class in the capital of any
other corporations or any legal and/or beneficial interests in any corporation,
partnership, limited liability company, business trust or joint venture or in
any other unincorporated trade or business enterprise.
ss.7.3. Governmental Approvals. The execution, delivery and
performance by each Borrower and its Subsidiaries of any of the Loan Documents
to which such Borrower or any of its Subsidiaries is or is to become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained. Each of the Borrowers holds all licenses, permits and
other certificates required for the operation of its business. Each of the
Borrowers is in compliance in all respects with all applicable state and Federal
filing and operating requirements, including all regulations governing equal
employment opportunity.
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ss.7.4. Title to Properties; Leases. Except as indicated on Schedule
7.4 hereto, each Borrower and its Subsidiaries own all of the assets reflected
in the balance sheets of the Borrowers and their Subsidiaries as at the Balance
Sheet Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
ss.7.5. Financial Statements.
(a) There has been furnished to each of the Lenders the Form 10K
filing of the Borrowers for the fiscal year ended December 31, 1997 (which
includes audited consolidated statements of income of the Borrowers and their
respective Subsidiaries for the fiscal year then ended). Such balance sheets and
statements of income of the Borrowers and their respective Subsidiaries shall
have been prepared in accordance with generally accepted accounting principles
and fairly present the financial condition of the Borrowers and their respective
Subsidiaries as at the close of business on the date thereof and the results of
operations for the fiscal year then ended. There are no contingent liabilities
of either Borrower or any of its Subsidiaries as of such date involving material
amounts, known to the officers of such Person, which were not disclosed in such
balance sheets and the notes related thereto.
(b) There has been furnished to each of the Lenders unaudited
consolidated balance sheets and consolidated and combined statements of income
of the Borrowers and their respective Subsidiaries, each as at the Balance Sheet
Date. Such balance sheets and statements of income of the Borrowers and their
respective Subsidiaries shall have been internally prepared and fairly present
the financial condition of the Borrowers and their respective Subsidiaries as at
the close of business on the date thereof. There are no contingent liabilities
of either Borrower or any of its Subsidiaries as of such date involving material
amounts known to the officers of such Person which were not disclosed in such
balance sheets of the Borrowers and their respective Subsidiaries.
ss.7.6. No Material Changes, Etc. Since the Balance Sheet Date there
has occurred no materially adverse change in the condition (financial or
otherwise) or business of either Borrower or any of its Subsidiaries as shown on
or reflected in the balance sheets of the Borrowers and their respective
Subsidiaries as at the Balance Sheet Date, or the statements of income for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any materially adverse effect either individually or in the
aggregate on the business, financial condition or results of operations of the
Borrowers or any of their respective Subsidiaries. Since the Balance Sheet Date,
neither Borrower has made any Distributions.
ss.7.7. Franchises, Patents, Copyrights, Etc. Each Borrower and each
of its Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
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ss.7.8. Litigation. Except as set forth on Schedule 7.8, there are
no actions, suits, proceedings or investigations of any kind pending or, to the
best knowledge of the Borrowers after due inquiry, threatened against either
Borrower or any of its Subsidiaries or before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, condition (financial or otherwise) or business of either Borrower or its
Subsidiaries or materially impair the right of such Borrower or any of its
Subsidiaries to carry on business substantially as now conducted by them, or
result in any substantial liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the balance sheet of such Borrower
and its Subsidiaries, or which question the validity of this Credit Agreement or
any of the other Loan Documents or any action taken or to be taken pursuant
hereto or thereto.
ss.7.9. No Materially Adverse Contracts, Etc. Neither Borrower or
any Subsidiary of such Borrower is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of any of such Persons. Neither Borrower
or any Subsidiary of such Borrower is a party to any contract or agreement that
has or is expected, in the judgment of such Borrower's officers, to have any
materially adverse effect on the business any of such Persons.
ss.7.10. Compliance with Other Instruments, Laws, Etc. Neither
Borrower or any Subsidiary of such Borrower is in violation of any provision of
their respective charter documents, bylaws, or any agreement or instrument to
which any of them may be subject or by which any of them or any of their
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of any of such Persons.
ss.7.11. Tax Status. Each Borrower and each of its Subsidiaries (a)
has made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) has paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) has
set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and to the best knowledge of
such Borrower after due and diligent inquiry, there is no basis for any such
claim. The Borrowing Base Report most recently delivered to the Administrative
Agent sets forth the amount of reserves established by each Borrower and each of
its respective Subsidiaries to cover such Borrower's or such Subsidiary's sales
or use tax obligations in each jurisdiction where such Borrower or such
Subsidiary is required to pay such taxes. Such reserves are adequate for the
payment of all of such obligations.
ss.7.12. No Event of Default. No Default or Event of Default has
occurred and is continuing.
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ss.7.13. Holding Company and Investment Company Acts. Neither
Borrower or any Subsidiary of such Borrower is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
ss.7.14. Absence of Financing Statements, Etc. Except with respect
to Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrowers or any of their respective
Subsidiaries or any rights relating thereto.
ss.7.15. Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Administrative Agent's security interest in the
Collateral. The Collateral and the Administrative Agent's rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrowers and their Subsidiaries are the owners of their
respective Collateral free from any lien, security interest, encumbrance and any
other claim or demand, except for Permitted Liens.
ss.7.16. Certain Transactions. Except as set forth on Schedule 7.16,
none of the officers, directors, or employees of the Borrowers or any of their
respective Subsidiaries is presently a party to any transaction with either
Borrower or any of its Subsidiaries (other than for services as employees,
officers and directors or for management services), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrowers, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
ss.7.17. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions. Each Borrower has
heretofore delivered to the Administrative Agent the most recently completed
annual report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
(b) Terminability of Welfare Plans. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, no benefits are due unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as required by
Title I, Part 6 of ERISA). The Borrowers or an ERISA Affiliate, as appropriate,
may terminate each such Plan at any
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time (or at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrowers or such ERISA Affiliate without
liability to any Person.
(c) Guaranteed Pension Plans. Each contribution required to be made
to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of ss.302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which have been paid) has been
incurred by either Borrower, or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable Event, or
any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months of the
date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not exceed
the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
(d) Multiemployer Plans. Neither Borrower nor any ERISA Affiliate
has incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under ss.4201 of ERISA or as a result of a sale of assets
described in ss.4204 of ERISA. Neither Borrower or any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or insolvent under and
within the meaning of ss.4241 or ss.4245 of ERISA or that any Multiemployer Plan
intends to terminate or has been terminated under ss.4041A of ERISA.
ss.7.18. Regulations U and X. The proceeds of the Loans shall be
used to refinance on the Effective Date all of the Indebtedness of the Borrowers
to the Administrative Agent and other lenders under the Existing Credit
Agreement, and for working capital and general corporate purposes. The Borrowers
will obtain Letters of Credit solely for general working capital and general
corporate purposes. No portion of any Loan is to be used, and no portion of any
Letter of Credit is to be obtained, for the purpose of purchasing or carrying
any "margin security" or "margin stock" as such terms are used in Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.
ss.7.19. Environmental Compliance. Each Borrower has taken all
reasonable steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such
investigation, has determined that:
(a) Neither Borrower or any Subsidiary of such Borrower, or any
operator of the Real Estate or any operations thereon, is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to
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environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the environment or the
business, assets or financial condition of such Borrower and any of its
Subsidiaries;
(b) Neither Borrower or any Subsidiary of such Borrower, has
received notice from any third party including, without limitation: any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii) that any
hazardous waste, as defined by 42 U.S.C. ss. 9601(5), any hazardous substances
as defined by 42 U.S.C. ss. 9601(14), any pollutant or contaminant as defined by
42 U.S.C. ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that such Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted by
the Borrowers, their Subsidiaries or operators of their respective properties,
no Hazardous Substances have been generated or are being used on the Real Estate
except in accordance with applicable Environmental Laws; (iii) there have been
no releases (i.e. any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon, into or from
the properties of the Borrowers or their Subsidiaries, which releases would have
a material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of the Borrowers' knowledge,
there have been no releases on, upon, from or into any of the Real Estate which,
through soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, the Real Estate and
there is no asbestos contamination on any of the Real Estate which would result
in a violation of applicable Environmental Laws or which would require removal
under such Environmental Laws; and (v) in addition, any Hazardous Substances
that have been generated on any of the Real Estate have been transported offsite
only by
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carriers having an identification number issued by the EPA, treated or disposed
of only by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) Neither Borrower or any Subsidiary of such Borrower or any of
the other Real Estate is subject to any applicable environmental law requiring
the performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby or to the effectiveness of any other transactions
contemplated hereby.
ss.7.20. Fiscal Year. Each fiscal year of each Borrower and each of
its Subsidiaries begins on January 1 of each calendar year and ends on December
31 of such calendar year.
ss.7.21. Other Representations. Each of the representations and
warranties made by each of the Borrowers or any other Person in any of the Loan
Documents to which any such Person is a party, was true and correct in all
material respects when made and continues to be true and correct in all material
respects on the Effective Date, except to the extent that any of such
representations and warranties may have been affected by the consummation of the
transactions contemplated and permitted or required by the Loan Documents.
ss.7.22. Bank Accounts. Schedule 7.22 sets forth the account numbers
and locations of all bank and deposit accounts of the Borrowers or any of the
Subsidiaries of the Borrowers.
ss.7.23. Solvency. As of the Effective Date and after giving effect
to the transactions contemplated by the Loan Documents, (i) the property of the
Borrowers and their Subsidiaries, at a fair valuation, will exceed their debts;
(ii) the capital of the Borrowers and their Subsidiaries will not be
unreasonably small to conduct their businesses; (iii) the Borrowers and their
Subsidiaries will not have incurred debts, or have intended to incur debts,
beyond their ability to pay such debts as they mature; and (iv) the present
fair, saleable value of the assets of the Borrowers and their Subsidiaries will
be materially greater than the amount that will be required to pay their
probable liabilities (including debts) as they become absolute and matured. For
purposes of this ss.7.23, "debt" means any liability on a claim, and "claim"
means (i) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
ss.7.24. Year 2000 Problem. The Borrowers and their Subsidiaries
have reviewed the areas within their businesses and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely
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basis, the "Year 2000 Problem" (i.e. the risk that computer applications used by
the Borrowers or any of their Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based upon such review, the Borrowers
reasonably believe that the "Year 2000 Problem" will not have any materially
adverse effect on the business or condition (financial or otherwise) of the
Borrowers or any of their Subsidiaries.
ss.7.25. Full Disclosure. There is no material fact or condition
relating to the Loan Documents or the condition (financial or otherwise),
business or property of either Borrower which could have a materially adverse
effect on the business or operations of such Borrower and which has not been
related, in writing, to the Lenders. All information heretofore furnished by
either Borrower to any Lender or the Administrative Agent in connection with the
Loan Documents was, and all such information hereafter furnished by either
Borrower to any Lender or Administrative Agent will be, true and accurate in all
material respects or based on reasonable estimates on the date as of which such
information is stated or certified.
ss.8. AFFIRMATIVE COVENANTS OF THE BORROWERS. Each Borrower covenants and
agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of
Credit or Note is outstanding or any Lender has any obligation to make any Loans
or the Administrative Agent has any obligation to issue, extend or renew any
Letter of Credit:
ss.8.1. Punctual Payment. The Borrowers will duly and punctually pay
or cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the facility fees, the Administrative Agent's and Arranger's fees,
the Letter of Credit Fees and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which either Borrower or any of its
Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
ss.8.2. Maintenance of Office. Each Borrower will maintain its chief
executive office at the address set forth in the preamble to this Credit
Agreement, or at such other place in the United States of America as such
Borrower shall designate upon written notice to the Administrative Agent, where
notices, presentations and demands to or upon such Borrower in respect of the
Loan Documents to which such Borrower is a party may be given or made.
ss.8.3. Records and Accounts. Each Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of its properties and the properties of
its Subsidiaries, contingencies, and other reserves.
ss.8.4. Financial Statements, Certificates and Information. Each
Borrower will deliver to each of the Lenders (other than with respect to
ss.8.4(g) hereof which shall be delivered to the Administrative Agent only):
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(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrowers, the consolidated
and the consolidating balance sheets of the Borrowers and their Subsidiaries, as
at the end of such year, and the related consolidated and consolidating
statements of income and statements of cash flow, for such year, each setting
forth in comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and audited without qualification (other than a
qualification regarding changes in generally accepted accounting principles) by
Ernst & Young LLP (with respect to the consolidated statements only) or by other
independent certified public accountants satisfactory to the Administrative
Agent, together with a written statement from such accountants to the effect
that they have read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall disclose
in such statement any such Default or Event of Default, together with any and
all management letters to the Borrowers from Borrowers' independent certified
public accountants during such fiscal year; provided that such accountants shall
not be liable to the Lenders for failure to obtain knowledge of any Default or
Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of the
Borrowers, copies of the unaudited consolidated and consolidating balance sheets
of the Borrowers and their Subsidiaries, as at the end of such quarter, and the
related consolidated and consolidating statements of income and consolidated
statements of cash flow for the portion of Borrowers' fiscal year then elapsed,
all in reasonable detail and prepared in accordance with generally accepted
accounting principles for interim statements, together with a certification by
the principal financial or accounting officer of each Borrower that the
information contained in such financial statements fairly presents the financial
position of the Borrowers and their Subsidiaries on the date thereof (subject to
year-end adjustments);
(c) as soon as practicable, but in any event not later than twenty
(20) days after the end of each calendar month, management prepared unaudited
consolidated and consolidating monthly financial statements of the Borrowers and
their Subsidiaries for such month;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the chief
financial officer, controller or senior vice-president-finance of each Borrower
in substantially the form of Exhibit B hereto and setting forth in reasonable
detail computations evidencing compliance with the covenants contained in ss.10
and (if applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission by either Borrower or sent to the stockholders of either Borrower,
including, without limitation any 10K or 10Q filing;
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(f) within three (3) Business Days after the end of each calendar
week, a Borrowing Base Report setting forth the Borrowing Base as at the end of
such calendar week, certified by the chief financial officer, president or
controller of each of the Borrowers;
(g) on or before 11:00 a.m. on each Business Day, a daily report in
form and detail satisfactory to the Administrative Agent setting forth the
following: (x) the Eligible Receivables of the Borrowers as at the end of the
immediately preceding Business Day, if at the end of such immediately preceding
Business Day the difference between (1) the Maximum Available Amount and (2) the
Total Exposure is less than $7,500,000; and (y) all Letters of Credit issued and
outstanding on the immediately preceding Business Day;
(h) within fifteen (15) days after the end of each calendar month,
an Accounts Receivable aging report, an inventory report, a charge-back aging
report and a backlog report, each in form and detail satisfactory to the
Administrative Agent;
(i) as soon as available, and in any event, within forty-five (45)
days after the end of each fiscal year of the Borrowers, projections for the
coming fiscal year on a month-by-month basis in such form as the Borrowers have
previously submitted to its bank lenders, detailing each item of income and
expenditure for such month, and on a cumulative year-to-date basis from the
commencement of such fiscal year, which projections shall include, without
limitation, balance sheets, projected Letter of Credit usage and any and all
anticipated Capital Expenditures; and
(j) from time to time such other financial data and information
(including accountants, management letters) as the Administrative Agent or any
Lender may reasonably request.
ss.8.5. Notices.
