1
EXHIBIT 10.33
[EXHIBIT A TO
AMENDMENT NO. 3]
$400,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of April 9, 1997
and
amended and restated as of
March 19, 1999
among
Venator Group, Inc.
(formerly known as Woolworth Corporation)
The Banks Party Hereto
The Co-Agents Party Hereto
Bank of America National Trust & Savings Association,
as Documentation Agent
The Bank of New York,
as Administrative Agent, LC Agent
and Swingline Bank
and
X.X. Xxxxxx Securities Inc.
BNY Capital Markets, Inc.
NationsBank Xxxxxxxxxx Securities LLC,
as Lead Arrangers
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TABLE OF CONTENTS
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ARTICLE 1
Definitions
Section 1.01. Definitions.....................................................1
Section 1.02. Accounting Terms and Determinations............................24
Section 1.03. Types of Borrowings............................................25
ARTICLE 2
The Credits
Section 2.01. Commitments to Lend............................................26
Section 2.02. Notice of Committed Borrowing..................................26
Section 2.03. Money Market Borrowings........................................27
Section 2.04. Notice to Banks; Funding of Loans..............................31
Section 2.05. Notes..........................................................32
Section 2.06. Maturity of Loans; Mandatory Prepayments of Loans..............32
Section 2.07. Interest Rates.................................................34
Section 2.08. Method of Electing Interest Rates..............................38
Section 2.09. Facility Fees..................................................39
Section 2.10. Optional Termination or Reduction of Commitments...............40
Section 2.11. Mandatory Reduction of Commitments.............................41
Section 2.12. Mandatory Termination of Commitments...........................42
Section 2.13. Optional and Mandatory Prepayments.............................42
Section 2.14. General Provisions as to Payments..............................43
Section 2.15. Funding Losses.................................................44
Section 2.16. Computation of Interest and Fees...............................44
Section 2.17. Letters of Credit..............................................44
Section 2.18. Swingline Loans................................................51
ARTICLE 3
Conditions
Section 3.01. Effective Date.................................................53
Section 3.02. Consequences of Effectiveness..................................53
Section 3.03. Extensions of Credit...........................................54
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ARTICLE 4
Representations and Warranties
Section 4.01. Corporate Existence and Power..................................55
Section 4.02. Corporate and Governmental Authorization; No
Contravention..................................................55
Section 4.03. Binding Effect.................................................55
Section 4.04. Financial Statements...........................................56
Section 4.05. Litigation.....................................................56
Section 4.06. Compliance with Laws...........................................56
Section 4.07. Compliance with ERISA..........................................56
Section 4.08. Environmental Matters..........................................57
Section 4.09. Taxes..........................................................57
Section 4.10. Subsidiaries...................................................57
Section 4.11. Not an Investment Company......................................58
Section 4.12. Full Disclosure................................................58
Section 4.13. Year 2000 Compliance...........................................58
Section 4.14. Ranking........................................................58
ARTICLE 5 Page
Covenants
Section 5.01. Information....................................................59
Section 5.02. Maintenance of Property; Insurance.............................63
Section 5.03. Conduct of Business and Maintenance of Existence...............63
Section 5.04. Compliance with Laws...........................................63
Section 5.05. Inspection of Property, Books and Records......................64
Section 5.06. Negative Pledge................................................64
Section 5.07. Minimum Consolidated Tangible Net Worth........................66
Section 5.08. Leverage Ratio.................................................66
Section 5.09. Limitation on Debt of Subsidiaries.............................67
Section 5.10. Fixed Charge Coverage Ratio....................................68
Section 5.11. Consolidations, Mergers and Sales of Assets....................69
Section 5.12. Use of Proceeds................................................69
Section 5.13. Limitation on Capital Expenditures.............................69
Section 5.14. Investments and Business Acquisitions..........................71
Section 5.15. Restricted Payments............................................72
Section 5.16. New Subordinated Debt..........................................73
Section 5.17. Refunding of the 7% Debentures; Escrow Arrangements............73
Section 5.18. Transactions with Affiliates...................................74
Section 5.19. Additional Guarantors..........................................75
Section 5.20. Collateral Documents...........................................75
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ARTICLE 6
Defaults
Section 6.01. Events of Defaults.............................................77
Section 6.02. Notice of Default..............................................80
Section 6.03. Cash Cover.....................................................80
ARTICLE 7
The Administrative Agent, Lead Arrangers, Documentation Agent and
Co-Agents
Section 7.01. Appointment and Authorization..................................80
Section 7.02. Agents and Affiliates..........................................81
Section 7.03. Obligations of the Co-agents and Document Agent................81
Section 7.04. Obligations of Administrative Agent and Lead Arrangers.........81
Section 7.05. Consultation with Experts......................................81
Section 7.06. Liability of Agents and Lead Arrangers.........................81
Section 7.07. Indemnification................................................82
Section 7.08. Credit Decision................................................82
Section 7.09. Successor Administrative Agent.................................82
Section 7.10. Administrative Agent's Fees....................................83
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.......83
Section 8.02. Illegality.....................................................84
Section 8.03. Increased Cost and Reduced Return..............................84
Section 8.04. Taxes..........................................................87
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans......89
Section 8.06. Substitution of Bank...........................................90
ARTICLE 9
Miscellaneous
Section 9.01. Notices........................................................90
Section 9.02. No Waivers.....................................................91
Section 9.03. Expenses; Indemnificaiton......................................91
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Section 9.04. Sharing of Set-offs ...........................................92
Section 9.05. Amendments and Waivers.........................................93
Section 9.06. Successors and Assigns.........................................93
Section 9.07. No-Reliance on Margin Stock....................................95
Section 9.08. Governing Law; Submission to Jurisdiction......................95
Section 9.09. Counterparts...................................................96
Section 9.10. WAIVER OF JURY TRIAL...........................................96
Commitment Schedule
Pricing Schedule
Schedule 1.01(a) - Material Trademarks
Schedule 1.01(b) - Debt That May Be Refinanced
Schedule 1.01(c) - Existing Standby Letters of Credit
Schedule 5.06 - Existing Capital Leases
Schedule 5.20(b) - Real Property To Be Mortgaged
Exhibit A - Form of Note
Exhibit B - Form of Swingline Note
Exhibit C - Form of Money Market Quote Request
Exhibit D - Form of Invitation for Money Market Quotes
Exhibit E - Form of Money Market Quote
Exhibit F - Form of Security Agreement
Exhibit G - Form of Pledge Agreement
Exhibit H - Form of Guarantee Agreement
Exhibit I - Form of Assignment and Assumption Agreement
Exhibit J - Form of Notice of Committed Borrowing
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 9, 1997 and amended
and restated as of March 19, 1999 among VENATOR GROUP, INC. (formerly known as
Woolworth Corporation), the BANKS party hereto, the CO-AGENTS party hereto, BANK
OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, as Documentation Agent, THE
BANK OF NEW YORK, as Administrative Agent, LC Agent and Swingline Bank, and the
LEAD ARRANGERS party hereto.
WHEREAS, the Borrower, the banks party thereto (the "Existing Banks"), the
co-agents party thereto, Bank of America National Trust & Savings Association,
as Documentation Agent and The Bank of New York, as Administrative Agent, LC
Agent and Swingline Bank, and the Lead Arrangers party thereto are parties to a
Credit Agreement dated as of April 9, 1997 (as in effect immediately prior to
the effectiveness of this Amended Agreement (as defined in Section 1.01 below),
the "Existing Credit Agreement");
WHEREAS, the parties to the Existing Credit Agreement desire to amend and
restate the Existing Credit Agreement as provided in this Amended Agreement
subject to the terms and conditions set forth in Amendment No. 3 to the Existing
Credit Agreement dated as of March 19, 1999 ("Amendment No. 3") among the
Borrower, the Existing Banks, Bank of America National Trust & Savings
Association, as Documentation Agent and The Bank of New York, as Administrative
Agent, LC Agent and Swingline Bank;
WHEREAS, all the conditions to effectiveness to Amendment No. 3 have been
satisfied;
NOW, THEREFORE, the Existing Credit Agreement is amended and restated in
its entirety as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes setting
forth Money Market Absolute Rates pursuant to Section 2.03.
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"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Administrative Agent" means The Bank of New York, in its capacity as
administrative agent for the Banks under the Loan Documents, and its successors
in such capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means, (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Borrower (a "Controlling Person") or (ii)
any Person (other than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote 10% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agents" means the LC Agent, the Documentation Agent and the Administrative
Agent.