(a) Defaults. Each Borrower will promptly notify the Administrative
Agent and each of the Lenders in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other action
in respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture, lease, license agreement or other obligation to which
or with respect to which such Borrower or any of its Subsidiaries is a party or
Borrower, whether as principal, guarantor, surety or otherwise, such Borrower
shall forthwith give written notice thereof to the Administrative Agent and each
of the Lenders, describing the notice or action and the nature of the claimed
default.
(b) Environmental Events. Each Borrower will promptly give notice to
the Administrative Agent and each of the Lenders (i) of any violation of any
Environmental Law that such Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency and (ii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal,
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state or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or operations of
such Borrower or any of its Subsidiaries, or the Administrative Agent's
mortgages, deeds of trust or security interests pursuant to the Security
Documents.
(c) Notification of Claims against Collateral. Each Borrower will,
immediately upon becoming aware thereof, notify the Administrative Agent and
each of the Lenders in writing of any setoff, claims (including, with respect to
any Real Estate, environmental claims), withholdings or other defenses to which
any Collateral having a fair value, either, singularly or in the aggregate in
excess of $500,000 is subject, or the Administrative Agent's rights with respect
to any such Collateral, is subject.
(d) Notifications Re: Material Licensing Agreements. Each Borrower
will, immediately upon becoming aware thereof, notify the Administrative Agent
and each of the Lenders in writing of any event which constitutes a default by
any Person or any of its Subsidiaries under any Material Licensing Agreement and
will immediately forward to the Administrative Agent and each of the Lenders
copies of any communication received by such Person from any licensor claiming
any irregularity or default under any Material Licensing Agreement. In addition,
if either Borrower or any of its Subsidiaries enters into any amendment of any
Material Licensing Agreement in any material respect, the Borrowers shall
immediately provide the Administrative Agent with copies of such amendment.
(e) Notice of Litigation and Judgments. Each Borrower will, and will
cause each of its Subsidiaries to, give notice to the Administrative Agent and
each of the Lenders in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting such Borrower or any of its Subsidiaries or to which such
Borrower or any of its Subsidiaries is or becomes a party involving an uninsured
claim against such Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on such Borrower or any of its
Subsidiaries and stating the nature and status of such litigation or
proceedings. Each Borrower will, and will cause each of its Subsidiaries to,
give notice to the Administrative Agent and each of the Lenders, in writing, in
form and detail satisfactory to the Administrative Agent, within ten (10) days
of any judgment not covered by insurance, final or otherwise, against such
Borrower or any of its Subsidiaries in an amount in excess of $500,000.
(f) Notices Concerning Inventory Collateral. The Borrowers shall
provide to the Administrative Agent prompt notice of (i) any physical count of
either Borrower's or any of their respective Subsidiaries' inventory, together
with a copy of the results thereof certified by the applicable Borrower or such
Subsidiary, (ii) any determination by either Borrower or any of their respective
Subsidiaries that the inventory levels of such Borrower or such Subsidiary are
not adequate to meet the sales projections of such Borrower or such Subsidiary,
(iii) details of all credit card arrangements to which either Borrower or any of
their respective Subsidiaries is from time to time a party, and (iv) any failure
of either Borrower or any of their respective Subsidiaries to pay rent at any
location, which failure continues for more than three days following the day on
which such rent is due and payable by such Borrower or such
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Subsidiary. If so requested by the Administrative Agent or any Lender, the
Borrowers shall provide to the Administrative Agent or such Lender copies of all
advertising by either Borrower or any of their respective Subsidiaries including
copies of all print advertising and duplicate tapes of all video and radio
advertising.
ss.8.6. Corporate Existence; Maintenance of Properties. Each
Borrower will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and
those of its Subsidiaries. It (a) will cause all of its properties and those of
its Subsidiaries used or useful in the conduct of its business or the business
of its Subsidiaries to be maintained and kept in operating condition, repair and
working order and supplied with all necessary equipment, (b) will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of such Borrower may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, and (c) will, and will cause each of its Subsidiaries
to, continue to engage primarily in the businesses now conducted by them and in
related businesses.
ss.8.7. Insurance. Each Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent. Starter will pay all premiums when due on the Life
Insurance Policy and properly notify the Administrative Agent in writing of the
death of the individual covered by the Life Insurance Policy. In the event of
the death of such individual, regardless of whether an Event of Default shall
have occurred and be continuing, the Borrowers agree that the Administrative
Agent may, upon three Business Days prior written notice to the Borrowers, apply
the proceeds of the Life Insurance Policy as a mandatory prepayment of the
amounts payable hereunder and the other Loan Documents in such order of priority
as is contemplated in ss.13.4.
ss.8.8. Taxes. Each Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and provided further that such Borrower
and each Subsidiary of such Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
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ss.8.9. Inspection of Properties and Books, Etc.
(a) General. Upon five (5) Business Days' prior notice by the
Administrative Agent or any of the Lenders to the Borrowers, each Borrower shall
permit the Lenders, through the Administrative Agent or any of the Lenders'
other designated representatives, to visit and inspect any of the properties of
such Borrower or any of its Subsidiaries, to examine the books of account of
such Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of such Borrower
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all during normal business hours and at such reasonable intervals as
the Administrative Agent or any Lender may reasonably request. The
Administrative Agent may, at the Borrowers' expense, participate in or observe
any physical count of inventory included in the Collateral.
(b) Collateral Reports. No more than four times each calendar year
(unless an Event of Default shall have occurred and be continuing, then as and
when requested by the Administrative Agent), upon the request of the
Administrative Agent, the Borrowers will cooperate with the Administrative Agent
in connection with the preparation of a report of an independent collateral
auditor satisfactory to the Administrative Agent (which may be affiliated with
one of the Lenders) with respect to the Accounts Receivable and inventory
components included in the Borrowing Base, which report shall indicate whether
or not the information set forth in the Borrowing Base Report most recently
delivered is accurate and complete in all material respects based upon a review
by such auditors of the Accounts Receivable (including verification with respect
to the amount, aging, identity and credit of the respective account debtors and
the billing practices of the Borrowers and their applicable Subsidiaries) and
inventory (including verification as to the value, location and respective
types). No more than one time each calendar year (unless an Event of Default
shall have occurred and be continuing, then as and when requested by the
Administrative Agent), upon the request of the Administrative Agent, the
Borrowers will cooperate with the Administrative Agent in connection with the
preparation of a report of an independent collateral auditor satisfactory to the
Administrative Agent (which may be affiliated with one of the Lenders) with
respect to the trademark and related intellectual property components included
in the Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Report most recently delivered is
accurate and complete in all material respects based upon a review by such
auditors of the trademarks and related intellectual property collateral
(including verification as to the value and respective types). All such
collateral value reports shall be conducted and made at the expense of the
Borrowers.
(c) Environmental Assessments. At any time after an Event of Default
shall have occurred and is continuing, or, whether or not an Event of Default
shall have occurred and be continuing, at any time after the Administrative
Agent or any Lender shall receive notice of any Spill, Release or threatened
Release (each as defined under CERCLA) of Hazardous Substances from either
Borrower, or shall have received notice from any other source deemed reliable by
the Administrative Agent or such Lender that a Spill or Release of Hazardous
Substances may have occurred, the Administrative Agent may, from time to time,
in its discretion for the purpose of assessing and ensuring the value of any
Real Estate, obtain one or more environmental
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assessments or audits of such Real Estate prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert approved by the
Administrative Agent to evaluate or confirm (i) whether any Hazardous Materials
are present in the soil or water at such Real Estate and (ii) whether the use
and operation of such Real Estate complies with all Environmental Laws.
Environmental assessments may include without limitation detailed visual
inspections of such Real Estate including any and all storage areas, storage
tanks, drains, dry xxxxx and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Administrative Agent deems appropriate. The
Administrative Agent shall give the Borrower prior notice of such environmental
assessments and such environmental assessments shall be conducted and made at
the expense of the Borrowers.
(d) Communications with Accountants. Each Borrower authorizes the
Administrative Agent and, if accompanied by the Administrative Agent, the
Lenders to communicate directly with such Borrower's independent certified
public accountants and authorizes such accountants to disclose to the
Administrative Agent and the Lenders any and all financial statements and other
supporting financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other affairs of
such Borrower or any of its Subsidiaries. At the request of the Administrative
Agent, such Borrower shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this ss.8.9(d).
(e) Mystery Shopping. The Administrative Agent may from time to
time, at the Borrowers' expense, conduct "mystery shopping" visits to any or all
of either Borrower's or any of their respective Subsidiaries' business premises.
ss.8.10. Compliance with Laws, Contracts, Licenses, and Permits.
Each Borrower will, and will cause each of its Subsidiaries to, (a) comply in
all material respects with the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws, (b) comply with the
provisions of its charter documents and by-laws, (c) comply in all material
respects with all agreements and instruments by which it or any of its
properties may be bound, including without limitation, the Material Licensing
Agreements, and (d) comply in all material respects with all applicable decrees,
orders, and judgments. If any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that such Borrower or any of its
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which such Borrower or such Subsidiary is a party, such
Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
such Borrower or such Subsidiary to obtain such authorization, consent,
approval, permit or license and furnish the Administrative Agent and the Lenders
with evidence thereof. Without limiting the foregoing, each Borrower will
continuously hold all permits and licenses required for the operation of its
business, including, without limitation all licenses, permits and other
certificates required by any Federal, state or local authority in connection
with the ownership and operation of its business.
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ss.8.11. Employee Benefit Plans. Each Borrower will, and will cause
each of its Subsidiaries to, (i) promptly upon filing the same with the
Department of Labor or Internal Revenue Service, furnish to the Administrative
Agent a copy of the most recent actuarial statement required to be submitted
under ss.103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Administrative Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under ss.ss.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
ss.8.12. Use of Proceeds. Each Borrower will use the proceeds of the
Loans solely to refinance on the Effective Date all of the Indebtedness of the
Borrowers to the Administrative Agent and other lenders under the Existing
Credit Agreement and for working capital and general corporate purposes. The
Borrowers will obtain Letters of Credit solely for general working capital and
general corporate purposes. No portion of the proceeds of any Loans is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of (a) knowingly purchasing, or providing credit support for the purchase of,
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of, during
the underwriting or placement period, any Ineligible Subsidiary, or (c) making,
or providing credit support for the making of, payments of principal or interest
on Ineligible Securities underwritten or privately placed by a Section 20
Subsidiary and issued by or for the benefit of the Borrower or any Subsidiary or
other Affiliate of either Borrower.
ss.8.13. Business. Each Borrower will, and will cause each of its
Subsidiaries to, engage in the same or similar or related business as that
conducted on the Effective Date.
ss.8.14. Further Assurances. Each Borrower will, and will cause each
of its Subsidiaries to, cooperate with the Lenders and the Administrative Agent
and execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Credit Agreement and the other Loan
Documents.
ss.8.15. Payment of Wages. The Borrowers and each of their
Subsidiaries shall at all times comply, in all material respects, with the
requirements of the Fair Labor Standards Act, as amended, including, without
limitation, the provisions of such Act relating to the payment of minimum and
overtime wages as the same may become due from time to time.
ss.8.16. Cash Management System. The Borrowers will, and will cause
each of their Subsidiaries to, utilize and maintain the Cash Management System
for all deposits made by any of them. The Cash Management System shall be
operated solely for the business of the Borrowers and their Subsidiaries.
ss.8.17. Bank Accounts. The Borrowers will, and will cause each of
its Subsidiaries to, together with the employees, agents and other Persons
acting on
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behalf of the Borrowers or such Subsidiary, receive and hold in trust for the
Administrative Agent and the Lenders all payments constituting proceeds of
Accounts Receivable or other Collateral which come into their possession or
under their control and, immediately upon receipt thereof, deposit such payments
in the form received, with any appropriate endorsements, in one of the accounts
designated as a central depository account on Schedule 7.22.
ss.8.18. Lender Meeting. The Borrowers will, and will cause each of
their Subsidiaries to, if requested by the Administrative Agent, participate in
a meeting of the Lenders once during each fiscal year to be held at a location
and a time selected by the Borrowers and acceptable to the Agents and Lenders.
ss.8.19. Interest Rate Protection Arrangements. The Borrowers agree
that within ten (10) Business Days after the Effective Date, they will enter
into and maintain interest rate protection arrangements, in form and substance
satisfactory to the Administrative Agent, in a notional amount of not less than
$35,000,000, insuring that prior to the Maturity Date the LIBOR Rate used in
determining the maximum annual interest rate applicable to the Loans shall not
exceed a rate reasonably satisfactory to the Administrative Agent.
ss.8.20. Auditor's Opinion. On or before April 14, 1998, the
Borrowers shall provide the Agents and each of the Lenders an unqualified
opinion by Ernst & Young LLP in respect of the financial statements referenced
in ss.7.5(a).
ss.8.21. Consulting Arrangements. The Borrowers shall maintain the
consulting arrangements referenced in ss.11.13 (or replacement consulting
arrangements satisfactory to the Administrative Agent and the Lenders) until the
Administrative Agent has received the financial statements required under
ss.8.4(a) in respect of the Borrowers' fiscal year ending on December 31, 1998.
ss.8.22. Subordination Agreement. On or before April 14, 1998, the
Borrowers and Xxxxx Xxxxxxxxx shall have entered into a Subordination Agreement
(in form and substance satisfactory to the Administrative Agent and the Lenders
in their sole discretion) in respect of certain fees, interest and other amounts
charged by Xxxxx Xxxxxxxxx in connection with the Beckerman Guaranty; and at all
times prior to the effectiveness of the Subordination Agreement, no such fees,
interest or other amounts shall be payable or paid to Xxxxx Xxxxxxxxx by either
Borrower or any of its respective Affiliates.
ss.9. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. Each Borrower covenants
and agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of
Credit or Note is outstanding or any Lender has any obligation to make any Loans
or the Administrative Agent has any obligation to issue, extend or renew any
Letter of Credit:
ss.9.1. Restrictions on Indebtedness. Neither Borrower will, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee or
be or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
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(a) Indebtedness to the Lenders and the Administrative Agent arising
under any of the Loan Documents;
(b) current liabilities of such Borrower or such Subsidiary incurred
in the ordinary course of business not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in accordance
with the provisions of ss.8.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which such Borrower or such
Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course
of business;
(f) obligations under Capitalized Leases not exceeding $3,000,000 in
aggregate amount for all Borrowers and their respective Subsidiaries with
respect to any fiscal year;
(g) unsecured direct Indebtedness for borrowed money (excluding any
guaranty or other contingent obligations) in an aggregate amount not to exceed
$5,000,000 at any time; and
(h) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto.
ss.9.2. Restrictions on Liens. Neither Borrower will, and will not
permit any of its Subsidiaries to, (a) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; or (f) enter into or permit to exist any
arrangement or agreement which directly or
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indirectly prohibits either Borrower from creating or incurring any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind, other than pursuant to the Security Documents; provided that such
Borrower and any Subsidiary of such Borrower may create or incur or suffer to be
created or incurred or to exist:
(i) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties other
than Real Estate to secure claims for labor, material or supplies in
respect of obligations not overdue;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iii) liens on properties other than Real Estate in respect of
judgments or awards, the Indebtedness with respect to which is permitted
by ss.9.1(d);
(iv) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties other than Real Estate, in
existence less than 120 days from the date of creation thereof in respect
of obligations not overdue;
(v) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto, landlord's
or lessor's liens under leases to which such Borrower or a Subsidiary of
such Borrower is a party, and other minor liens or encumbrances none of
which in the opinion of such Borrower interferes materially with the use
of the property affected in the ordinary conduct of the business of such
Borrower and its Subsidiaries, which defects do not individually or in the
aggregate have a materially adverse effect on the business of such
Borrower individually or of such Borrower and its Subsidiaries on a
consolidated basis;
(vi) liens existing on the date hereof and listed on Schedule
9.2 hereto;
(vii) purchase money security interests in or purchase money
mortgages on real or personal property other than Real Estate acquired
after the date hereof to secure purchase money Indebtedness of the type
and amount permitted by ss.9.1(g), incurred in connection with the
acquisition of such property, which security interests or mortgages cover
only the real or personal property so acquired; and
(viii) liens in favor of the Administrative Agent for the
benefit of the Lenders and the Administrative Agent under the Loan
Documents.
ss.9.3. Restrictions on Investments. Neither Borrower will, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except:
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(a) Investments in marketable direct or guaranteed obligations of
the United States of America that mature within one (1) year from the date of
purchase by such Borrower;
(b) Investments in demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $2,000,000,000;
(c) Investments in securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by Xxxxx'x
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's;
(d) Investments existing on the date hereof and listed on Schedule
9.3 hereto;
(e) Investments in the form of loans to employees of either
Borrower, other than to Xxxxx Xxxxxxxxx or any family member of Xxxxx Xxxxxxxxx,
not to exceed $100,000 in the aggregate at any time;
(f) Investments in Starter Europe in an aggregate amount not to
exceed $500,000 at any time and which are used for general working capital
purposes only; and
(g) extensions of trade credit in the ordinary course of business.
ss.9.4. Distributions. The Borrowers will not make any
Distributions; provided, that so long as no Default or Event of Default shall
have occurred and be continuing under the Loan Documents (or would result
therefrom), the Borrowers may make non-cash Distributions under (a) the Starter
Corporation Stock Option Plan dated as of January 27, 1993, (b) the Starter
Employee Stock Purchase Plan dated as of June 29, 1994, and (c) the Starter
Non-Employee Director Stock Option Plan dated as of May 24, 1994, a copy of each
of which has previously been delivered to the Administrative Agent.
ss.9.5. Merger, Consolidation and Disposition of Assets.
(a) Neither of the Borrowers will, and will not permit any of their
respective Subsidiaries to, become a party to any merger or consolidation, or
agree to or effect any asset acquisition or stock acquisition (other than the
acquisition of assets in the ordinary course of business consistent with past
practices) except (i) the merger or consolidation of one or more of the
Subsidiaries of the Borrowers with and into either Borrower, (ii) the merger or
consolidation of two or more Subsidiaries of the Borrowers or (iii) any
Investments permitted by the terms hereof.
(b) Neither Borrower will, and will not permit any of its
Subsidiaries to, become a party to or agree to or effect any Asset Sale without
the prior written consent of each of the Lenders.
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ss.9.6. Sale and Leaseback. Neither Borrower will, and neither will
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby such Borrower or any Subsidiary of such Borrower shall sell
or transfer any property owned by it in order then or thereafter to lease such
property or lease other property that such Borrower or any Subsidiary of such
Borrower intends to use for substantially the same purpose as the property being
sold or transferred.
ss.9.7. Business. Neither Borrower will, and neither will permit any
of its Subsidiaries to, (a) engage in any business other than (i) the business
engaged in by such Person on the Effective Date, and similar and related
businesses and (ii) such other lines of business as may be consented to the
Administrative Agent and the Lenders or (b) enter into any management agreement
with any Person except as permitted hereunder.
ss.9.8. Compliance with Environmental Laws. Neither Borrower will,
and neither will permit any of its Subsidiaries to conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law, including (a) using any of the Real Estate or any portion thereof for the
handling, processing, storage or disposal of Hazardous Substances in a manner
that would violate Environmental Laws, (b) causing or permitting to be located
on any of the Real Estate any underground tank or other underground storage
receptacle for Hazardous Substances in a manner that would violate Environmental
Laws, (c) generating of any Hazardous Substances on any of the Real Estate in a
manner that would violate Environmental Laws, or (d) conducting of any activity
at any Real Estate or use any Real Estate in any manner so as to cause a release
(i.e. releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) or threatened
release of Hazardous Substances on, upon or into the Real Estate in a manner
that would violate Environmental Laws.
ss.9.9. Employee Benefit Plans. Neither Borrower, nor any of its
Subsidiaries or any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for such Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of such Borrower or any
of its Subsidiaries pursuant to ss.302(f) or ss.4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans,
disregarding for this
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purpose the benefit liabilities and assets of any such Plan with assets in
excess of benefit liabilities.
ss.9.10. Additional Shares. Neither Borrower will at any time, nor
will either Borrower cause or permit any of its Subsidiaries at any time, to
issue, sell or offer to sell any capital stock of any class which either (x) is
preferred as to dividends or as to distributions of assets upon voluntary or
involuntary dissolution, liquidation or winding up, or (y) is subject to
mandatory redemption prior to the first anniversary of the Maturity Date at the
option of the holders of such stock or upon the occurrence of a stated event.
ss.9.11. Change of Fiscal Year. Neither Borrower nor any of its
Subsidiaries shall change its fiscal year without the prior written consent of
the Majority Lenders, provided that, such consent shall not be unreasonably
withheld.
ss.9.12. Total Commitment Amount. The Borrowers shall not cause or
permit the Total Exposure to exceed the Maximum Available Amount.
ss.9.13. Accounting Practices. Neither Borrower nor any of its
Subsidiaries shall effect any significant change in its accounting practices or
treatment except as may be permitted or required by generally accepted
accounting principles and only after prior written notice to the Agents.
ss.9.14. Limitation on Other Restrictions on Amendment of Loan
Documents. Neither Borrower will, and will not permit any of its Subsidiaries
to, enter into, suffer to exist or become or remain subject to any agreement or
instrument to which such Person is a party or by which such Person or any
property of such Person (now owned or hereafter acquired) may be subject or
bound, except for the Loan Documents, that would prohibit or restrict in any
manner (directly or indirectly and including by way of covenant representation
or warranty or event of default), or require the consent of any Person to, any
amendment to, or waiver or consent to departure from the terms of, any of the
Loan Documents.
ss.10. FINANCIAL COVENANTS OF THE BORROWERS. Each Borrower covenants and
agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of
Credit or Note is outstanding or any Lender has any obligation to make any
combined Loans or the Administrative Agent has any obligation to issue, extend
or renew any Letter of Credit:
ss.10.1. Fixed Charge Coverage Ratio. As of the last day of any
fiscal quarter ending after the Test Initiation Date, the Borrowers shall not
permit the ratio of Consolidated Operating Cash Flow for the four fiscal-quarter
period ending on such date to Consolidated Total Interest Expense for the four
fiscal-quarter period ending on such date to be less than 1.00 to 1.
ss.10.2. Consolidated Net Worth. The Borrowers shall not at any time
permit the Consolidated Net Worth of Starter to be less than the sum of (x)
$45,000,000 plus (y) fifty percent (50%) of Starter's positive Net Income
(calculated on a cumulative basis) for each fiscal year of Starter ending on or
after December 31, 1998. This covenant shall be tested annually, at the end of
each fiscal year of Starter.
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ss.11. CONDITIONS TO EFFECTIVE DATE. The obligations of the Lenders to
amend and restate the Existing Credit Agreement and to make the initial Loans
and of the Administrative Agent to issue any initial Letter of Credit, shall be
subject to the satisfaction of the following conditions precedent on or prior to
March 31, 1998:
ss.11.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document, certified as true and correct by the Borrowers.
ss.11.2. Certified Copies of Charter Documents. Each of the Agents
shall have received from each Borrower and each of its Subsidiaries a copy,
certified by a duly authorized officer of such Person to be true and complete on
the Effective Date, of each of (a) its charter or other incorporation documents
as in effect on such date of certification, and (b) its by-laws as in effect on
such date.
ss.11.3. Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by each Borrower and each of its
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agents shall have been provided to each of
the Agents.
ss.11.4. Incumbency Certificates. Each of the Agents shall have
received from each Borrower and each of the Borrowers' Subsidiaries an
incumbency certificate, dated as of the Effective Date, signed by a duly
authorized officer of such Person, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of Person, each of the Loan Documents to which such Person is or
is to become a party; (b) in the case of such Borrower, to make Loan Requests
and apply for Letters of Credit; and (c) to give notices and to take other
action on such Persons behalf under the Loan Documents.
ss.11.5. Legality of Transactions. No change in applicable law shall
have occurred as a consequence of which it shall have become and continue to be
unlawful (a) for any Lender or the Administrative Agent to perform any of its
agreements or obligations under any of the Loan Documents to which any such
Person is a party on the Effective Date or (b) for either Borrower or any of its
Subsidiaries to perform any of its agreements or obligations under any of the
Loan Documents to which it is a party on the Effective Date.
ss.11.6. Validity of Liens. The Security Documents shall be
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable first (except for Permitted Liens
entitled to priority under applicable law) security interest in and lien upon
the Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Administrative Agent to
protect and preserve such security interests (including without limitation
payment of all applicable filings and recording charges and taxes) shall have
been duly effected. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.
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ss.11.7. UCC Search Results. The Administrative Agent shall have
received UCC searches with respect to the Collateral, indicating no liens other
than Permitted Liens and otherwise in form and substance satisfactory to the
Administrative Agent.
ss.11.8. Certificates of Insurance. The Administrative Agent shall
have received (a) a certificate of insurance from an independent insurance
broker dated as of the Effective Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained and endorsed to the Administrative Agent for the benefit of the Lenders
and (b) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer).
ss.11.9. Proceedings and Documents. All corporate, partnership,
governmental and other proceedings in connection with the transactions
contemplated by the Loan Documents and all instruments and documents incidental
thereto, shall be in form and substance reasonably satisfactory to the Lenders
and the Lenders shall have received all such counterpart originals or certified
or other copies of all such instruments and documents as the Lenders shall have
reasonably requested.
ss.11.10. Borrowers' Condition. The Lenders shall be satisfied that
the financial statements referred to in ss.7.5 fairly present the business and
financial condition of the Borrowers, as at and for the periods ending on the
respective dates thereof, and that, except for changes described in writing to
the Lenders and acceptable to them, there has been no material adverse change in
the assets, business or condition (financial or otherwise) of either Borrower
since the applicable dates set forth in ss.7.5 hereof.
ss.11.11. Opinion of Counsel. Each of the Lenders and the Agents
shall have received a favorable legal opinion addressed to the Lenders and the
Agents, dated as of the Effective Date, in form and substance satisfactory to
the Lenders and the Agents, from:
(a) Xxxxxxxx & Xxxxxxxx, counsel to the Borrowers, their
Subsidiaries;
(b) Xxxx & Xxxxxxxxx, P.C., counsel to Xxxxx Xxxxxxxxx;
(c) Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel to Xxxxx Xxxxxxxxx and The
Bank of New York; and
(d) Xxxxxxxx, Xxxxx & Xxxxxxx, PLC, Tennessee counsel to the
Borrowers and their Subsidiaries.
ss.11.12. Payment of Arranger's and Administrative Agent's Fees. The
Borrowers shall have paid the fees to the Arranger and the Administrative Agent
pursuant to ss.5.1.