"Aggregate LC Exposure" means, at any time, the sum, without duplication,
of (i) the aggregate amount that is (or may thereafter become) available for
drawing under all Letters of Credit outstanding at such time plus (ii) the
aggregate unpaid amount of all Reimbursement Obligations outstanding at such
time.
"Agreement", when used in reference to this Agreement, means the Amended
Agreement, as it may be further amended or amended and restated from time to
time.
"Amended Agreement" means this Amended and Restated Credit Agreement dated
as of April 9, 1997 and amended and restated as of March 19, 1999.
"Amendment No. 3 " has the meaning set forth in the second WHEREAS clause.
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"Annual Rent Expense" means, as of the end of each Fiscal Year (the
"Relevant Fiscal Year") and the end of each of the first three Fiscal Quarters
of the next Fiscal Year, the total rent expense (net of sublease income) of the
Borrower and its Consolidated Subsidiaries for the Relevant Fiscal Year,
calculated in the same manner as the $693,000,000 amount shown as such total
rent expense (net of sublease income) for Fiscal Year 1995 under the heading
"Leases" on page 29 of the Borrower's 1995 Annual Report to its shareholders,
subject to the provisions of Section 1.02(b).
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Asset Sale" means any sale, lease or other disposition (including any such
transaction effected by way of merger or consolidation) of any asset by the
Borrower or any of its Subsidiaries, including without limitation any
sale-leaseback transaction, whether or not involving a capital lease, and any
sale of any interest in real estate (including without limitation a leasehold
interest), including without limitation any disposition of a leasehold interest
to the relevant landlord by way of early termination thereof, but excluding (i)
dispositions of inventory, cash, cash equivalents and other cash management
investments and obsolete, unused or unnecessary equipment, in each case in the
ordinary course of business, (ii) dispositions of assets to the Borrower or a
Subsidiary; provided that any such dispositions by an Obligor to a Subsidiary
that is not a Subsidiary Guarantor shall be excluded pursuant to this clause
(ii) only if consummated in the ordinary course of business, (iii) dispositions
of any Real Property Held For Sale, but only if disposed of on or prior to its
Final Disposition Date, and (iv) any disposition of assets not described in
clauses (i) through (iii) hereof consummated in any Fiscal Year, but only to the
extent that the Net Cash Proceeds therefrom, together with the Net Cash Proceeds
of all other dispositions consummated in such Fiscal Year and not constituting
an "Asset Sale" by reliance on this clause (iv), do not exceed $5,000,000 (or,
in the case of Fiscal Year 2002, $2,500,000).
"Assignee" has the meaning set forth in Section 9.06.
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors. The term "Bank" does not include the Swingline Bank in its capacity
as such.
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"Bank of America" means Bank of America National Trust & Savings
Association.
"Bank Parties" means the Banks, the Swingline Bank, the Agents and the Lead
Arrangers.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"Base Rate Loan' means a Committed Loan which bears interest at the Base
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Article 8.
"Base Rate Margin" has the meaning set forth in Section 2.07(a).
"Borrower" means Venator Group, Inc. (formerly known as Woolworth
Corporation), a New York corporation, and its successors.
"Borrower's 1997 Form 10-K" means the Borrower's annual report on Form 10-K
for the1997 Fiscal Year, as filed with the SEC pursuant to the Exchange Act.
"Borrower's Latest 10-Q" means the Borrower's quarterly report on Form 10-Q
for the Fiscal Quarter ended October 31, 1998, as filed with the SEC pursuant to
the Exchange Act.
"Borrowing" has the meaning set forth in Section 1.03.
"Business Acquisition" means (i) an Investment by the Borrower or any of
its Subsidiaries in any other Person (including an Investment by way of
acquisition of securities of any other Person) pursuant to which such Person
shall become a Subsidiary or shall be merged into or consolidated with the
Borrower or any of its Subsidiaries or (ii) an acquisition by the Borrower or
any of its Subsidiaries of the property and assets of any Person (other than the
Borrower or any of its Subsidiaries) that constitute substantially all the
assets of such Person or any division or other business unit of such Person. The
description of any transaction as falling within the above definition does not
affect any limitation on such transaction imposed by Article 5 of this
Agreement.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
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"CD Loan" means a Committed Loan which bears interest at a CD Rate pursuant
to the applicable Notice of Committed Borrowing or Notice of Interest Rate
Election.
"CD Margin" has the meaning set forth in Section 2.07(b).
"CD Rate" means a rate of interest determined pursuant to Section 2.07(b)
on the basis of an Adjusted CD Rate.
"CD Reference Banks" means The Bank of New York, Bank of America and
Xxxxxx.
"Co-Agents" means the Banks designated as Co-Agents on the signature pages
hereof, in their respective capacities as Co-Agents in connection with the
credit facility provided hereunder.
"Collateral" means the collateral purported to be subject to the Liens of
all the Collateral Documents.
"Collateral Documents" means the Security Agreement, the Pledge Agreement,
each mortgage entered into pursuant to Section 5.20(b) and any additional
security agreements, pledge agreements, mortgages or other agreements required
to be delivered pursuant to the Loan Documents to secure the obligations of the
Obligors under the Loan Documents (including without limitation any additional
pledge agreements delivered by any Obligor pursuant to the provisions of the
Pledge Agreement), and any instruments of assignment or other instruments or
agreements executed pursuant to the foregoing.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the Commitment Schedule (or, in the case of an
Assignee, the portion of the transferor Bank's Commitment assigned to such
Assignee pursuant to Section 9.06(c)), in each case as such amount may be
reduced from time to time pursuant to Sections 2.10 and 2.11 or changed as a
result of an assignment pursuant to Section 8.06 or 9.06(c). The term
"Commitment" does not include the Swingline Commitment.
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Committed Loan" means a loan made or to be made by a Bank pursuant to
Section 2.01 or Section 2.18(f); provided that, if any such loan or loans (or
portions thereof) are combined or subdivided pursuant to a Notice of Interest
Rate Election, the term "Committed Loan" shall refer to the combined principal
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amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.
"Consolidated Capital Expenditures" means, for any period, the gross
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Consolidated Subsidiaries for such period, as the same are or
would be set forth in the cash flow statement of the Borrower and its
Consolidated Subsidiaries for such period (if such statement were prepared for
such period), but excluding any such expenditures constituting a Business
Acquisition permitted pursuant to Section 5.14 to the extent that the
consideration paid by the Borrower and its Subsidiaries with respect thereto
consists solely of common stock of the Borrower.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date in accordance with generally accepted accounting principles.
"Consolidated Tangible Net Worth" means at any date the consolidated
shareholders' equity of the Borrower and its Consolidated Subsidiaries as of
such date less their consolidated goodwill as of such date, adjusted to exclude
the effect of any changes in the cumulative foreign currency translation
adjustments.
"Continuing Director" means at any date a member of the Borrower's board of
directors who was either (i) a member of such board twelve months prior to such
date or (ii) nominated for election to such board by at least two-thirds of the
Continuing Directors then in office.
"Credit Exposure" means, as to any Bank at any time:
(i) the amount of its Commitment (whether used or unused) at such
time; or
(ii) if the Commitments have terminated in their entirety, the sum of
(x) its Outstanding Committed Amount and (y) the aggregate outstanding
principal amount of its Money Market Loans,
all determined at such time after giving effect to any prior assignments by or
to such Bank pursuant to Section 8.06 or 9.06.
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"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.06 and the definition of Material
Debt, all contingent obligations) of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, and (vii) all
Guarantees by such Person of Debt of another Person (each such Guarantee to
constitute Debt in an amount equal to the maximum amount of such other Person's
Debt Guaranteed thereby).
"Debt Incurrence" means the incurrence or issuance of any Debt by the
Borrower or any of its Subsidiaries other than (i) the Loans, the Swingline
Loans and the Reimbursement Obligations, (ii) other Debt of the Borrower
incurred under bank loan facilities and letter of credit facilities for the
purpose of financing working capital and capital expenditures, (iii) Debt
secured by a Lien permitted by Section 5.06(a)(ii), (iv) Debt owed to the
Borrower or any Subsidiary, (v) Debt of any Subsidiary permitted by Section 5.09
and (vi) Debt of the Borrower not described in any of the foregoing clauses but
only to the extent the Net Cash Proceeds from the incurrence or issuance
thereof, in the aggregate, do not exceed $5,000,000.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Documentation Agent" means Bank of America National Trust & Savings
Association in its capacity as documentation agent for the credit facility
provided hereunder.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close; provided that, when used in Section 2.17 with respect to any action to
be taken by or with respect to the LC Agent, the term "Domestic Business Day"
shall not include any day on which commercial banks are authorized by law to
close in the jurisdiction where the LC Office of the LC Agent is located.