ss.11.13. Consulting Arrangements. The Administrative Agent and the
Lenders shall have received evidence satisfactory to the Administrative Agent
and the
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Lenders that the Borrowers have entered into business consulting arrangements
with a consultant satisfactory to the Lenders and the Administrative Agent, on
terms satisfactory to the Administrative Agent and the Lenders.
ss.11.14. Projections. The Administrative Agent shall have received
(i) projected financial statements of the Borrowers (including projected
consolidated and the consolidating balance sheets of the Borrowers and their
Subsidiaries, and the related consolidated and consolidating statements of
income and statements of cash flow, each in reasonable detail) and Borrowing
Base availability projections, in each case in respect of the Borrowers' fiscal
year ending December 31, 1998, in form and substance satisfactory to the Lenders
and the Agents, and (ii) evidence satisfactory to the Lenders and the Agents
that the foregoing projections have been reviewed and approved by Xxxxxx & Co.
ss.11.15. Cash Management System. The Borrowers shall have created a
cash management system (the "Cash Management System") satisfactory to the
Administrative Agent, and all agreements related thereto shall have been
delivered to the Administrative Agent and shall be satisfactory to the
Administrative Agent.
ss.11.16. Borrowing Base Report. The Administrative Agent shall have
received from the Borrowers the initial Borrowing Base Report as of the
Effective Date.
ss.11.17. Accounts Receivable Aging Report. The Administrative
Agents shall have received from the Borrowers the most recent Accounts
Receivable aging report of the Borrowers and their Subsidiaries dated as of a
date which shall be no more than fifteen (15) days prior to the Effective Date
and the Borrowers shall notify the Administrative Agent in writing on the
Effective Date of any material deviation from the Accounts Receivable values
reflected in such Accounts Receivable aging report and shall provide the
Administrative Agent with such supplementary documentation as the Administrative
Agent may reasonably request.
ss.11.18. Field Exams. The Lenders shall have received copies of the
field exams conducted by the Lender's commercial financial examiners, such exams
to be in form, substance and detail satisfactory to the Lenders in all respects.
ss.11.19. Material Licensing Agreements; Licensor Consents. The
Lenders and the Agents shall have received certified copies of all Material
Licensing Agreements in effect on the Effective Date, each in form and substance
satisfactory to the Lenders and the Agents, together with fully executed
original licensor consents and agreements in form and substance satisfactory to
the Lenders and the Agents (the "Licensor Consents") in respect of each such
Material Licensing Agreement.
ss.11.20. Leases; Lessor Agreements. The Lenders and the Agents
shall have received certified copies of all real property leases to which either
of the Borrowers or any of their Subsidiaries is a party, each in form and
substance satisfactory to the Lenders and the Agents, together with fully
executed original lessor consents and agreements in form and substance
satisfactory to the Lenders and the Agents (the "Lessor Agreements") in respect
of each such lease.
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ss.11.21. Consents. The Original Banks that will not be a party to
this Credit Agreement shall have consented in writing to the transactions
contemplated hereby on terms satisfactory to the Administrative Agent.
ss.12. CONDITIONS TO ALL BORROWINGS. The obligations of the Lenders to
make any Loan, and the Administrative Agent to issue, extend or renew any Letter
of Credit in each case whether on or after the Effective Date, shall also be
subject to the satisfaction of the following conditions precedent:
ss.12.1. Representations True; No Event of Default. Each of the
representations and warranties of the Borrowers and their Subsidiaries contained
in this Credit Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
ss.12.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Lender would make it illegal for such Lender to make such Loan or
participate in the issuance, extension or renewal of such Letter of Credit, or
in the opinion of the Administrative Agent would make it illegal for the
Administrative Agent to issue, extend or renew such Letter of Credit.
ss.12.3. Governmental Regulation. Each Lender shall have received
such statements in substance and form reasonably satisfactory to such Lender as
such Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
ss.12.4. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be satisfactory in
substance and in form to the Lenders and to the Administrative Agent and the
Administrative Agent's Special Counsel, and the Lenders, the Administrative
Agent and such counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Administrative
Agent may reasonably request.
ss.12.5. Borrowing Base Report. The Administrative Agent shall have
received from the Borrowers the most recent Borrowing Base Report required to be
delivered to the Administrative Agent in accordance with ss.8.4(f) and, if
requested by the Administrative Agent, a Borrowing Base Report dated within five
(5) days of the Drawdown Date of the requested Loan.
ss.13. EVENTS OF DEFAULT; ACCELERATION; ETC.
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ss.13.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) either Borrower shall fail to pay any principal of the Loans or
any Reimbursement Obligation when the same shall become due and payable, whether
at the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(b) either Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx
shall fail to pay any interest on the Loans, the facility fee, the
Administrative Agent's and Arranger's fees, the Letter of Credit Fees or other
sums due hereunder or under any of the other Loan Documents, after the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) Xxxxx Xxxxxxxxx shall fail to comply with any covenants in the
Beckerman Guaranty;
(d) either Borrower shall fail to comply with any of its covenants
contained in xx.xx. 8, 9 or 10;
(e) either Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx
shall fail to perform any term, covenant or agreement contained herein or in any
of the other Loan Documents (other than those specified elsewhere in this
ss.13.1) for thirty (30) days after written notice of such failure has been
given to such Borrower by the Administrative Agent;
(f) any representation or warranty of either Borrower, any of its
Subsidiaries or Xxxxx Xxxxxxxxx in this Credit Agreement or any of the other
Loan Documents or in any other document or instrument delivered pursuant to or
in connection with this Credit Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
(g) either Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace (not to exceed thirty (30)
days), any obligation in excess of $500,000 for borrowed money or credit
received or in respect of any Capitalized Leases, or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing an amount presently outstanding in excess of
$500,000 in respect of borrowed money or credit received or in respect of any
Capitalized Leases for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(h) either Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx
shall make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of such Borrower, any of its Subsidiaries or
Xxxxx Xxxxxxxxx or of any substantial part of the assets of such Borrower, any
of its Subsidiaries or Xxxxx Xxxxxxxxx or shall commence
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any case or other proceeding relating to such Borrower, any of its Subsidiaries
or Xxxxx Xxxxxxxxx under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against such Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx and
such Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx shall indicate its
approval thereof, consent thereto, acquiescence therein or otherwise remain
undismissed for a period of sixty (60) days;
(i) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating either Borrower, any of its
Subsidiaries or Xxxxx Xxxxxxxxx bankrupt or insolvent, or approving a petition
in any such case or other proceeding, or a decree or order for relief is entered
in respect of such Borrower, any Subsidiary of such Borrower or Xxxxx Xxxxxxxxx
in an involuntary case under federal bankruptcy laws as now or hereafter
constituted (which order is not dismissed within sixty (60) days after the entry
thereof);
(j) there shall remain in force, undischarged, unsatisfied, unstayed
for more than thirty (30) days, whether or not consecutive, any final judgment
(unless bonded pending appeal) against the Borrowers or any of their
Subsidiaries that, with other outstanding final judgments, undischarged, against
the Borrowers or any of their Subsidiaries exceeds in the aggregate $500,000;
(k) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Lenders, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of either
Borrower, any of its Subsidiaries or Xxxxx Xxxxxxxxx party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;
(l) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Lenders shall have determined in
their reasonable discretion that such event reasonably could be expected to
result in liability of the Borrowers or any of their Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and
such event in the circumstances occurring reasonably could constitute grounds
for the termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Plan; or the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan;
(m) either Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or
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regulatory agency from conducting any material part of its business and such
order shall continue in effect for more than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of either Borrower or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of such Borrower
or such Subsidiary;
(o) the Borrowers or any of their Subsidiaries shall be indicted for
a federal crime, a punishment for which could include the forfeiture of any
assets of the Borrowers or such Subsidiaries, such assets of the Borrowers or
such Subsidiaries having a fair market value in excess of $100,000;
(p) the Borrowers or any of their Subsidiaries shall be in default
under any Material Licensing Agreement and such default shall not have been
cured to the satisfaction of the licensor under such Material Licensing
Agreement, or any of such Material Licensing Agreements shall have been
terminated or not renewed (other than Material Licensing Agreements which relate
to specific special events (i.e. Olympics) that mature by their terms);
(q) the Borrowers or any of their Subsidiaries shall lose any other
license, permit, lease or other agreement, the loss of which would reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
either Borrower or any of its Subsidiaries;
(r) Xxxxx Xxxxxxxxx shall, at any time, legally or beneficially own
less than fifty-one percent (51%) of the issued and outstanding capital stock of
Starter, on a fully diluted basis;
(s) Starter and/or the wholly owned Subsidiaries of Starter shall,
at any time, legally or beneficially own less than one hundred percent of the
issued and outstanding capital stock of each of Starter Galt, Starter Europe,
Far East and Starter Outlet on a fully diluted basis; or
(t) Xxxxx Xxxxxxxxx shall die or become legally incapacitated;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; provided
that in the event of any Event of Default specified in ss.ss.13.1(h), 13.1(i) or
13.1(k), all such amounts shall become immediately due and payable automatically
and without any requirement of notice
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from the Administrative Agent or any Lender; provided further that in the event
of any Event of Default specified in ss.ss.13.1(h), 13.1(i) or 13.1(k), the
Total Commitments of the Lenders shall immediately terminate and all such
amounts owing shall become immediately due and payable automatically and without
any requirement of notice from the Administrative Agent or the Lenders. No
remedy herein conferred upon the Lenders is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
ss.13.2. Termination of Commitments. If any one or more of the
Events of Default specified in ss.13.1(h), ss.13.1(i) or ss.13.1(k) shall occur,
any unused portion of the Total Commitment hereunder shall forthwith terminate
and each of the Lenders shall be relieved of all further obligations to make
Loans to the Borrowers and the Administrative Agent shall be relieved of all
further obligations to issue, extend or renew Letters of Credit and the
Borrowers shall pay to the Administrative Agent an amount equal to the sum of
the Maximum Drawing Amount, plus all Unpaid Reimbursement Obligations to be held
by the Administrative Agent as cash collateral as contemplated by ss.4.3(c). If
any other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date or other date for issuing, extending or renewing any Letter of
Credit the conditions precedent to the making of the Loans to be made on such
Drawdown Date or (as the case may be) to issuing, extending or renewing such
Letter of Credit on such date are not satisfied, the Administrative Agent may
and, upon the request of the Majority Lenders, shall, by notice to the
Borrowers, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Lenders shall be relieved of all further obligations
to make Loans and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit and the Borrowers shall
pay to the Administrative Agent an amount equal to the sum of the Maximum
Drawing Amount, plus all Unpaid Reimbursement Obligations to be held by the
Administrative Agent as cash collateral as contemplated by ss.4.3(c). No
termination of the credit hereunder shall relieve either Borrower or any of its
Subsidiaries of any of the Obligations.
ss.13.3. Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.13.1, each Lender, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Lenders but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Lender. No remedy herein conferred upon any Lender or the Administrative Agent
or the holder of any Note or purchaser of any Letter of Credit Participation is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
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ss.13.4. Distribution of Collateral Proceeds. In the event that the
Administrative Agent receives the proceeds of the Life Insurance Policy or in
the event that, following the occurrence or during the continuance of any
Default or Event of Default, the Administrative Agent or any Lender, as the case
may be, receives any monies in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Administrative Agent in connection with the collection of such
monies by the Administrative Agent, for the exercise, protection or enforcement
by the Administrative Agent of all or any of the rights, remedies, powers and
privileges of the Administrative Agent under this Credit Agreement or any of the
other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Administrative Agent against any taxes or
liens which by law shall have, or may have, priority over the rights of the
Administrative Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Lenders may determine; provided, however, that distributions in
respect of such obligations shall be made (i) pari passu among Obligations with
respect to the Administrative Agent's and Arranger's fees payable pursuant to
ss.5.1 and all other Obligations and (ii) Obligations owing to the Lenders with
respect to each type of Obligation such as interest, principal, fees and
expenses, shall be made among the Lenders pro rata; and provided, further, that
the Administrative Agent may in its discretion make proper allowance to take
into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lenders and the Administrative Agent of
all of the Obligations, to the payment of any obligations required to be paid
pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of the State of
Connecticut as in effect from time to time; and
(d) Fourth, the excess, if any, shall be returned to the Borrowers
or to such other Persons as are entitled thereto.
ss.14. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any of the Lenders to either Borrower and any securities or other
property of such Borrower in the possession of such Lender may be applied to or
set off by such Lender against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of such Borrower to such Lender. Each of the
Lenders agrees with each other Lender that (a) if an amount to be set off is to
be applied to Indebtedness of the Borrowers to such Lender, other than
Indebtedness evidenced by the Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all
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such Notes held by such Lender or constituting Reimbursement Obligations
owed to such Lender, and (b) if such Lender shall receive from either Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by, or
constituting Reimbursement Obligations owed to, such Lender by proceedings
against such Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by, or
Reimbursement Obligations owed to, such Lender any amount in excess of its
ratable portion of the payments received by all of the Lenders with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, either by way of distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Notes held by it or Reimbursement Obligations owed to it, its
proportionate payment as contemplated by this Credit Agreement; provided that if
all or any part of such excess payment is thereafter recovered from such Lender,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
ss.15. THE AGENTS.
ss.15.1. Authorization. The Administrative Agent is authorized to
take such action on behalf of each of the Lenders and to exercise all such
powers as are hereunder and under any of the other Loan Documents and any
related documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Administrative Agent. The relationship between the
Administrative Agent and the Lenders is and shall be that of agent and principal
only, and nothing contained in this Credit Agreement or any of the other Loan
Documents shall be construed to constitute the Administrative Agent as a trustee
for any Lender. The Syndication Agent shall have no independent powers, duties
or obligations under this Credit Agreement.
ss.15.2. Employees and Agents. The Administrative Agent may exercise
its powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrowers.
ss.15.3. No Liability. Neither the Administrative Agent nor any of
its shareholders, directors, officers or employees nor any other Person
assisting them in their duties nor any agent or employee thereof, shall be
liable for any waiver, consent or approval given or any action taken, or omitted
to be taken, in good faith by it or them hereunder or under any of the other
Loan Documents, or in connection herewith or therewith, or be responsible for
the consequences of any oversight or error of judgment whatsoever, except that
the Administrative Agent or such other Person, as the case may be, shall be
liable for losses due to its willful misconduct or gross negligence.
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ss.15.4. No Representations. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this Credit
Agreement, the Notes, any Letter of Credit, any of the other Loan Documents or
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or for
the validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrowers or any of their Subsidiaries, or, except as expressly provided for
herein, be bound to ascertain or inquire as to the performance or observance of
any of the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrowers or any of their Subsidiaries. The Administrative Agent shall not
be bound to ascertain whether any notice, consent, waiver or request delivered
to it by the Borrowers or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Administrative Agent has not
made nor does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Lenders, with respect to the credit
worthiness or financial condition of the Borrowers or any of their Subsidiaries.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based upon such information
and documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
ss.15.5. Payments.
(a) A payment by the Borrowers to the Administrative Agent hereunder
or any of the other Loan Documents for the account of any Lender shall
constitute a payment to such Lender. The Administrative Agent agrees promptly to
distribute to each Lender such Lender's pro rata share of payments received by
the Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
(b) If in the opinion of the Administrative Agent the distribution
of any amount received by it in such capacity hereunder, under the Notes or
under any of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Administrative Agent is to be repaid, each Person to whom any such distribution
shall have been made shall either repay to the Administrative Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Credit Agreement or any of the other Loan Documents, any Lender that fails (i)
to make available to the Administrative Agent its pro rata share of any Loan or
to purchase a Letter of Credit Participation or (ii) to comply with the
provisions of ss.15 with respect to making dispositions and arrangements with
the other Lenders, where such Lender's
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share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of the
Lenders, in each case as, when and to the full extent required by the provisions
of this Credit Agreement, shall be deemed delinquent (a "Delinquent Lender") and
shall be deemed a Delinquent Lender until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from the Borrowers, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Lenders for application to, and reduction of, their respective pro
rata shares of all outstanding Loans and Unpaid Reimbursement Obligations. The
Delinquent Lender hereby authorizes the Administrative Agent to distribute such
payments to the nondelinquent Lenders in proportion to their respective pro rata
shares of all outstanding Loans and Unpaid Reimbursement Obligations. A
Delinquent Lender shall be deemed to have satisfied in full a delinquency when
and if, as a result of application of the assigned payments to all outstanding
Loans and Unpaid Reimbursement Obligations of the nondelinquent Lenders, the
Lenders' respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency.
ss.15.6. Holders of Notes. The Administrative Agent may deem and
treat the payee of any Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
ss.15.7. Indemnity. The Lenders ratably agree hereby to indemnify
and hold harmless the Administrative Agent from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Administrative Agent has not been
reimbursed by the Borrowers as required by ss.16), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Administrative Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Administrative Agent's willful misconduct or gross
negligence.
ss.15.8. Agents as Lenders. In their respective individual
capacities, BankBoston and Citibank shall each have the same obligations and the
same rights, powers and privileges in respect to its respective Commitment and
the Loans made by it, and as the holder of any of the Notes and as the purchaser
of any Letter of Credit Participation, as it would have were it not also the
Administrative Agent and Syndication Agent, respectively.
ss.15.9. Resignation. The Administrative Agent may resign at any
time by giving sixty (60) days' prior written notice thereof to the Lenders and
the Borrowers. Upon any such resignation, the Majority Lenders shall have the
right to appoint a successor Administrative Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Administrative
Agent shall be reasonably acceptable to the Borrowers. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders and
shall have accepted such
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appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a financial institution having a rating of not less than [A] or its equivalent
by Standard & Poor's Corporation. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
ss.15.10. Notification of Defaults and Events of Default. Each
Lender hereby agrees that, upon learning of the existence of a Default or an
Event of Default, it shall promptly notify the Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any notice under this
ss.15.10 it shall promptly notify the other Lenders of the existence of such
Default or Event of Default.
ss.15.11. Duties in the Case of Enforcement. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Administrative Agent
shall, if (a) so requested by the Majority Lenders and (b) the Lenders have
provided to the Administrative Agent such additional indemnities and assurances
against expenses and liabilities as the Administrative Agent may reasonably
request, proceed to enforce the provisions of the Security Documents authorizing
the sale or other disposition of all or any part of the Collateral and exercise
all or any such other legal and equitable and other rights or remedies as it may
have in respect of such Collateral. The Majority Lenders may direct the
Administrative Agent in writing as to the method and the extent of any such sale
or other disposition, the Lenders hereby agreeing to indemnify and hold the
Administrative Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Administrative Agent need not comply with any such direction to the extent that
the Administrative Agent reasonably believes the Administrative Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
ss.16. EXPENSES. The Borrowers agree to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Administrative
Agent, any of the Lenders or any of their affiliates (other than taxes based
upon the Administrative Agent's, any Lender's or any affiliate's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrowers hereby agreeing to indemnify the Administrative Agent, each Lender and
each affiliate with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Administrative Agent's Special Counsel or any local counsel
to the Administrative Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and
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amendments, modifications, approvals, consents or waivers hereto or hereunder,
(d) the fees, expenses and disbursements incurred by the Agents or the Arranger
in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including all commercial finance examination, appraisal, environmental, survey
and related charges, (e) any fees, costs, expenses and bank charges, including
bank charges for returned checks, incurred by the Administrative Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral; (f) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Lender or the Administrative
Agent, and reasonable consulting, accounting, auditing, appraisal, investment
banking and similar professional fees and charges) incurred by any Lender, the
Administrative Agent or any of their affiliates in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrowers or any of their Subsidiaries or the administration thereof after
the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Lender's, the Administrative Agent's or any of their affiliates
relationship with the Borrowers or any of their Subsidiaries and (g) all
reasonable fees, expenses and disbursements of any Lender or the Administrative
Agent incurred in connection with UCC searches, UCC filings or mortgage
recordings. The covenants of this ss.16 shall survive payment or satisfaction of
all other Obligations.
ss.17. INDEMNIFICATION. The Borrowers agree to indemnify and hold harmless
the Administrative Agent, the Syndication Agent, the Arranger, the Lenders and
their affiliates from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby including, without limitation, (a) any actual or proposed use by the
Borrowers or any of their Subsidiaries of the proceeds of any of the Loans or
any Letters of Credit, (b) any actual or alleged infringement of any patent,
copyright, trademark, service xxxx or similar right of the Borrowers or any of
their Subsidiaries comprised in the Collateral, (c) the Borrowers or any of
their Subsidiaries entering into or performing this Credit Agreement or any of
the other Loan Documents or (d) with respect to the Borrowers and their
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Lenders, the Administrative Agent, the Syndication Agent, the
Arranger and their affiliates shall be entitled to select their own counsel and,
in addition to the foregoing indemnity, the Borrowers agree to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrowers under this ss.17 are unenforceable for any reason,
the Borrowers hereby agree to make the maximum contribution to the payment
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in satisfaction of such obligations which is permissible under applicable law.
The covenants contained in this ss.17 shall survive payment or satisfaction in
full of all other Obligations provided, however, that the Borrowers and their
Subsidiaries shall have no obligation hereunder to the Administrative Agent, the
Syndication Agent, the Arranger or the applicable Lender, as the case may be,
with respect to indemnified liabilities arising from the gross negligence or
willful misconduct of the Administrative Agent, the Syndication Agent, the
Arranger or such Lender.
ss.18. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers or any of their Subsidiaries pursuant hereto shall be deemed to
have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lenders of any of the Loans and the
issuance, extension or renewal of any Letter of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Lender has any obligation to make any Loans
hereunder or the Administrative Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Lender or the Administrative Agent
at any time by or on behalf of either Borrower or any of its Subsidiaries
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by such Borrower or such Subsidiary
hereunder.
ss.19. ASSIGNMENT AND PARTICIPATION.
ss.19.1. Conditions to Assignment by Lenders. Except as provided
herein, each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Credit Agreement
(including all or a portion of its Commitment Percentage and Commitment and the
same portion of the Loans at the time owing to it and the Notes held by it and
its participation interest in the risk relating to any Letter of Credit);
provided that (a) the Administrative Agent and, so long as no Event of Default
has occurred, the Borrowers shall have given their prior written consent to such
assignment (such consent not be unreasonably withheld), other than assignments
to Affiliates of the assigning Lender which shall not require such consent, (b)
each such assignment shall be of a constant, and not a varying, percentage of
all the assigning Lender's rights and obligations under this Credit Agreement,
(c) each assignment shall be in an amount that is not less than $5,000,000
unless such assigning Lender is assigning its entire Commitment or unless the
assignee is at the time of the assignment a Lender under this Credit Agreement,
and (d) the parties to such assignment shall execute and deliver to the
Administrative Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of Exhibit C hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five
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(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in ss.19.3, be released
from its obligations under this Credit Agreement.
ss.19.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto; (b) the assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers and their Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the Obligations, or
the performance or observance by the Borrowers and their Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.5 and ss.8.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Lender, the Administrative
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Credit Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; (g)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Credit Agreement are required to be
performed by it as a Lender; (h) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance; and (i) such
assignee acknowledges that it has made arrangements with the assigning Lender
satisfactory to such assignee with respect to its pro rata share of Letter of
Credit Fees in respect of outstanding Letters of Credit.
ss.19.3. Register. The Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to it and a register or similar list
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitment Percentage of, and principal amount of the Loans owing to,
and Letter of Credit Participations purchased by, the Lenders from time to time.
The entries in the
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Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Credit Agreement. The Register shall be available for inspection by the
Borrowers and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Administrative Agent a registration fee in the sum of $2,500.00.
ss.19.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (a) record the information
contained therein in the Register, and (b) give prompt notice thereof to the
Borrowers and the Lenders (other than the assigning Lender). Within five (5)
Business Days after receipt of such notice, the Borrowers, at their own expense,
shall execute and deliver to the Administrative Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Lender in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in Assignment and
Acceptance and shall otherwise be substantially the form of the assigned Notes.
Within five (5) days of issuance of any new Notes pursuant to this ss.19.4, the
Borrowers shall deliver an opinion of counsel, addressed to the Lenders and the
Administrative Agent, relating to the due authorization, execution and delivery
of such new Notes and the legality, validity and binding effect thereof, in form
and substance satisfactory to the Lenders. The surrendered Notes shall be
canceled and returned to the Borrowers.
ss.19.5. Participations. Each Lender may sell participations to one
or more banks or other entities in all or a portion of such Lender's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$5,000,000 or multiples thereof, (b) any such sale or participation shall not
affect the rights and duties of the selling Lender hereunder to the Borrowers,
(c) the only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Loans, extend the
term or increase the amount of the Commitment of such Lender as it relates to
such participant, reduce the amount of any facility fees or Letter of Credit
Fees to which such participant is entitled or extend any regularly scheduled
payment date for principal or interest, (d) release of any substantial portion
of the Collateral for the Loans except as permitted in ss.9.5 hereof, and (e) so
long as not Event of Default shall have occurred and be continuing, the
Borrowers shall have given their prior consent to such participation (such
consent not to be unreasonably withheld or delayed); further, provided, that if
BankBoston or any successor Administrative Agent sells participations and such
sale or sales causes such Person's Commitment Percentage less the participations
sold by such Person to be less than ten percent
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(10%), then the Administrative Agent shall resign as Administrative Agent in
accordance with ss.15.9 hereof.
ss.19.6. Disclosure. The Borrowers agree that in addition to
disclosures made in accordance with standard and customary banking practices any
Lender may disclose information obtained by such Lender pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information, (b) not
to disclose such information to a third party and (c) not to make use of such
information for purposes of transactions unrelated to such contemplated
assignment or participation.
ss.19.7. Assignee or Participant Affiliated with the Borrowers. If
any assignee Lender is an Affiliate of the Borrowers, then any such assignee
Lender shall have no right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to ss.13.1 or ss.13.2, and the determination of the Majority Lenders
shall for all purposes of this Credit Agreement and the other Loan Documents be
made without regard to such assignee Lender's interest in any of the Loans. If
any Lender sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is an Borrower or an
Affiliate of an Borrower, then such transferor Lender shall promptly notify the
Administrative Agent of the sale of such participation. A transferor Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Administrative Agent pursuant to ss.13.1 or
ss.13.2 to the extent that such participation is beneficially owned by either
Borrower or any Affiliate of such Borrower, and the determination of the
Majority Lenders shall for all purposes of this Credit Agreement and the other
Loan Documents be made without regard to the interest of such transferor Lender
in the Loans to the extent of such participation.
ss.19.8. Miscellaneous Assignment Provisions. If any assignee Lender
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Administrative Agent certification as to its exemption
from deduction or withholding of any United States federal income taxes. If
BankBoston or any successor Administrative Agent transfers any of its interest,
rights and obligations under this Credit Agreement and such transfer causes such
Person's Commitment Percentage to be less than ten percent (10%), the
Administrative Agent shall, in consultation with the Borrowers and with the
consent of the Borrowers and the Majority Lenders, (a) appoint another Lender to
act as a reference bank hereunder and (b) resign as Administrative Agent in
accordance with ss.15.9 hereof. Anything contained in this ss.19 to the contrary
notwithstanding, any Lender may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Lenders organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall
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release the pledgor Lender from its obligations hereunder or under any of the
other Loan Documents.
ss.19.9. Assignment by Borrowers. Neither Borrower shall assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
ss.20. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes or any Letter of Credit
Application shall be in writing and shall be delivered in hand, mailed by United
States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrowers, 000 Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxxx
00000, Attention: Xx. Xxxx X. Xxxxxx, Senior Vice President, or at such other
address for notice as the Borrowers shall last have furnished in writing to the
Person giving the notice;
(b) if to the Administrative Agent, at 000 Xxxxxxx Xxxxxx, Mail Stop
01-09-06, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, or such other
address for notice as the Administrative Agent shall last have furnished in
writing to the Person giving the notice;
(c) if to the Syndication Agent, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxx Xxxxxx, or such other address for notice as the
Administrative Agent shall last have furnished in writing to the Person giving
the notice;
(d) if to any Lender, at such Lender's address set forth on Schedule
1 hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
ss.21. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS, ARE CONTRACTS
UNDER THE LAWS OF THE STATE OF CONNECTICUT AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF
CONNECTICUT (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX
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XXXXXXXXXXX XX ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWERS IN ACCORDANCE WITH GOVERNING LAW AT THE ADDRESS
SPECIFIED IN ss.21. EACH BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT IN THE STATE OF
CONNECTICUT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
ss.22. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
ss.23. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
ss.24. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in ss.26.
ss.25. WAIVER OF JURY TRIAL. Each Borrower, as an inducement to the
Administrative Agent and the Lenders to enter into this Credit Agreement, hereby
waives its right to a jury trial with respect to any action or claim arising out
of any dispute in connection with this Credit Agreement, the Notes or any of the
other Loan Documents, any rights or obligations hereunder or thereunder or the
performance of which rights and obligations. Except as prohibited by law, each
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary or
punitive damages or any damages other than, or in addition to, actual damages.