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"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on the
one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section 2.07(b).
"EBIT" means, for any period, the sum of (i) the consolidated net income of
the Borrower and its Consolidated Subsidiaries for such period plus (ii) to the
extent deducted in determining such consolidated net income, the sum of (A)
Interest Expense, (B) income taxes, (C) the after-tax effect of any
extraordinary non-cash losses (or minus the after-tax effect of any
extraordinary non-cash gains), (D) the before-tax effect of any non-recurring
non-cash losses that are not classified as extraordinary losses (or minus the
before-tax effect of any non- recurring non-cash gains that are not classified
as extraordinary gains) and (E) any pre-tax loss (or minus any pre-tax gain) on
the sale of any ownership or leasehold interest in real property, subject to the
provisions of Section 1.02(b).
"EBITDA" means, for any period, (i) EBIT for such period plus (ii) to the
extent deducted in determining consolidated net income for such period,
depreciation and amortization.
"Effective Date" has the meaning set forth in Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, injunctions, permits, licenses and agreements relating to the protection
of the environment, to the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, hazardous or
toxic substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous or toxic substances
or wastes or the clean-up or other remediation thereof.
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"Equity Issuance" means any issuance of equity securities, or any sale or
other transfer of treasury stock, by the Borrower or any of its Subsidiaries,
other than (i) equity securities issued to, or treasury stock sold or
transferred to, the Borrower or any of its Subsidiaries, (ii) common stock of
the Borrower issued as consideration for a Business Acquisition permitted
pursuant to Section 5.14 and (iii) equity securities of the Borrower issued
pursuant to employee stock plans in an aggregate amount not to exceed
$5,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under subsection (b), (c), (m) or
(o) of Section 414 of the Internal Revenue Code.
"Escrow Account" has the meaning set forth in Section 5.17(b).
"Escrow Agent" has the meaning set forth in Section 5.17(b).
"Escrow Agreement" has the meaning set forth in Section 5.17(b).
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.07(c) on the basis of an Adjusted London Interbank Offered Rate.
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"Euro-Dollar Reference Banks" means the principal London offices of The
Bank of New York, Bank of America and Xxxxxx.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
'Existing Standby Letters of Credit" means the standby letters of credit
listed on Schedule 1.01(c).
"Extension of Credit" means the making of a Loan or a Swingline Loan or the
issuance or extension of a Letter of Credit.
"Facility Fee Rate" has the meaning set forth in Section 2.09.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The Bank of New York on such day on such
transactions as determined by the Administrative Agent.
"Final Disposition Date" means, with respect to any Real Property Held For
Sale, the date identified as such by the Borrower to the Banks prior to the
Effective Date with respect to such Real Property Held For Sale.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower. A Fiscal Year is
identified by the calendar year which includes approximately eleven months of
such Fiscal Year (e.g., Fiscal Year 1998 refers to the Fiscal Year that ended on
January 30, 1999).
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"Fixed Charge Coverage Ratio" means, at the last day of any Fiscal Quarter,
the ratio of (i) the sum of EBIT plus 1/3 of Annual Rent Expense, in each case
for the four consecutive Fiscal Quarters then ended to (ii) the sum of Interest
Expense plus 1/3 of Annual Rent Expense, in each case for the same four
consecutive Fiscal Quarters.
"Fixed Rate Loan" means any loan except a Loan that bears interest at the
Base Rate.
"Foreign Subsidiary" means any Subsidiary organized under the laws of a
jurisdiction, and conducting substantially all its operations, outside the
United States.
"Group of Loans" or "Group" means at any time a group of Committed Loans
consisting of (i) all Committed Loans which are Base Rate Loans at such time,
(ii) all Euro-Dollar Loans having the same Interest Period at such time or (iii)
all CD Loans having the same Interest Period at such time; provided that if a
Committed Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Section 8.02 or 8.05, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it had
not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit, in either
case in the ordinary course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Guarantee Agreement" means the Guarantee Agreement dated as of the
Effective Date among the initial Subsidiary Guarantors and the Administrative
Agent, substantially in the form of Exhibit H, as amended from time to time.
"Immaterial Subsidiary" means at any time any Subsidiary that (i) does not
hold any material patents, trademarks or other intellectual property, (ii) on a
17
consolidated basis, together with its Subsidiaries, holds assets with an
aggregate fair market value of less than $2,000,000, (iii) on a consolidated
basis, together with its Subsidiaries, does not account for more than 1% of the
consolidated revenues of the Borrower and its Consolidated Subsidiaries and (iv)
on a consolidated basis, together with its Subsidiaries, does not have
consolidated net income in excess of $500,000. The determinations in clauses
(ii), (iii) and (iv) shall be made on the basis of the financial statements most
recently delivered by the Borrower to the Banks pursuant to Sections 5.01(a) or
5.01(b), as the case may be. The parties hereto acknowledge and agree that each
of the trademarks listed on Schedule 1.01(a) is a material trademark.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Indenture" means the Indenture dated as of October 10, 1991 between the
Borrower and The Bank of New York, as Trustee, as in effect on the Effective
Date.
"Interest Expense" means, for any period, the consolidated interest expense
(net of interest income) of the Borrower and its Consolidated Subsidiaries for
such period, calculated in the same manner as the amounts shown as "interest
expense, net" under the heading "Interest expense" on page F-4 of the Borrower's
1997 Form 10-K, subject to the provisions of Section 1.02(b).
"Interest Period" means: (1) with respect to each Euro-Dollar Loan, a
period commencing on the date of borrowing specified in the applicable Notice of
Committed Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar 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, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
18
2) with respect to each CD Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Committed Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and ending 30, 60,
90 or 180 days thereafter, as the Borrower may elect in the applicable notice;
provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and (b) any Interest Period which would otherwise
end after the Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date such Loan is made and ending such whole number of months thereafter as the
Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar 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, subject to clause (c) below, end on the last Euro-Dollar Business
Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date such Loan is made and ending such number of days thereafter (but not
less than 14 days) as the Borrower may elect in accordance with Section 2.03;
provided that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
19
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, time deposit, Guarantee or otherwise.
"Invitation for Money Market Quotes" means an Invitation for Money Market
Quotes substantially in the form of Exhibit D hereto.
"LC Agent" means The Bank of New York in its capacities as letter of credit
agent in connection with the letter of credit facility provided hereunder and as
the issuer of the letters of credit issued or to be issued hereunder, and its
successors in such capacities; provided that, for purposes of Section 2.17 only,
when used to refer to the issuer of the Existing Standby Letter of Credit in the
face amount of $250,000 issued by KeyBank National Association, and its
successors in such capacity.
"LC Collateral Account" has the meaning set forth in the Security
Agreement; provided that, at any time prior to the execution of the Security
Agreement, "LC Collateral Account" shall mean a collateral account established
pursuant to arrangements satisfactory to the LC Agent and the Administrative
Agent.
"LC Exposure" means, with respect to any Bank at any time, an amount equal
to its Pro Rata Share of the Aggregate LC Exposure at such time.
"LC Fee Rate" has the meaning set forth in the Pricing Schedule.
"LC Indemnitees" has the meaning set forth in Section 2.17(m).
"LC Office" means, with respect to the LC Agent, for any Letter of Credit,
the office at which the LC Agent books such Letter of Credit.
"Lead Arrangers" means X.X. Xxxxxx Securities Inc., BNY Capital Markets,
Inc. and NationsBank Xxxxxxxxxx Securities LLC in their respective capacities as
lead arrangers for the credit facility provided hereunder.
"Letter of Credit" means a letter of credit issued or to be issued
hereunder by the LC Agent, and any Existing Standby Letter of Credit.
20
"LIBOR Auction" means a solicitation of Money Market Quotes setting forth
Money Market Margins based on the London Interbank Offered Rate pursuant to
Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of the Loan Documents, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset. The issuance of trade letters of credit for
the account of the Borrower or any of its Subsidiaries to finance the purchase
of inventory whereby title documents to the related goods are consigned to the
order of the letter of credit issuer shall not be considered to create a "Lien"
on inventory for the purposes of the Loan Documents. In addition, the parties
hereto acknowledge and agree that precautionary UCC-1 filings made with respect
to obligations of the Borrower or any of its Subsidiaries under operating leases
do not constitute a "Lien".
"Loan" means a Committed Loan or a Money Market Loan and "Loans" means
Committed Loans or Money Market Loans or any combination of the foregoing. The
term "Loan" does not include a Swingline Loan.
"Loan Documents" means this Agreement, the Guarantee Agreement, the
Collateral Documents, the Notes and the Swingline Note.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received in connection with one or more related events by the Borrower or any of
its Subsidiaries under any Property Insurance Policy or (ii) any award or other
cash compensation with respect to any one or more related condemnations of
property (or any transfer or disposition of property in lieu of condemnation)
received by the Borrower or any of its Subsidiaries if, in the case of either
clause (i) or (ii), the amount of such aggregate insurance proceeds or award or
other cash compensation exceeds $500,000.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of any Obligor to perform
any payment obligation of such Obligor under the Loan Documents or (iii) the
ability of any Bank Party to enforce any rights or remedies under the Loan
Documents with respect to the Collateral or any payment obligation of any
Obligor under the Loan Documents.
21
"Material Debt" means Debt (other than the Loans, Swingline Loans and
Reimbursement Obligations) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $5,000,000.
"Material Plan" means at any time a Plan (or any two or more Plans, each of
which has Unfunded Liabilities) having aggregate Unfunded Liabilities in excess
of $5,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to be made by a Bank
pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic Lending
Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Administrative Agent; provided that any Bank may from time to time by
notice to the Borrower and the Administrative Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan made or to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the rate
applicable to Base Rate Loans by reason of clause (a) of Section 8.01).
"Money Market Loan" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money Market Loan
in accordance with Section 2.03 substantially in the form of Exhibit E hereto.
22
"Money Market Quote Request" means a Money Market Quote Request
substantially in the form of Exhibit C hereto.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Xxxxxx" means Xxxxxx Guaranty Trust Company of New York.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Cash Proceeds" means:
(i) with respect to any Asset Sale (including for this purpose
any disposition that would be an Asset Sale but for clause (iv) of the
definition of Asset Sale), an amount equal to the cash proceeds
received by the Borrower or any of its Subsidiaries from or in respect
of such Asset Sale (including any cash proceeds received as income or
other proceeds of any noncash proceeds of such Asset Sale or any
amounts described in clause (z) in excess of amounts actually paid
pursuant to post-closing purchase price adjustments), less (w) any
expenses reasonably incurred by such Person in respect of such Asset
Sale, (x) the amount of any Debt secured by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds
thereof (and required to be so discharged by the terms of such Debt),
(y) any taxes actually paid or to be payable by such Person (as
estimated by a senior financial or accounting officer of the Borrower,
giving effect to the overall tax position of the Borrower and its
Subsidiaries) in respect of such Asset Sale and (z) any amounts
constituting post-closing purchase price adjustments in respect of
such Asset Sale, to the extent a reserve has been established with
respect thereto in accordance with GAAP,
(ii) with respect to any Debt Incurrence (including for this
purpose any incurrence or issuance of Debt that would be a Debt
Incurrence but for clause (vi) of the definition of Debt Incurrence),
an amount equal to the cash proceeds received by the Borrower or any
of its Subsidiaries in respect thereof less any customary fees and
commissions and expenses reasonably incurred by them in respect
thereof,
23
(iii) with respect to any Equity Issuance, an amount equal to the
cash proceeds received by the Borrower or any of its Subsidiaries in
respect thereof less any customary fees and commissions and expenses
reasonably incurred by them in respect thereof; and
(iv) with respect to the occurrence of the Refinancing Date, an
amount equal to the amount on deposit in the Escrow Account on such
Date (after giving effect to any withdrawals made therefrom on such
Date the proceeds of which have been applied to repay or repurchase
any 7% Debentures then outstanding).
"New Subordinated Debt" means any Debt of the Borrower described in clauses
(i) or (ii) of the definition of Debt and incurred after the Effective Date
which (i) has a final maturity no earlier than December 31, 2002, (ii) requires
no scheduled principal payments thereof prior to December 31, 2002, (iii) is not
Guaranteed by any Person other than a Subsidiary Guarantor, (iv) is subordinated
(and the Guarantees of which are subordinated) to the obligations of the
Borrower (and any applicable Subsidiary Guarantor) under the Loan Documents on
customary capital market terms approved by the bank affiliate of each Lead
Arranger and (v) permits (and the Guarantees of which permit) the Borrower (and
any applicable Subsidiary Guarantor) to create, incur, assume or suffer to exist
Liens securing the obligations of the Obligors under the Loan Documents upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
without any restrictions (including without limitation any requirement to
equally and ratably secure any such Debt (or Guarantee thereof)).
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing or a Notice of
Money Market Borrowing.
"Notice of Committed Borrowing" has the meaning set forth in Section 2.02.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.08.
24
"Notice of Money Market Borrowing" has the meaning set forth in Section
2.03(f).
"Notice of Swingline Borrowing" has the meaning set forth in Section
2.18(b).
"Obligor" means the Borrower or any Subsidiary Guarantor, and "Obligors"
means all of them.
"Other Refinancing" means any issuance for cash proceeds by the Borrower of
Other Refinancing Debt or New Subordinated Debt, but solely to the extent the
cash proceeds thereof are applied contemporaneously by the Borrower to refinance
the Debt set forth on Schedule 1.01(b).
"Other Refinancing Debt" means any Debt of the Borrower described in
clauses (i) or (ii) of the definition of Debt and incurred after the Effective
Date which (i) has a final maturity no earlier than December 31, 2002, (ii)
requires no scheduled principal payments thereof prior to December 31, 2002,
(iii) is not Guaranteed by any Person and (iv) permits the Borrower to create,
incur, assume or suffer to exist Liens securing the obligations of the Obligors
under the Loan Documents upon any of its property, assets or revenues, whether
now owned or hereafter acquired, without any restrictions (including without
limitation any requirement to equally and ratably secure any such Debt).
"Outstanding Committed Amount" means, with respect to any Bank at any time,
the sum of (i) the aggregate outstanding principal amount of its Committed
Loans, (ii) its Pro Rata Share of the aggregate outstanding principal amount of
the Swingline Loans (if any) and (iii) its LC Exposure, all determined at such
time after giving effect to any prior assignments by or to such Bank pursuant to
Section 8.06 or 9.06(c).
"Parent" means, with respect to any Bank Party, any Person controlling such
Bank Party.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
25
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge Agreement" means the Pledge Agreement to be entered into among the
Obligors and the Administrative Agent, substantially in the form of Exhibit G,
as amended from time to time, pursuant to which (and to additional foreign
pledge agreements referred to therein) each Obligor party thereto shall pledge
the capital stock of each Subsidiary held by such Obligor, subject to the
exceptions and limitations set forth therein.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means a rate of interest per annum equal to the rate of
interest publicly announced from time to time in New York City by The Bank of
New York as its prime commercial lending rate, such rate to be adjusted
automatically (without notice) on the effective date of any change in such
publicly announced rate.
"Pro Rata Share" means, with respect to any Bank at any time, a fraction
the numerator of which is the amount of such Bank's Commitment at such time (or,
if the Commitments have terminated in their entirety, such Bank's Commitment as
in effect immediately prior to such termination) and the denominator of which is
the Total Commitments at such time (or, if the Commitments have terminated in
their entirety, Total Commitments as in effect immediately prior to such
termination).
"Property Insurance Policy" means any insurance policy maintained by the
Borrower or any of its Subsidiaries covering losses with respect to tangible
real or personal property or improvements, but excluding coverage for losses
from business interruption.
"Real Property Held For Sale" means each ownership interest in real
property held by the Borrower or any Subsidiary and identified by the Borrower
to the Banks prior to the Effective Date.
"Reduction Event" means (i) any Asset Sale, (ii) any Debt Incurrence (other
than a 7% Debentures Refinancing or an Other Refinancing), (iii) any Equity
Issuance, (iv) the receipt by the Borrower or any Subsidiary of Major Casualty
Proceeds or (v) the occurrence of the Refinancing Date; provided that an event
described in clause (iv) hereof shall not give rise to a Reduction Event (x) so
long as at the time of receipt of the relevant Major Casualty Proceeds, no
Default has occurred and is continuing and (y) to the extent that (1) within ten
26
Domestic Business Days after receipt of such Major Casualty Proceeds, the
Borrower shall have delivered to the Administrative Agent the certificate
referred to in Section 5.01(g)(x) with respect thereto, (2) within 90 days after
receipt of such Major Casualty Proceeds, the Borrower shall have delivered to
the Administrative Agent the certificate referred to in Section 5.01(g)(y) with
respect thereto and (3) within 270 days after receipt of such Major Casualty
Proceeds, the Borrower shall have actually expended such Major Casualty Proceeds
to purchase or repair property, plant and equipment so that the Reduction Event,
if any, occurring pursuant to clause (iv) hereof by reason of the receipt of
such Major Casualty Proceeds shall be deemed to occur on (A) the tenth Domestic
Business Day following receipt thereof, as to the amount thereof, if no
certificate with respect thereto has been delivered by the Borrower to the
Administrative Agent pursuant to Section 5.01(g)(x), (B) the 90th day following
receipt thereof, as to the amount thereof not committed to be expended for the
purchase or repair of property, plant and equipment in the certificate with
respect thereto delivered by the Borrower to the Administrative Agent pursuant
to Section 5.01(g)(y), or if no such certificate has been so delivered by such
time and (C) the 270th day following receipt thereof, as to the amount thereof
not so expended on or prior to such day. The description of any transaction as
falling within the above definition does not affect any limitation on such
transaction imposed by Article 5 of this Agreement.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "Reference Bank" means any one of such
Reference Banks.