Each Borrower (a) certifies that no representative, agent or attorney of any
Lender or the Administrative Agent has represented, expressly or otherwise, that
such Lender or the Administrative Agent would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledges that the
Administrative Agent and the Lenders have been induced to enter into this Credit
Agreement, the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.
ss.26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Neither this Credit Agreement,
any of the Loan Documents, nor any term hereof or thereof may be amended, nor
may any provision hereof or thereof be waived, except by an instrument in
writing signed by the Majority Lenders and, in the case of an amendment, by the
Borrowers, except that in the event of (a) any increase in the amount of any
Commitment (other than by way of assignment pursuant to ss.19 hereof), (b) any
delay or extension in the terms of or any scheduled reduction or increase of
Commitments or repayment of the Loans as provided in ss.2.1 hereof, (c) any
reduction in principal,
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interest or fees due hereunder or postponement of the payment thereof, (d) any
release of Starter Outlet from the obligations under its Guaranty, release of
Xxxxx Xxxxxxxxx from the obligations under the Beckerman Guaranty (other than
automatic reductions or releases pursuant to the express terms of the Beckerman
Guaranty) or the release of any substantial portion of the Collateral for the
Loans except as permitted in ss.9.5 hereof, (e) any waiver of any Default or
Event of Default due to the failure by the Borrowers to pay any sum due to any
of the Lenders hereunder, (f) any amendment of the definition of Permitted
Overadvance Amount, (g) any amendment by more than twenty percent (20%) of the
amount of the Clean Down Amount in ss.2.1 hereof, (h) any amendment of this
ss.26 or of the definition of Majority Lenders or of any portion of this Credit
Agreement as they relate to the relative priorities of payment among the
Obligations, (i) any amendment to ss.3.2(b), or (j) any amendment of the advance
rates under the Borrowing Base, any amendment or waiver of consent may be made
only by an instrument in writing signed by each of the Lenders and, in the case
of an amendment, by the Borrowers. Any amendment to any provision hereunder or
under any other Loan Document governing the rights, obligations or liabilities
of the Administrative Agent or the Syndication Agent, including, without
limitation, of the amount of the Administrative Agent's and Arranger's fees or
any Letter of Credit Fees payable for the Administrative Agent's and the
Syndication Agent's account, in each case in its capacity as such, will be
effective only if any instrument in writing has been signed by each such
affected Person. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Administrative Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances. Any party hereto that fails to respond in accordance with the
terms hereof within 10 Business Days after delivery to such party in accordance
with the terms hereof of a request from the other parties hereto for any
amendment, waiver or other action under this ss.26 shall be deemed to have
consented to the requested action. So long as no Default or Event of Default
shall be continuing, the Borrowers and the Administrative Agent may agree to
replace any Lender that fails or refuses to consent to a requested amendment,
waiver or other action under this ss.26. In such event, the Borrowers and the
Administrative Agent may require such non-consenting Lender to (and such
non-consenting Lender shall) assign pursuant to ss.19 all of its rights and
obligations under this Credit Agreement and the other Loan Documents to another
Lender or Eligible Assignee selected by the Borrowers and satisfactory to
Administrative Agent, for a purchase price equal to the outstanding principal
amount of all Loans, Unpaid Reimbursement Obligations, accrued interest, fees
and other amounts owing to such Lender; provided that (1) neither Agent nor any
Lender shall have any obligation to the Borrowers to find a replacement Lender
or Eligible Assignee, and (2) the Borrowers shall pay all registration fees and
other amounts due under ss.19 in connection with such replacement of the
non-consenting Lender prior to (and as a condition of) such Lender being
replaced.
ss.27. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any
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manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Credit Agreement in any jurisdiction.
ss.28. LIMITATION OF LIABILITY. EXCEPT AS PROHIBITED BY APPLICABLE LAW,
EACH BORROWER WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY
PROCEEDING REFERRED TO IN ss.25 ANY SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH BORROWER (A)
CERTIFIES THAT NONE OF THE ADMINISTRATIVE AGENT, THE DOCUMENTATION AGENT OR ANY
LENDER OR ANY REPRESENTATIVE, AGENT, OR ATTORNEY OF SUCH PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH PERSON WOULD NOT, IN THE EVENT OF ANY
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT, IN
ENTERING INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH SUCH
PERSON IS A PARTY, THAT SUCH PERSON IS RELYING UPON, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS ss.28.
ss.29. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER. EACH BORROWER
REPRESENTS, WARRANTS AND ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS LOAN
AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE A PART IS A "COMMERCIAL TRANSACTION"
WITHIN THE MEANING OF CHAPTER 903A OF CONNECTICUT GENERAL STATUTES, AS AMENDED.
EACH BORROWER HEREBY WAIVES ITS RIGHT TO NOTICE AND PRIOR COURT HEARING OR COURT
ORDER UNDER CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET. SEQ. AS AMENDED OR
UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT
REMEDIES THE ADMINISTRATIVE AGENT OR THE LENDERS MAY EMPLOY TO ENFORCE THEIR
RIGHTS AND REMEDIES HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS. EACH BORROWER
ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT'S ATTORNEY AND/OR ANY LENDER'S
ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT. ss.52-278f, ISSUE A WRIT FOR A
PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. EACH BORROWER ACKNOWLEDGES
AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A
WRIT FOR PREJUDGMENT REMEDY AS AFORESAID AND THE ADMINISTRATIVE AGENT AND THE
LENDERS ACKNOWLEDGE SUCH BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO THE
ISSUANCE OF SAID WRIT.
ss.30. EFFECTIVE DATE. This Credit Agreement shall become effective among
the parties hereto as of the Effective Date. Until the Effective Date, the terms
of the Existing Credit Agreement shall remain in full force and effect.
ss.31. MARSHALLING. The Lenders and Administrative Agent shall not be
required to marshal any present or future collateral security for the Borrowers'
obligations to the Lenders and the Administrative Agent under this Credit
Agreement or the other Loan Documents or to resort to such collateral security
or other assurances of payment in any particular order, and all of the rights of
the Lenders and Administrative Agent in respect of such collateral security
shall be cumulative and in
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addition to all other rights, however existing or arising. To the extent that
they lawfully may, each of the Borrowers hereby agrees that it will not invoke
any law relating to the marshalling of collateral, or any other right or
procedure which might cause delay in or impede the rights of the Lenders and the
Administrative Agent under any document, agreement or instrument evidencing or
securing the Borrowers' obligations to the Lenders and the Administrative Agent
under this Credit Agreement or the Loan Documents and, to the extent that they
lawfully may, each of the Borrowers hereby irrevocably waives the benefits of
all such laws, rights and procedures.
ss.32. CONSENT TO JURISDICTION, CONSULTATION WITH COUNSEL. Each of the
Borrowers agrees that the following courts: (i)state court - any state or local
court of the State of Connecticut and (ii) federal court - United States
District Court for the State of Connecticut, or at the option of the
Administrative Agent, any court in which the Administrative Agent shall initiate
legal or equitable proceedings and which has subject matter jurisdiction over
the matter in controversy, shall have exclusive jurisdiction to hear and
determine any claims or disputes between any Borrower and the Lenders and/or the
Administrative Agent pertaining directly or indirectly to this Credit Agreement
and/or the other Loan Documents or to any matter arising therefrom. Each
Borrower expressly submits and consents in advance to such jurisdiction in any
action or proceeding commenced in such courts, hereby waiving personal service
of the summons and complaint, or other process or papers issued therein, and
agreeing that service of such summons and complaint, or other process or papers,
may be made by registered or certified mail addressed to such Borrower at the
address set forth above. Each Borrower acknowledges that it has carefully read
this Credit Agreement and that it has had an opportunity to consult with an
attorney of its own selection before signing it and each Borrower understands
the effects of this Credit Agreement and is signing it voluntarily.
ss.33. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
33.1. Sharing of Information with Section 20 Subsidiary. Each
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to such Borrower or one or
more of its Subsidiaries, in connection with this Credit Agreement or otherwise,
by a Section 20 Subsidiary. Each Borrower, for itself and each of its
Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary to share with the
Administrative Agent and each Lender any information delivered to such Section
20 Subsidiary by such Borrower or any of its Subsidiaries, and (b) the
Administrative Agent and each Lender to share with such Section 20 Subsidiary
any information delivered to the Administrative Agent or such Lender by such
Borrower or any of its Subsidiaries pursuant to this Credit Agreement, or in
connection with the decision of such Lender to enter into this Credit Agreement;
it being understood, in each case, that any such Section 20 Subsidiary receiving
such information shall be bound by the confidentiality provisions of this Credit
Agreement. Such authorization shall survive the payment and satisfaction in full
of all of Obligations.
33.2. Confidentiality. Each of the Lenders and the Administrative
Agent agrees, on behalf of itself and each of its affiliates, directors,
officers, employees and representatives, to use reasonable precautions to keep
confidential, in accordance
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with their customary procedures for handling confidential information of the
same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrowers or any of their
Subsidiaries pursuant to this Credit Agreement that is identified by such Person
as being confidential at the time the same is delivered to the Lenders or the
Administrative Agent, provided that nothing herein shall limit the disclosure of
any such information (a) after such information shall have become public other
than through a violation of this ss.33, (b) to the extent required by statute,
rule, regulation or judicial process, (c) to counsel for any of the Lenders or
the Administrative Agent, (d) to bank examiners or any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent, or to
auditors or accountants, (e) to the Administrative Agent, any Lender or any
Section 20 Subsidiary, (f) in connection with any litigation to which any one or
more of the Lenders, the Administrative Agent or any Section 20 Subsidiary is a
party, or in connection with the enforcement of rights or remedies hereunder or
under any other Loan Document, (g) to a Subsidiary or affiliate of such Lender
as provided in ss.33.1 or (h) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant agrees to be
bound by the provisions of ss.19.6.
33.3. Prior Notification. Unless specifically prohibited by
applicable law or court order, each of the Lenders and the Administrative Agent
shall, prior to disclosure thereof, notify the Borrower of any request for
disclosure of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) or pursuant to legal process.
33.4. Other. In no event shall any Lender or the Administrative
Agent be obligated or required to return any materials furnished to it or any
Section 20 Subsidiary by the Borrower or any of its Subsidiaries. The
obligations of each Lender under this ss.33 shall supersede and replace the
obligations of such Lender under any confidentiality letter in respect of this
financing signed and delivered by such Lender to the Borrower prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or reimbursement obligations
from any Lender.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the undersigned have caused this Credit Agreement to
be duly executed as of the date first set forth above.
STARTER CORPORATION
By:_____________________________________
Its
STARTER GALT, INC.
By:_____________________________________
Its
BANKBOSTON, N.A.,
individually, and as Administrative Agent
By:_____________________________________
Its
CITIBANK, N.A.,
individually, and as Syndication Agent
By:_____________________________________
Its
SCHEDULE 1
TO CREDIT AGREEMENT
Column A Column B Column C
-------- -------- --------
Commitment from
April 1 of each
Commitment calendar year
from January 16 of through January 15
each calendar year of the next
through March 31 of succeeding Commitment
Name of Lender such calendar year calendar year Percentage
-------------- ------------------ ------------------ ----------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
$65,000,000 $80,000,000 50%
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
$65,000,000 $80,000,000 50%
--------------- --------------- ---
TOTAL: $130,000,000.00 $160,000,000.00 100%
SCHEDULE 2
TO CREDIT AGREEMENT
ss.1.1 Definitions.
The following terms shall have the meanings set forth in this Schedule 2
or elsewhere in the provisions of this Credit Agreement referred to below:
Accounts Receivable. All rights of the Borrowers to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrowers to payment for services rendered in the ordinary course
of business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with generally accepted accounting principles.
Adjustment Date. Initially, the date that the Administrative Agent and the
Lenders receive the audited financial statements required under ss.8.4(a) hereof
in respect of the Borrowers' fiscal year ending on December 31, 1998; and
thereafter, on the first day of the fiscal calendar month immediately following
the fiscal quarter in which the financial statements required under ss.8.4
hereof are delivered by the Borrowers pursuant to such Section.
Administrative Agent's Head Office. The Administrative Agent's head office
located at 000 Xxxxxxx Xxxxxx, Mail Stop 01-09-06, Xxxxxx, Xxxxxxxxxxxxx 00000,
or at such other location as the Administrative Agent may designate from time to
time.
Administrative Agent. BankBoston, N.A. acting as administrative agent
for the Lenders.
Administrative Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other
counsel as may be approved by the Administrative Agent.
Affiliate. Any Person that would be considered to be an affiliate of
either Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if such Borrower were
issuing securities.