"Refinancing Date" means the first date on which no 7% Debentures are
outstanding.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reimbursement Obligation" means any obligation of the Borrower to
reimburse the LC Agent pursuant to Section 2.17 for amounts paid by the LC Agent
in respect of drawings under Letters of Credit, including any portion of any
such obligation to which a Bank has become subrogated pursuant to paragraph (1)
of Section 2.17(j).
27
"Requesting Banks" means at any time one or more Banks having at least 15%
of the aggregate amount of the Commitments.
"Required Banks" means at any time Banks having at least 66 2/3% of the
aggregate amount of the Credit Exposures at such time.
"Required Escrow Amount" has the meaning set forth in Section 5.17(b).
"Responsible Officer" means, with respect to the Borrower, its chief
operating officer, its chief financial officer, its general counsel, its
treasurer, any assistant treasurer or any other officer whose duties include the
administration of this Agreement.
"Restricted Payment" means (i) any dividend or other distribution on any
shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock of the same class) or (ii) any payment on account of
the purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other rights to acquire
shares of the Borrower's capital stock (but not including payments of principal,
premium (if any) or interest made pursuant to the terms of convertible debt
securities prior to conversion).
"S&P" means Standard & Poor's Rating Services, a division of the
XxXxxx-Xxxx Companies, Inc., and its successors.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" means the Security Agreement to be entered into among
the Obligors and the Administrative Agent, substantially in the form of Exhibit
F, as amended from time to time.
"7% Debentures" means the 7% Notes due June 1, 2000 in the aggregate
principal amount of $200,000,000 issued by the Borrower pursuant to the
Indenture.
"7% Debentures Refinancing" means any issuance for cash proceeds by the
Borrower of any New Subordinated Debt, but only to the extent that the Net Cash
Proceeds thereof (i) together with the Net Cash Proceeds of any prior issuances
of New Subordinated Debt that constitute a 7% Debentures Refinancing, do not
exceed $200,000,000 and (ii) are applied by the Borrower to repay or repurchase
the 7% Debentures or are deposited in the Escrow Account in accordance with the
provisions of Section 5.17(b).
28
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Subsidiary that from time to time is a
party to the Guarantee Agreement.
"Swingline Bank" means The Bank of New York, in its capacity as the
Swingline Bank under the swingline facility described in Section 2.18, and its
successors in such capacity.
"Swingline Commitment means the obligation of the Swingline Bank to make
Swingline Loans to the Borrower in an aggregate principal amount at any one time
outstanding not to exceed the lesser of (i) $40,000,000 and (y) 10% of the Total
Commitments at such time.
"Swingline Loan" means a loan made by the Swingline Bank pursuant to
Section 2.18(a).
"Swingline Loan Availability Period" means the period from and including
the Effective Date to but excluding the Swingline Maturity Date.
"Swingline Maturity Date" means the day that is 30 days before the
Termination Date.
"Swingline Note" means a promissory note of the Borrower, substantially in
the form of Exhibit B hereto, evidencing the obligation of the Borrower to repay
the Swingline Loans.
"Target Date" means the first date on which (i) the Loans to the Borrower
are expressly rated at least BBB- by S&P and at least Baa3 by Moody's and (ii)
the Total Commitments do not exceed $350,000,000.
"Temporary Cash Investment" means any Investment in (i) direct obligations
of the United States or any agency thereof or obligations guaranteed by the
United States or any agency thereof, (ii) commercial paper rated at least A- 1
by S&P and at least P-1 by Moody's, (iii) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any Bank or any bank or trust company which is organized or licensed under the
laws of the United States or any State thereof and has capital, surplus and
undivided profits aggregating at least $1,000,000,000, (iv) repurchase
agreements with respect to securities described in clause (i) above entered into
29
with an office of a bank or trust company meeting the criteria specified in
clause (iii) above or (v) in the case of Investments made by a Foreign
Subsidiary, Investments substantially similar to those described in clauses (i)
through (iv) and denominated in the local currency of the jurisdiction in which
such Foreign Subsidiary conducts its operations; provided in each case that such
Investment matures within one year after it is acquired by the Borrower or a
Subsidiary.
"Termination Date" means April 9, 2002, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day.
"Total Commitments" means, at any time, the aggregate amount of the
Commitments (whether used or unused) at such time.
"Total Usage" means, at any time, the sum of (i) the aggregate outstanding
principal amount of all Loans and Swingline Loans and (ii) the Aggregate LC
Exposure, all determined at such time.
"UCP" means the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, as the same
may be revised or amended from time to time.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including the States
thereof and the District of Columbia, but excluding its territories and
possessions.
Section 1.02. Accounting Terms and Determinations. (a) Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any provision hereof to eliminate the effect
of any change in generally accepted accounting principles on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the
Required Banks wish to amend any provision hereof for such purpose), then such
30
provision shall be applied on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such provision is amended in a manner satisfactory to the Borrower
and the Required Banks.
(b) For purposes of determining compliance with the provisions of Sections
5.08 on any date prior to January 29, 2000, "EBIT" for the relevant period shall
be "EBIT" for the period from and including January 31, 1999 to and including
the then most recently ended Fiscal Quarter, annualized on a simple arithmetic
basis. For purposes of determining compliance with the provisions of Sections
5.10 on the last day of any Fiscal Quarter ended prior to January 29, 2000,
"EBIT" and "Interest Expense" for the relevant period shall be "EBIT" or
"Interest Expense", as the case may be, for the period from and including
January 31, 1999 to and including the last day of such Fiscal Quarter, and
"Annual Rent Expense" shall be $136,250,000 (for purposes of determining
compliance on the last day of the first Fiscal Quarter 1999), $272,500,000 (for
purposes of determining compliance on the last day of the second Fiscal Quarter
1999) and $408,750,000 (for purposes of determining compliance on the last day
of the third Fiscal Quarter 1999), which amounts constitute the total rent
expense (net of sublease income) of the Borrower and its Consolidated
Subsidiaries for the Fiscal Year 1998 included in the projections of financial
performance of the Borrower set forth in the $500,000,000 Senior Credit Facility
Amendment Confidential Information Memorandum dated February, 1999 multiplied by
1/4, 1/2 and 3/4, respectively.
Section 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on the same date, all of which Loans are of the same type (subject to
Article 8) and, except in the case of Base Rate Loans, have the same Interest
Period or initial Interest Period. Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.01 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.03 in which the Bank participants are determined on the basis of their bids).
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ARTICLE 2
The Credits
Section 2.01. Commitments to Lend. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time on and after the Effective Date and
prior to the Termination Date; provided that, immediately after each such loan
is made (and after giving effect to any substantially concurrent application of
the proceeds thereof to repay outstanding Loans and Swingline Loans):
(i) such Bank's Outstanding Committed Amount shall not exceed its
Commitment; and
(ii) the Total Usage shall not exceed the Total Commitments.
Each Borrowing under this Section shall be in an aggregate principal amount of
$15,000,000 or any larger multiple of $1,000,000; provided that (x) any such
Borrowing may be in an aggregate amount equal to the aggregate unused amount of
the Commitments and (y) if such Borrowing is made on the Swingline Maturity
Date, such Borrowing may be in the aggregate amount of the Swingline Loans
outstanding on such date. Each such Borrowing shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits and subject to Section 2.11, the Borrower may borrow under this
Section, prepay Loans to the extent permitted by Section 2.13, and reborrow
under this Section at any time prior to the Termination Date.
Section 2.02. Notice of Committed Borrowing. (a) The Borrower shall give
the Administrative Agent a notice substantially in the form of Exhibit J (a
"Notice of Committed Borrowing") not later than 11:00 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the second Domestic Business
Day before each CD Borrowing and (z) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day in
the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
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(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate, a CD Rate or a Euro-Dollar Rate, and
(iv) if such Borrowing is a CD Borrowing or EuroDollar Borrowing, the
duration of the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
Section 2.03. Money Market Borrowings. (a) The Money Market Option. In
addition to Committed Borrowings pursuant to Section 2.01, the Borrower may, as
set forth in this Section, request the Banks to make offers to make Money Market
Loans to the Borrower from time to time on or after the Target Date and prior to
the Termination Date. The Banks may, but shall have no obligation to, make such
offers and the Borrower may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to request offers
to make Money Market Loans under this Section, it shall transmit to the
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request so as to be received no later than 11:00 A.M. (New York City time) on
(x) the fifth Euro-Dollar Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction or (y) the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the Borrower and
the Administrative Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar Business
Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be $15,000,000 or
a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a Money
Market Margin or a Money Market Absolute Rate.
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The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative Agent may agree) of any
other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a Money
Market Quote Request, the Administrative Agent shall send to the Banks by telex
or facsimile transmission an Invitation for Money Market Quotes, which shall
constitute an invitation by the Borrower to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank may
submit a Money Market Quote containing an offer or offers to make Money Market
Loans in response to any Invitation for Money Market Quotes. Each Money Market
Quote must comply with the requirements of this subsection (d) and must be
submitted to the Administrative Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New
York City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the Borrower and
the Administrative Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Administrative
Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Article 3 and
6, any Money Market Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
(A) the proposed date of Borrowing,
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(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater
than or less than the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers were requested
and (z) may be subject to an aggregate limitation as to the principal
amount of Money Market Loans for which offers being made by such
quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money
Market Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit E hereto or
does not specify all of the information required by subsection
(d)(ii);
(B) contains qualifying, conditional or similar language, except
an aggregate limitation permitted by subsection (d)(ii)(B)(z);
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (x) of any Money Market Quote
35
submitted by a Bank that is in accordance with subsection (d) and (y) of any
Money Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New York
City time) on (x) the third Euro-Dollar Business Day prior to the proposed date
of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$15,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be,
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement, and
36
(v) immediately after such Money Market Borrowing is made (and after giving
effect to any substantially concurrent application of the proceeds thereof to
repay outstanding Loans and Swingline Loans), the Total Usage shall not exceed
the Total Commitments.
(g) Allocation by Administrative Agent. If offers are made by two or more
Banks with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Administrative Agent among such Banks as nearly as possible
(in multiples of $1,000,000, as the Administrative Agent may deem appropriate)
in proportion to the aggregate principal amounts of such offers. Determinations
by the Administrative Agent of the amounts of Money Market Loans shall be
conclusive in the absence of manifest error.
Section 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank participating therein shall make available its share of
such Borrowing, in Federal or other funds immediately available in New York
City, to the Administrative Agent at its address referred to in Section 9.01.
Unless the Administrative Agent determines that any applicable condition
specified in Article 3 has not been satisfied (which determination may, in the
case of Section 3.03(c), be based in part on information supplied by the LC
Agent on the date of such Borrowing as to the Aggregate LC Exposure on such
date), the Administrative Agent shall (i) apply the funds so received from the
Banks to repay all Swingline Loans (if any) then outstanding, together with
interest accrued thereon and any other associated expenses, and (ii) make the
remainder of such funds available to the Borrower not later than 2:00 P.M. (New
York City time) at the Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
(b) of this Section 2.04 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
37
Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
Section 2.05. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank for the account of its Applicable
Lending Office in an amount equal to the aggregate unpaid principal amount of
such Bank's Loans at any time.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note, the Administrative Agent shall
forward such Note to such Bank. Each Bank shall record the date and amount of
each Loan made by it and the date and amount of each payment of principal made
by the Borrower with respect thereto, and may, if such Bank so elects in
connection with any transfer or enforcement of its Note, endorse on the schedule
forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that
neither the failure by any Bank to make any such recordation or endorsement, nor
any error therein, shall affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
Section 2.06. Maturity of Loans; Mandatory Prepayments of Loans. (a) Each
Committed Loan shall mature, and the principal amount thereof shall be due and
payable, on the Termination Date.
38
(b) Each Money Market Loan included in any Money Market Borrowing shall
mature and the principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
(c) On each date on which the Commitments are permanently reduced pursuant
to subsection (a), (b) or (c) of Section 2.11, the Borrower shall prepay
outstanding Loans, and shall cash collateralize Letters of Credit (without
duplication, in the case of any reduction of the Commitments pursuant to Section
2.11(c), of any prepayment or cash collateralization made by the Borrower
pursuant to subsection (d)) in such amounts so that, after giving effect to such
prepayments and such cash collateralization, the Total Usage shall not exceed
the Total Commitments as then reduced. In determining Total Usage on any date
for purposes of this subsection (c), Aggregate LC Exposure shall be reduced by
an amount equal to the amount on deposit in the LC Collateral Account on such
day (immediately prior to giving effect to any deposits made therein on such day
pursuant to the immediately preceding sentence).
(d) To the extent the terms of any Debt issued by the Borrower or any of
its Subsidiaries after the Effective Date (including without limitation any New
Subordinated Debt) would otherwise require the prepayment or repurchase (or
offer to repurchase) of such Debt upon receipt by the Borrower or any of its
Subsidiaries of cash proceeds of any Asset Sales (or any disposition of assets
excluded from the definition of Asset Sale pursuant to clauses (i) through (iv)
thereof) or any Major Casualty Proceeds (or any proceeds excluded from the
definition of Major Casualty Proceeds pursuant to clauses (i) or (ii) thereof)
but for the provisions of this subsection (d), upon receipt by the Borrower or
any of its Subsidiaries of such cash proceeds, the Borrower will prepay Loans
and cash collateralize Letters of Credit in an amount equal to the amount that
is necessary in order to excuse the Borrower or any of its Subsidiaries from
prepaying or repurchasing (or offering to repurchase) such Debt.
(e) During each Clean-Down Period there shall be at least fifteen
consecutive days on which the sum of (i) the aggregate outstanding principal
amount of all Committed Loans plus (ii) the aggregate outstanding principal
amount of all Swingline Loans plus (iii) the aggregate amount of Reimbursement
Obligations (excluding, for this purpose, any Reimbursement Obligation that is
not yet overdue pursuant to Section 2.17(i)) does not exceed $50,000,000. The
Borrower will prepay Loans to the extent necessary to comply with the
immediately preceding sentence. For purposes of this subsection (e), "Clean-
Down Period" means each period from and including the first day of the fourth
Fiscal Quarter of each Fiscal Year to and including the last day of such Fiscal
Quarter.
39
(f) The prepayments and the cash collateralization (if applicable) to be
made pursuant to subsections (c), (d) and (e) shall be effected as follows:
first, the Borrower shall prepay any Swingline Loans then outstanding, until all
Swingline Loans have been paid in full, second, the Borrower shall prepay any
Committed Loans then outstanding, until all Committed Loans have been paid in
full, third, the Borrower shall deposit immediately available funds in the LC
Collateral Account, until an amount equal to the then Aggregate LC Exposure has
been deposited in the LC Collateral Account and fourth, the Borrower shall
prepay any Money Market Loans then outstanding (in the order in which they were
made), until all Money Market Loans have been paid in full. The Borrower shall
give the Agent at least three Euro-Dollar Business Days' notice of each
prepayment required to be made pursuant to this subsection (f).
Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due or is converted, at a rate per annum equal to
the Base Rate plus the Base Rate Margin, in each case for such day. Subject to
Section 2.06, such interest shall be payable for each calendar month in arrears
on the last Domestic Business Day thereof and, with respect to the principal
amount of any Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on
the date such principal amount is so converted. Any overdue principal of or
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to such Base Rate Loan for such day.
"Base Rate Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
(b) Each CD Loan shall bear interest on the outstanding principal amount
thereof, for each day during each Interest Period applicable thereto, at a rate
per annum equal to the sum of the CD Margin for such day plus the Adjusted CD
Rate applicable to such Interest Period; provided that if any CD Loan or any
portion thereof shall, as a result of clause (2)(b) of the definition of
Interest Period, have an Interest Period of less than 30 days, such portion
shall bear interest for each day during such Interest Period at the rate
applicable to Base Rate Loans for such day. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, 90 days after the first day thereof. Any overdue principal
of or interest on any CD Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the higher of (i)
the sum of the CD Margin for such day plus the Adjusted CD Rate applicable to
such Loan immediately before such payment became due and (ii) the rate
applicable to Base Rate Loans for such day.
40
The "CD Margin" means a rate per annum determined in accordance with the
Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
* The amount in brackets being rounded upward, if necessary, to the next higher
1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing rates
per annum bid at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the purchase at face
value from each CD Reference Bank of its certificates of deposit in an amount
comparable to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to such
Interest Period.