Agents. Collectively, the Administrative Agent and the Syndication
Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin for LIBOR Rate Loans and Base Rate
Loans and the facility fee rate (as applicable) shall be the applicable margin
set forth below with respect to the ratio of Earnings Before Interest and Taxes
to Consolidated Total Interest Expense (the "Interest Coverage Ratio"), as
determined for the period of the four (4) fiscal quarters of the Borrowers
ending immediately prior to the applicable Rate Adjustment Period, expressed as
a per annum rate of interest as follows:
-2-
LIBOR Base Rate Facility
Interest Coverage Applicable Applicable Fee
Level Ratio Margin Margin Rate
----- ----- ------ ------ ----
Greater
Than Or But Less
Equal To Than
Level 1 2.0:1 - 1.500% 0.000% 0.375%
Xxxxx 0 1.5:1 2.0:1 2.000% 0.500% 0.500%
Xxxxx 0 - 1.5:1 3.000% 1.000% 0.500%
Notwithstanding the foregoing, (a) for both the facility fee and for Loans
outstanding during the period commencing on the Effective Date through the date
immediately preceding the first Adjustment Date, the Applicable Margin shall be
set at Xxxxx 0, (b) if (i) a Default or Event of Default occurs hereunder or
(ii) the Borrowers fail to deliver the financial statements referred to in
ss.8.4 hereof, then, for the period commencing on what would have been the next
Adjustment Date to occur subsequent to such failure (if such financial
statements had been delivered) through the date immediately following the date
on which such financial statements are delivered, the Applicable Margin shall be
the highest Applicable Margin set forth above, (c) if the Administrative Agent
delivers a notice to the Borrowers of the Lenders' determination that the
Applicable Margin being applied is not the correct Applicable Margin based on
the Lenders' determination of the relevant Interest Coverage Ratio, accompanied
by the Lenders' reasonably detailed computations in support of this
determination, the Applicable Margin shall be the Applicable Margin which
corresponds with the Lenders' calculations of the Interest Coverage Ratio, and
(d) in the event that the Administrative Agent receives evidence that the
Interest Coverage Ratio of the Borrowers would require the Applicable Margin to
be at a higher level than that which has been applied, then the Applicable
Margin during such Rate Adjustment Period shall be adjusted upward retroactively
on the basis of this determination to the Applicable Margin which would
otherwise have been applicable hereunder, and the Borrowers shall jointly and
severally pay to the Administrative Agent for the account of the Lenders within
three (3) Business Days after notice thereof all interest amounts accrued but
unpaid with respect to such Loans using such adjusted Applicable Margin for any
portion of such Rate Adjustment Period as to which a portion of such interest
has been paid hereunder.
Arranger. BancBoston Securities, Inc.
Asset Sale. Any sale, lease, abandonment or other disposition, or series
of such dispositions (including, without limitation, by merger or consolidation
and whether by operation of law or otherwise), made on or after the Effective
Date by either Borrower or any of its Subsidiaries to any Person of (i) any
capital stock of any of the Subsidiaries of either Borrower, (ii) all or
substantially all of the assets of either Borrower or of any division of either
Borrower or of any of its Subsidiaries, or (iii) any other asset or assets
(other than inventory or equipment disposed of in the ordinary course of
business consistent with past practices of either Borrower and its Subsidiaries)
of either Borrower or any of its Subsidiaries, which when taken together with
all sales or other dispositions of such assets not covered by the foregoing
clauses (i) and (ii), results in proceeds or involves assets having a fair
market value (as
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determined by the Lenders) in excess of $500,000 with respect to any individual
sale or results in proceeds or involve assets having a fair market value in
excess of $500,000 in the aggregate.
Assignment and Acceptance. See ss.19.1.
Assignment of Leases. That certain Assignment of Lease dated May 13, 1997
among the Borrowers, Xxxxx Xxxxxxxxx and the Administrative Agent, as amended
and in effect from time to time.
Availability Reserves. Such reserves as the Administrative Agent from time
to time determines in the Administrative Agent's sole discretion as being
appropriate to reflect the impediments to the Administrative Agent's and the
Lenders' ability to realize upon the Collateral. Without limiting the generality
of the foregoing, Availability Reserves may include (but are not limited to)
reserves based on the following: (i) rent (based upon past due rent and/or
Administrative Agent's receipt of lessor's waivers and agreements acceptable to
Administrative Agent), (ii) customer credit, (iii) payables based upon payables
which are past due normal trade items), (iv) seasonality, (v) shrinkage, (vi)
change in inventory character, composition or mix, (vii) markdowns, and (viii)
markdowns and markups inconsistent with prior period practice and performance,
industry standards, current business plans or advertising calendars and planned
advertising events.
Balance Sheet Date. December 31, 1997.
BankBoston. As defined in the preamble hereto.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BankBoston at its head office in Boston, Massachusetts, as its
"base rate" and (b) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean for any day, the rate per annum 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, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three funds brokers of
recognized standing selected by the Administrative Agent.
Base Rate Loans. Loans bearing interest calculated by reference to the
Base Rate.
Beckerman Cash Collateral Agreement. The Amended and Restated Cash
Collateral Agreement dated of even date herewith made by Xxxxx Xxxxxxxxx in
favor of the Lenders and the Administrative Agent, as amended and in effect from
time to time.
Beckerman Guaranty. The Amended and Restated Guaranty of even date
herewith by Xxxxx Xxxxxxxxx in favor of the Lenders and the Administrative
Agent, to
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be in form and substance satisfactory to the Lenders and the Administrative
Agent, as amended and in effect from time to time.
Beckerman Pledge Agreement. Any pledge or security agreement hereafter
entered into by Xxxxx Xxxxxxxxx and the Administrative Agent in connection with
the Beckerman Guaranty, to be in form and substance satisfactory to the Lenders
and the Administrative Agent, as amended and in effect from time to time.
Borrowers. As defined in the preamble hereto.
Borrower Stock Pledge Agreement. The Stock Pledge Agreement, dated as of
May 13, 1997, between Starter and the Administrative Agent, as amended and in
effect from time to time.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base Report delivered to the Lenders and the Administrative Agent pursuant to
ss.8.4(f), which is equal to the sum of:
(a) 80% of Eligible Accounts Receivable for which invoices have been
issued and are payable; plus
(b) the lesser of (x) $5,000,000 and (y) twenty-five percent (25%)
of the orderly liquidation value of the trademarks owned by Starter and Starter
Galt constituting Collateral, as evidenced by the most recent appraisal
delivered to the Administrative Agent and the Lenders pursuant to ss.8.9(b) or
otherwise; plus
(c) during the period commencing on April 1 of each calendar year
and ending on January 15 of the following calendar year, the lesser of (i)
$90,000,000 and (ii) 60% of the aggregate of (x) the face amount of the issued
and undrawn documentary Letters of Credit specifically supporting the production
of the applicable inventory of Starter and Starter Galt and (y) the Net Book
Value of all Eligible Inventory; plus
(d) during the period commencing on January 16 of each calendar year
and ending on March 31 of such calendar year, the lesser of (i) $50,000,000 and
(ii) 50% of the aggregate of (x) the face amount of the issued and undrawn
documentary Letters of Credit specifically supporting the production of the
applicable inventory of Starter and Starter Galt and (y) the Net Book Value of
all Eligible Inventory.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrowers and in substantially the form of Exhibit E
hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item
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customarily charged directly to expense or depreciated over a useful life of
twelve (12) months or less in accordance with generally accepted accounting
principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by either
Borrower or any of its Subsidiaries in connection with the purchase or lease by
such Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
Capitalized Leases. Leases under which either Borrower or any of its
Subsidiaries is the lessee or Borrower, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or Borrower in accordance with generally accepted accounting
principles.
Cash Collateral Control Agreement. The Amended and Restated Cash
Collateral Control Agreement of even date herewith by and among Xxxxx Xxxxxxxxx,
the Administrative Agent and Bank of New York, as amended and in effect from
time to time.
Cash Management System. See ss.11.15 hereof.
CERCLA. See ss.7.20.
Citibank. As defined in the preamble hereto.
Clean Down Amount. See ss.2.1.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrowers
and their Subsidiaries that are or are intended to be subject to the security
interests and liens created by the Security Documents.
Commitment. With respect to each Lender, the amount set forth on Schedule
1 hereto as the amount of such Lender's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrowers, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate Total
Commitments of all of the Lenders, as such percentage may be adjusted pursuant
to the terms of this Credit Agreement.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrowers and their
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated EBITDA. With respect to the Borrowers and their Subsidiaries
and any particular fiscal period, the consolidated earnings (or loss) from
operations of the Borrowers and their Subsidiaries for such period, after
eliminating (to the extent
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otherwise included in consolidated earnings from operations) therefrom all
extraordinary nonrecurring items of income (including gains on the sale of
assets and earnings from the sale of discounted business lines), and after all
expenses and other proper charges but before payment or provision (to the extent
otherwise charged against consolidated earnings from operations) for (a) any
income taxes or interest expenses for such period, (b) depreciation for such
period, (c) amortization for such period, and (d) all other noncash charges for
such period, all determined in accordance with generally accepted accounting
principles.
Consolidated Cash Interest Expense. With respect to the Borrowers and
their Subsidiaries and any particular fiscal period, the amount of Consolidated
Total Interest Expense which is paid or due to be paid in cash during such
period.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, less to the extent otherwise includable in the
computation of Consolidated Net Worth, any subscriptions receivable.
Consolidated Operating Cash Flow. With respect to the Borrowers and their
Subsidiaries for any particular fiscal period, an amount equal to (a)
Consolidated EBITDA for such period minus (b) the sum of (i) all income taxes
paid (including interest and penalties) during such period (without duplication
of any amounts paid or accrued in prior time periods), plus (ii) the amount of
Capital Expenditures made during such period that are financed by a source other
than the proceeds of the Loans borrowed hereunder.
Consolidated Total Assets. All assets of the Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest required to be paid or accrued by the Borrowers and their
Subsidiaries during such period on all Indebtedness of the Borrowers and their
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases in accordance with generally accepted accounting principles and including
commitment fees, agency fees, facility fees, balance deficiency fees, letter of
credit fees and similar fees or expenses in connection with the borrowing of
money.
Consolidated Total Liabilities. All liabilities of the Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrowers and their
Subsidiaries, whether or not so classified.
Conversion Request. A notice given by the Borrowers to the Administrative
Agent of the Borrowers' election to convert or continue Loan in accordance with
ss.2.8
Credit Agreement. This Credit Agreement, including the Schedules and
Exhibits hereto, as amended and in effect from time to time.
-7-
Default. See ss.13.1.
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of either Borrower, other than
dividends payable solely in shares of common stock of such Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of such Borrower, directly or indirectly through a Subsidiary of such
Borrower or otherwise; the return of capital by such Borrower to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of capital stock of such Borrower.
Domestic Lending Office. Initially, the office of each Lender designated
as such in Schedule 1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with ss.2.7.
Earnings Before Interest and Taxes. The consolidated earnings (or loss)
from the operations of the Borrowers and their Subsidiaries for any period,
after all expenses and other proper charges but before payment or provision for
any income taxes or interest expense for such period, determined in accordance
with generally accepted accounting principles.
Effective Date. The date on which the Administrative Agent reasonably
determines that all of the conditions precedent set forth in ss.ss.11 and 12
have been satisfied.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable and net of any Availability Reserves as determined by the
Administrative Agent in its sole discretion) (i) that the Borrowers reasonably
and in good faith determine to be collectible; (ii) that are with account
debtors that (A) are not Affiliates of either Borrower, (B) purchased the goods
or services giving rise to the relevant Account Receivable in an arm's length
transaction, (C) are not insolvent or involved, whether voluntary or
involuntary, in any case or proceeding under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Administrative Agent's reasonable
judgment, creditworthy; (iii) that are in payment of obligations that have been
fully performed and are not subject to dispute or any other similar claims that
would reduce the cash amount payable therefor; (iv) that are not subject to any
pledge, restriction, security interest or other lien or encumbrance other than
those created by the Loan Documents; (v) in which the Administrative Agent has a
valid and perfected first priority security interest; (vi) that are not (A)
sixty (60) days past due as reflected on the respective invoices therefor and
(B) outstanding for more than one hundred fifty (150) days past the earlier to
occur of (A) the date of the respective invoices therefor and (B) the date of
shipment thereof in the case of goods or the end of the calendar month following
the provision thereof in the case of services; (vii) that are not due from
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an account debtor located in Indiana, Minnesota or New Jersey unless such
Borrower (A) has received a certificate of authority to do business and is in
good standing in such state or (B) has filed a notice of business activities
report with the appropriate office or agency of such state for the current year;
(viii) that are not due from any single account debtor if more than thirty-five
percent (35%) of the aggregate amount of all Accounts Receivable owing from such
account debtor would otherwise not be Eligible Accounts Receivable, unless
approved in writing by the Administrative Agent (except no such consent will be
granted if more than fifty percent (50%) in the aggregate of all of such
Accounts Receivable would otherwise not be Eligible Accounts Receivable); (ix)
that are payable in Dollars; (x) that are not payable from an office outside of
the United States or Puerto Rico, unless payment of such account is assured by a
letter of credit from a financial institution acceptable to the Administrative
Agent, arises from a shipment pursuant to a documentary letter of credit payable
at sight, or is owing from a foreign subsidiary of a U.S. corporation which has
provided a comfort letter to the Administrative Agent that is in form and
substance satisfactory to the Administrative Agent and the Lenders; (xi) that
are not governed by the Federal Assignment of Claims Act, unless the Borrowers
have taken all steps requested by the Administrative Agent to properly perfect
the Administrative Agent's security interest in such Account Receivables, (xii)
that are not secured by a letter of credit unless the Administrative Agent has a
prior, perfected security interest in such letter of credit.
Eligible Assignee. Any of (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $2,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $2,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) any other bank, insurance company,
commercial finance company or other financial institution approved by the
Administrative Agent (such approval not to be unreasonably withheld).