"Domestic Reserve Percentage" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York City having a maturity
comparable to the related Interest Period and in an amount of $100,000 or more.
The Adjusted CD Rate shall be adjusted automatically on and as of the effective
date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
adequately capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R.
327.4(a) (or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United States. The
Adjusted CD Rate shall be adjusted automatically on and as of the effective date
of any change in the Assessment Rate.
41
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus
the Adjusted London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, three months after the
first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Euro-Dollar Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
42
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such day plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/100 of
1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar Business Days, then
for such other period of time not longer than three months as the Administrative
Agent may select) deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Euro-Dollar Reference Banks are offered to
such Euro-Dollar Reference Bank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the Euro-Dollar
Reserve Percentage (or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the
Base Rate for such day) and (ii) the sum of 2% plus the Euro-Dollar Margin for
such day plus the Adjusted London Interbank Offered Rate applicable to such Loan
immediately before such payment became due.
(e) Subject to Section 8.01, each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with Section
2.07(c) as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted by the
Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 2%
plus the rate applicable to Base Rate Loans for such day.
43
(f) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
Section 2.08. Method of Electing Interest Rates. (a) The Loans included in
each Committed Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of subsection (d) below and Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to convert
such Loans to Base Rate Loans or Euro-Dollar Loans or elect to continue
such Loans as CD Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable to
such Loans; or
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or CD Loans or elect to continue such
Loans as Euro-Dollar Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable to
such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Administrative Agent at least three Euro-Dollar Business
Days before the conversion or continuation selected in such notice is to be
effective (unless the relevant Loans are to be converted from Domestic Loans to
Domestic Loans of the other type or continued as Domestic Loans of the same
44
type for an additional Interest Period, in which case such notice shall be
delivered to the Administrative Agent at least three Domestic Business Days
before such conversion or continuation is to be effective). A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such notice applies, and the remaining portion to which it does not
apply, are each $15,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
type of Loans and, if such new Loans are CD Loans or Euro-Dollar Loans, the
duration of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Administrative Agent shall promptly notify
each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower. If the Borrower fails to deliver a timely Notice of
Interest Rate Election to the Administrative Agent for any Group of CD Loans or
Euro-Dollar Loans, such Loans shall be converted into Base Rate Loans on the
last day of the then current Interest Period applicable thereto.
(d) The Borrower shall not be entitled to elect to convert any Committed
Loans to, or continue any Committed Loans for an additional Interest Period as,
CD Loans or Euro-Dollar Loans if a Default shall have occurred and be continuing
when the Borrower delivers notice of such election to the Administrative Agent
or when such conversion or continuation would otherwise be effective.
45
Section 2.09. Facility Fees. The Borrower shall pay to the Administrative
Agent for the account of each Bank a facility fee, calculated for each day at
the Facility Fee Rate for such day, on the amount of such Bank's Credit Exposure
on such day. Such facility fees shall accrue for each day from and including the
Effective Date to but excluding the day on which the Credit Exposures are
reduced to zero and shall be payable quarterly in arrears on each September 19,
December 19, March 19 and June 19 and on the day on which the Credit Exposures
are reduced to zero.
"Facility Fee Rate" means a rate per annum determined daily in accordance
with the Pricing Schedule.
Section 2.10. Optional Termination or Reduction of Commitments. (a) The
Borrower may, without premium or penalty, upon at least three Domestic Business
Days' notice to the Administrative Agent, (i) terminate the Commitments at any
time, if no Bank has an Outstanding Committed Amount at such time or (ii)
ratably reduce the Commitments from time to time, in each case by an aggregate
amount of at least $15,000,000; provided that immediately after such reduction:
(x) no Bank's Outstanding Committed Amount shall exceed its Commitment
as so reduced;
(y) the Total Usage shall not exceed the Total Commitments; and;
(y) the aggregate outstanding principal amount of the Swingline Loans
shall not exceed the Swingline Commitment (after giving effect to any
reduction thereof pursuant to Section 2.11(d)).
Upon any such termination or reduction of the Commitments, the Administrative
Agent shall promptly notify each Bank of such termination or reduction.
(b) The Borrower may, upon at least three Domestic Business Day' notice to
the Administrative Agent, terminate the Swingline Commitment at any time, if no
Swingline Loans are outstanding at such time.
(c) If the Borrower wishes to replace this Agreement with another credit
agreement at any time, the Borrower may, on the date when such other credit
agreement becomes effective, terminate the Commitments hereunder and prepay any
and all Committed Loans and Swingline Loans then outstanding hereunder; provided
that:
46
(i) the Borrower notifies each Bank as to the possibility of such
termination and such prepayment (if any) at least three Euro-Dollar
Business Days prior thereto;
(ii) the Borrower gives definitive notice of such termination and such
prepayment (if any) to the Administrative Agent before 10:00 A.M. (New York
City time) on the date of such termination;
(iii) all Committed Loans, Swingline Loans and Reimbursement
Obligations outstanding on the date of such termination (together with
accrued interest thereon) are paid in full on such date;
(iv) in connection with any prepayment of Committed Loans or Swingline
Loans on such date, the Borrower complies with the requirements of
subsections (a) and (b) of Section 2.13, Section 2.15 and subsection (d) of
Section 2.18 in all respects except the timing of definitive notice of such
prepayment; and
(v) no Letter of Credit issued hereunder remains outstanding after the
date of such termination unless the LC Agent shall have agreed to allow
such Letter of Credit to remain outstanding after the Commitments (and the
Banks' participations in such Letter of Credit) terminate.
Section 2.11. Mandatory Reduction of Commitments. (a) On February 15, 2000,
the Commitments will be reduced to $300,000,000.
(b) On the fifth Euro-Dollar Business Day after the date on which the
Borrower or any of its Subsidiaries receives any Net Cash Proceeds in respect of
any Reduction Event, the Total Commitments shall be permanently reduced by an
amount equal to such Net Cash Proceeds, until the Total Commitments do not
exceed $350,000,000; provided that if the Net Cash Proceeds in respect of any
Reduction Event is less than $5,000,000, no such permanent reduction shall be
required until the Net Cash Proceeds with respect to such Reduction Event,
together with the Net Cash Proceeds with respect to all other Reduction Events
in respect of which no permanent reduction under this subsection (b) shall have
theretofore been made, is equal to at least $5,000,000.
47
(c) To the extent the terms of any Debt issued by the Borrower or any of
its Subsidiaries after the Effective Date (including without limitation any New
Subordinated Debt) would otherwise require the prepayment or repurchase (or
offer to repurchase) of such Debt upon receipt by the Borrower or any of its
Subsidiaries of cash proceeds of any Asset Sale (or any disposition of assets
excluded from the definition of Asset Sale pursuant to clauses (i) through (iv)
thereof) or any Major Casualty Proceeds (or any proceeds excluded from the
definition of Major Casualty Proceeds pursuant to clauses (i) or (ii) thereof)
but for the provisions of this subsection (c), upon receipt by the Borrower or
any of its Subsidiaries of such cash proceeds, the Commitments shall be
permanently reduced by an amount equal to the amount that is necessary in order
to excuse the Borrower or any of its Subsidiaries from prepaying or repurchasing
(or offering to repurchase) such Debt.
(d) On any date on which the Commitments are reduced pursuant to Section
2.11, the Swingline Commitment will be reduced by such amount as shall be
necessary so that, after giving effect to such reduction, the Swingline
Commitment shall not exceed 10% of the Total Commitments as so reduced.
Section 2.12. Mandatory Termination of Commitments. (a) The Commitments
shall terminate on the Termination Date and any Committed Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.
(b) The Swingline Commitment shall terminate on the Swingline Maturity Date
and any Swingline Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
Section 2.13. Optional and Mandatory Prepayments. (a) The Borrower may upon
at least one Domestic Business Day's notice to the Administrative Agent, prepay
the Base Rate Loans (or any Money Market Borrowing bearing interest at the Base
Rate by reason of clause (a) of Section 8.01) in whole at any time, or from time
to time in part in amounts aggregating $10,000,000 or any larger multiple of
$1,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Base Rate Loans of the several Banks (or the
Money Market Loans included in such Money Market Borrowing).
(b) Subject to Section 2.15, the Borrower may, upon at least two Domestic
Business Days' notice to the Administrative Agent, in the case of a Group of CD
Loans or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent, in the case of a Group of Euro-Dollar Loans, prepay the
Loans comprising such a Group, in whole at any time, or from time to time in
part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000, by
paying the principal amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such Group.
48
(c) In connection with any substitution of Banks pursuant to Section 8.06,
the Borrower may prepay the Loans of the Bank being replaced, as provided in
clause (ii) of Section 8.06.