Eligible Inventory. With respect to Starter, Starter Galt and Starter
Outlet, finished goods and raw materials inventory owned by such Persons;
provided that Eligible Inventory shall not include any inventory (i) held on
consignment, not otherwise owned by Starter, Starter Galt or Starter Outlet or
of a type no longer sold by such Persons, (ii) which has been returned by a
customer or is damaged or subject to any legal encumbrance other than Permitted
Liens; (iii) which is not in the possession of such Persons unless the
Administrative Agent has received a waiver from the party in possession of such
inventory in form and substance satisfactory to the Administrative Agent, (iv)
which is held by the Borrowers or such Subsidiary on property leased by either
Borrower or a Subsidiary, unless the Administrative Agent has received a waiver
from the lessor of such leased property and, if any, sublessor thereof in form
and substance satisfactory to the Administrative Agent or the requirement
therefor has been waived in writing by the Administrative Agent, (v) as to
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which appropriate Uniform Commercial Code financing statements showing such
Borrower or such Subsidiary have not been filed in the proper filing office or
offices in order to perfect the Administrative Agent's first priority security
interest therein, (vi) which has been shipped to a customer of either Borrower
or such Subsidiary regardless of whether such shipment is on a consignment
basis, (vii) which is not located within the United States of America, (viii)
which the Administrative Agent reasonably deems to be obsolete or not
marketable, (ix) consisting of "roll goods" having an aggregate fair market
value in excess of $2,000,000, (x) produced in violation of the Fair Labor
Standards Act, (xi) which is in the possession of any customer of Starter,
Starter Galt or Starter Outlet, (xii) which is manufactured under government
contract unless the Borrower's rights under such contract have been validly
assigned to the Administrative Agent pursuant to the Federal Assignment of
Claims Act, (xiii) is inventory of the Borrowers at Starter Outlet in excess of
$8,000,000.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained of contributed to by the Borrowers or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Indemnity Agreement. That certain Indemnity Agreement
Regarding Hazardous Substances dated as of May 13, 1997 among the Borrowers and
their Subsidiaries and the Administrative Agent, as amended and in effect from
time to time.
Environmental Laws. See ss.7.20(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
either Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate Loan,
the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See ss.13.1.
Existing Credit Agreement. See Preamble hereto.
Existing Indebtedness. See Preamble hereto.
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Facility Fee Rate. With respect to the facility fee set forth in ss.2.2,
the rate set forth in the definition of Applicable Margin applicable to such
facility fee.
Far East. Starter Far East Limited, a corporation organized under the laws
of Hong Kong.
Fee Letter. Shall mean that certain fee letter among BankBoston and the
Borrowers dated or to be dated on or prior to the Effective Date.
Generally accepted accounting principles. (a) When used in ss.10, whether
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors and
successors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrowers reflected in their financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrowers adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(3) of ERISA maintained or contributed to by either Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranty. The Guaranty dated as of May 13, 1997 made by Starter Outlet in
favor of the Lenders and the Administrative Agent pursuant to which Starter
Outlet guaranties to the Lenders and the Administrative Agent the payment and
performance of the Obligations, as amended and in effect from time to time.
Hazardous Substances. See ss.7.20(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the
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purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit.
Ineligible Securities. Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under ss.16 of the Banking Act
of 1993 (12 U.S.C. ss.24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
calendar month which includes the Drawdown Date thereof; and (b) as to any LIBOR
Rate Loan in respect of which the Interest Period is (i) 3 months or less, the
last day of such Interest Period and (ii) more than 3 months, the date that is 3
months from the first day of such Interest Period and, in addition, the last day
of such Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
(i) for any Base Rate Loan, the last day of the calendar month; (ii) for any
LIBOR Rate Loan, 1, 2 or 3 months; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest Period
shall be extended to the next succeeding LIBOR Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding LIBOR Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(C) if the Borrowers shall fail to give notice as provided in
ss.2.7, the Borrowers shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then current
Interest Period with respect thereto;
(D) any Interest Period relating to any LIBOR Rate Loan that begins
on the last LIBOR Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last LIBOR Business Day of a calendar month;
and
(E) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances,
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capital contributions or transfers of property to, or in respect of any guaranty
(or other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid; (c) there shall be deducted in respect
of each such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Lenders. BankBoston, Citibank and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of any rights and
obligations of a Lender pursuant to ss.19.
Lessor Agreements. See ss.11.20.
Letter of Credit. See ss.4.1(a).
Letter of Credit Application. See ss.4.1(a).
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Lender designated as
such in Schedule 1 hereto; thereafter, such other office of such Lender, if any,
that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
rate of interest equal to (a) the rate determined by the Administrative Agent at
which Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR
Business Day prior to the first day of such Interest Period, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
LIBOR Rate Loans. Loans bearing interest calculated by reference to the
LIBOR Rate.
Licensor Consents. See ss.11.19.
Life Insurance Assignment. The assignment of the Life Insurance Policy
made by Starter to the Administrative Agent and in form and substance
satisfactory to the Lenders and the Administrative Agent.
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Life Insurance Policy. The policy of life insurance issued to Starter by
Federal Xxxxxx Life Assurance Company covering the life of Xxxxx Xxxxxxxxx in
the face amount of $5,000,000.
Loan Documents. This Credit Agreement, the Notes, the Guaranty, the
Beckerman Guaranty, the Letter of Credit Applications, the Letters of Credit,
the Fee Letter, the Lockbox Agreement, the Beckerman Cash Collateral Agreement,
the Cash Collateral Control Agreement, the Security Documents, the Environmental
Indemnity Agreement, the Reaffirmation Agreement, the Licensor Consents, the
Lessor Agreements, the Subordination Agreement and any other agreement,
instrument or document executed and/or delivered in connection with any of the
foregoing.
Loan Request. See ss.2.6.
Lockbox Agreement. The Lockbox Agreement, dated or to be dated on or prior
to the Effective Date, between Borrowers and the Administrative Agent, in form
and substance satisfactory to the Lenders and the Administrative Agent.
Loans. Revolving credit loans made or to be made by the Lenders to the
Borrowers pursuant to ss.2.
Majority Lenders. As of any date, the Lenders holding at least sixty-six
and two-thirds of one percent (66 2/3%) of the outstanding principal amount of
the Notes on such date; and if no such principal is outstanding, the Lenders
whose aggregate Commitments constitutes at least sixty-six and two-thirds of one
percent (66 2/3%) of the Total Commitment.
Material Licensing Agreement. Any licensing agreement or agreements
between one licensor or any of its affiliates and either Borrower or any of its
Subsidiaries and which accounts for, in the aggregate, $15,000,000 or more of
the Borrowers' consolidated revenues in any fiscal year of the Borrowers.
Maturity Date. March 31, 2001.
Maximum Amount. As defined in the Beckerman Guaranty.
Maximum Available Amount. On any date of determination, the lesser of (i)
the Total Commitment and (ii) the sum of (A) the Borrowing Base plus (B) the
Permitted Overadvance Amount.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrowers or any ERISA
Affiliate.
Net Book Value. Shall mean, at the relevant time of reference thereto, the
net book value of Eligible Inventory determined on a first-in first-out basis
and at lower of
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cost or market, less Availability Reserves as determined by the Lender in its
sole discretion. The "cost" of any Eligible Inventory shall be the lesser of (a)
the calculated cost of purchases, as determined from invoices received by the
Borrowers or any of their Subsidiaries, or from such Borrowers' or such
Subsidiary's purchase journal or stock ledger (based upon such Borrower's
accounting practices, disclosed to the Administrative Agent and in effect on the
date hereof or, if hereafter modified, modified in accordance with generally
accepted accounting principles and disclosed to the Administrative Agent prior
to such modification) and (b) the lowest ticketed or promoted price at which
such Eligible Inventory is offered to the public, after all xxxx-xxxxx (whether
or not such price is then reflected in the accounting system of the Borrowers or
such Subsidiary).
Net Income. Shall mean, for any period and any Person, net income (or
deficit) of such Person, after deduction of all expenses, taxes and other proper
charges for such period, determined in accordance with generally accepted
accounting principles.
Note Record. A Record with respect to a Note.
Notes. See ss.2.4.
Obligations. All indebtedness, obligations and liabilities of the Obligors
and their respective Subsidiaries to any of the Lenders and the Administrative
Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made or Reimbursement Obligations incurred or any of
the Notes, the Letter of Credit Applications, the Letters of Credit or other
instruments at any time evidencing any thereof, and any indebtedness,
obligations and liabilities of the Obligors to the Agents under interest rate
swap agreements or similar interest rate protection agreements . Notwithstanding
anything to the contrary in the foregoing, the term "Obligations" shall in no
event include any indebtedness, obligations or liabilities of the Obligors or
their respective Subsidiaries to BankBoston, N.A. arising or incurred under that
certain Letter of Credit Reimbursement and Security Agreement dated as of
September 24, 1997 between BankBoston, N.A. and Starter Corporation (as amended
and in effect from time to time, the "Letter of Credit Agreement"), which Letter
of Credit Agreement was entered into in connection with the $6,400,000 (original
principal amount) City of New Haven Facility Variable Rate Demand Revenue Bonds
(Starter Sportswear Project - 1986 Series), or any other agreement, instrument
or document executed and/or delivered solely in connection with the Letter of
Credit Agreement.
Obligors. Collectively, the Borrowers, Starter Outlet and Xxxxx X.
Xxxxxxxxx.
Original Banks. See Preamble hereto.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
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Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.9.2.
Permitted Overadvance Amount. On any date of determination, an amount
determined as follows:
(a) (i) $22,000,000 during the period commencing on January 1 of
each calendar year and ending on October 15 of such calendar year;
(b) $7,500,000 during the period commencing on October 16, 1998 and
ending on December 31, 1998;
(c) $5,000,000 during the period commencing on October 16, 1999 and
ending on December 31, 1999; and
(b) $0 during the period commencing on October 16, 2000 and ending
on December 31, 2000.
Notwithstanding the foregoing clauses (a), (b) (c) or (d), the
Permitted Overadvance Amount shall be reduced dollar for dollar by the
amount of any reduction in the Maximum Amount pursuant to the terms of the
Beckerman Guaranty.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, limited liability company or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Reaffirmation Agreement. That certain Confirmation and Reaffirmation
of Loan Documents of even date herewith among the Borrowers, Starter Outlet,
Xxxxx Xxxxxxxxx and the Administrative Agent.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by either Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan referred to in such Note.
Reimbursement Obligation. The Borrowers' joint and several obligation to
reimburse the Administrative Agent and the Lenders on account of any drawing
under any Letter of Credit as provided in ss.4.3.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements dated as of May 13,
1997 between the Borrowers and their Subsidiaries and the Administrative Agent,
as amended and in effect from time to time.
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Security Documents. The Security Agreements, the Assignment of Leases, the
Borrower Stock Pledge Agreement, the Starter Europe Stock Pledge Agreement, the
Trademark Assignments, the Beckerman Pledge Agreement, the Beckerman Cash
Collateral Agreement, the Cash Collateral Control Agreement and the Life
Insurance Assignment.
Settlement. The making of, or receiving of, payments in immediately
available funds, by the Lenders to or from the Administrative Agent in
accordance with ss.2.10(b) hereof to the extent necessary to cause each Lender's
actual share of the outstanding amount of the Base Rate Loans to be equal to
each Lender's Commitment Percentage of the outstanding amount of such Loans, in
any case when, prior to such event or action, the actual share is not so equal.
Settlement Amount. See ss.2.10(b) hereof.
Settlement Date. See ss.2.10.
Starter. See Preamble.
Starter Europe. Starter Europe, B.V., a corporation organized under the
laws of the Netherlands and a wholly owned Subsidiary of Starter.
Starter Europe Stock Pledge Agreement. The Stock Pledge Agreement dated as
of May 13, 1997 between Starter Europe and the Administrative Agent, as amended
and in effect from time to time.
Starter Outlet. Starter Outlet Stores, Inc., a Delaware corporation and
wholly owned Subsidiary of Starter.
Subordination Agreement. A Subordination Agreement to be entered into
among Xxxxx Xxxxxxxxx, the Borrowers and the Administrative Agent after the
Effective Date, to be in form and substance satisfactory to the Administrative
Agent and the Lenders in their sole discretion, as amended and in effect from
time to time.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Syndication Agent. Citibank, N.A. in its capacity as Syndication Agent.
Test Initiation Date. The first date as of which each of the following
conditions has been satisfied: (a) the ratio of (i) Consolidated Operating Cash
Flow of the Borrowers and their Subsidiaries for the four fiscal-quarter period
ending on December 31 of any year from and after the Effective Date to (ii)
Consolidated Total Interest Expense of the Borrowers and their Subsidiaries for
such four fiscal-quarter period is greater than or equal to 1.00 to 1 (as
determined by the Administrative Agent), and (b) the Maximum Amount has been
reduced by at least $2,000,000 pursuant to ss.3(b)(i) of the Beckerman Guaranty.
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Total Commitment. The sum of the Commitments of the Lenders, as in
effect from time to time.
Total Exposure. At any time of determination, the sum of (x) the aggregate
principal amount of Loans then outstanding, plus (y) the Maximum Drawing Amount
at such time, plus (z) all Unpaid Reimbursement Obligations at such time.
Trademark Assignments. The several Trademark Collateral Security and
Pledge Agreements dated as of May 13, 1997 made by the Borrowers and their
Subsidiaries in favor of the Administrative Agent, as amended and in effect from
time to time.
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Administrative Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Administrative Agent and the Lenders on the
date specified in, and in accordance with, ss.4.3.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
ss.1.2. Rules of Interpretation.
(a) Unless otherwise expressly provided herein, (i) references to
agreements (including this Credit Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
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(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the State of Connecticut, have the meanings assigned to them
therein.
(h) Reference to a particular "ss." refers to that section of this Credit
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding," and the word "through" means "to and
including."
(l) This Credit Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
be performed in accordance with their terms.
(l) Each reference in this Credit Agreement and the other Loan Documents
to the exercise of discretion or the like by the Administrative Agent or the
Lenders shall be to that Person's sole and absolute discretion based upon
factors of which that Person then has actual knowledge, exercised in good faith.
(m) This Credit Agreement and the other Loan Documents are the result of
negotiation among and have been reviewed by counsel to the Administrative Agent,
the Syndication Agent, the Borrowers and the other parties, and are the products
of all parties. Accordingly, they shall not be construed against the Lenders,
the Syndication Agent or the Administrative Agent merely because of the
Administrative Agent's, the Syndication Agent's or Lenders' involvement in their
preparation.