(d) Except as provided in Sections 2.06 and 2.13(a), the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.
(e) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
Section 2.14. General Provisions as to Payments. (a) The Borrower shall
make (i) each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.01 and (ii) each
payment of Reimbursement Obligations and any other amounts payable in connection
with the Letters of Credit in accordance with the provisions of Section 2.17.
The Administrative Agent will promptly distribute to each Bank its ratable share
of each such payment received by the Administrative Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Domestic Loans
or Swingline Loans or of fees or of Reimbursement Obligations shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, any Euro-Dollar Loans or Money Market LIBOR Loan
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or interest on, any Money
Market Absolute Rate Loan shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any payment of principal or
any Reimbursement Obligation is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
49
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
Section 2.15. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any such Loan is converted to a
Base Rate Loan (pursuant to Article 2, 6 or 8 or otherwise) on any day other
than the last day of an Interest Period applicable thereto, or the last day of
an applicable period fixed pursuant to Section 2.07(d), or if the Borrower fails
to borrow or prepay any Fixed Rate Loans or fails to continue any CD Loan or
Euro- Dollar Loans for an additional Interest Period or fails to convert any
outstanding Loans to CD Loans or Euro-Dollar Loans, in each case after notice of
such borrowing, prepayment, continuation or conversion has been given to any
Bank in accordance with Section 2.04(a), 2.06(f), 2.08(c) or 2.13(e), the
Borrower shall reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred by it (or by an existing or prospective Participant in
the related Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding
loss of margin for the period after any such payment or conversion or failure to
borrow, prepay, continue or convert, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest error.
Section 2.16. Computation of Interest and Fees. Interest based on the Prime
Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year) and paid for the actual number of days elapsed (including the
first day but excluding the last day). All other interest and facility fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
50
Section 2.17. Letters of Credit.
(a) Issuance of Letters of Credit. The LC Agent agrees, on the terms and
conditions set forth in this Agreement, to issue Letters of Credit for the
account of the Borrower from time to time during the period from and including
the Effective Date to but excluding the date that is 30 days before the
Termination Date; provided that, immediately after each such Letter of Credit is
issued:
(i) the Aggregate LC Exposure shall not exceed $160,000,000 (of which
the aggregate amount attributable to standby Letters of Credit will not
exceed $60,000,000);
(ii) in the case of each Bank, its Outstanding Committed Amount shall
not exceed its Commitment; and
(iii) the Total Usage shall not exceed the Total Commitments.
Upon the issuance by the LC Agent of each Letter of Credit pursuant to this
subsection (a), the LC Agent shall be deemed, without further action by any
party hereto, to have sold to each Bank and each Bank shall be deemed, without
further action by any party hereto, to have purchased from the LC Agent, a
participation in such Letter of Credit, on the terms set forth in this Section,
equal to such Bank's Pro Rata Share thereof. In addition, on the Effective Date,
the LC Agent shall be deemed, without further action by any party hereto, to
have sold to each Bank, and each Bank shall be deemed, without further action by
any party hereto, to have purchased from the LC Agent, a participation in each
Existing Standby Letter of Credit, on the terms set forth in this Section, equal
to such Bank's Pro Rata Share thereof.
(b) Expiry Dates. No Letter of Credit shall have an expiry date later than
the fifth Domestic Business Day prior to the Termination Date. Subject to the
preceding sentence:
(i) each Letter of Credit shall, when issued, have an expiry date on
or before the first anniversary of the date on which it is issued; and
(ii) the expiry date of any Letter of Credit may, at the request of
the Borrower, be extended from time to time for a period not exceeding one
year so long as the LC Agent agrees to so extend such Letter of Credit (or,
in the case of an "evergreen" Letter of Credit, its right to give a notice
to prevent the extension thereof expires) no earlier than three months
before the then existing expiry date thereof.
51
(c) Notice of Proposed Issuance. The Borrower shall give the LC Agent and
the Administrative Agent at least one Domestic Business Day's prior notice
specifying the date each Letter of Credit is to be issued and describing the
proposed terms of such Letter of Credit and the nature of the transactions
proposed to be supported thereby.
(d) Conditions to Issuance. The LC Agent shall not issue any Letter of
Credit unless: (i) such Letter of Credit shall be satisfactory in form and
reasonably satisfactory in substance to the LC Agent,
(ii) the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as the LC
Agent shall have reasonably requested,
(iii) the LC Agent shall have determined (based on information
supplied by the Administrative Agent on the date of such issuance as to the
amounts specified in subsection (a) of this Section other than the
Aggregate LC Exposure) that the limitations specified in subsection (a) of
this Section will not be exceeded immediately after such Letter of Credit
is issued, and
(iv) the LC Agent shall not have been notified in writing by the
Borrower, the Administrative Agent or the Required Banks that any condition
specified in clause (c), (d) or (e) of Section-3.03 is not satisfied on the
date such Letter of Credit is to be issued.
(e) Notice of Proposed Extensions of Expiry Dates. The LC Agent shall give
the Administrative Agent at least one Domestic Business Day's notice prior to
extending the expiry date of any Letter of Credit (or, in the case of an
"evergreen" Letter of Credit, allowing it to be extended), specifying (i) the
date on which such extension is to be made and (ii) the date to which such
expiry date is to be so extended. The LC Agent shall not extend (or allow the
extension of) the expiry date of such Letter of Credit if it shall have been
notified by the Borrower or the Administrative Agent (at the request of the
Required Banks) that any condition specified in clause (d) or (e) of Section
3.03 is not satisfied on the date of such extension (or, in the case of an
"evergreen" Letter of Credit, the day when the LC Agent's right to give a notice
preventing such extension expires).
52
(f) Notice of Actual Issuances, Extensions and Amounts Available for
Drawing. Promptly upon issuing any Letter of Credit or extending the expiry date
of any Letter of Credit (or allowing the expiry date of any "evergreen" Letter
of Credit to be extended), the LC Agent will notify the Administrative Agent of
the date of such Letter of Credit, the amount thereof, the beneficiary or
beneficiaries thereof and the expiry date or extended expiry date thereof.
Within three Domestic Business Days after the end of each calendar month, the LC
Agent shall notify the Administrative Agent and each Bank of (i) the daily
average aggregate amount available for drawings (whether or not conditions for
drawing thereunder have been satisfied) under all Letters of Credit outstanding
during such month, (ii) the aggregate amount of letter of credit fees accrued
during such month pursuant to subsection (g) of this Section, (iii) each Bank's
Pro Rata Share of such accrued letter of credit fees and (iv) the aggregate
undrawn amount of all Letters of Credit outstanding at the end of such month.
(g) Fees. The Borrower shall pay to the LC Agent, for the account of the
Banks ratably in accordance with their respective Pro Rata Shares, a letter of
credit fee for each day at the LC Fee Rate on the aggregate amount available for
drawings (whether or not conditions for drawing thereunder have been satisfied)
under all Letters of Credit outstanding on such day. Such letter of credit fee
shall be payable quarterly in arrears on the last Domestic Business Day of each
calendar quarter and on the fifth Domestic Business Day before the Termination
Date (or any earlier date on which the Commitments shall have terminated in
their entirety and no Letters of Credit are outstanding). Promptly upon
receiving any payment of such fee, the LC Agent will distribute to each Bank its
Pro Rata Share thereof. In addition, the Borrower shall pay to the LC Agent for
its own account fronting fees and reasonable expenses in the amounts and at the
times agreed between the Borrower and the LC Agent.
(h) Drawings. Upon receipt from the beneficiary of any Letter of Credit of
a demand for payment under such Letter of Credit, the LC Agent shall determine
in accordance with the terms of such Letter of Credit whether such demand for
payment should be honored. If the LC Agent determines that any such demand for
payment should be honored, the LC Agent shall make available to such beneficiary
in accordance with the terms of such Letter of Credit the amount of the drawing
under such Letter of Credit. The LC Agent shall thereupon notify the Borrower of
the amount of such drawing paid by it.
(i) Reimbursement and Other Payments by the Borrower. (1) If any amount is
drawn under any Letter of Credit, the Borrower irrevocably and unconditionally
agrees to reimburse the LC Agent for all amounts paid by the LC Agent upon such
drawing, together with any and all reasonable charges and expenses which the LC
Agent may pay or incur relative to such drawing and interest on the amount drawn
at the Federal Funds Rate for each day from and including the date such amount
53
is drawn to but excluding the date such reimbursement payment is due and
payable. Such reimbursement payment shall be due and payable (x) at or before
1:00 P.M. (New York City time) on the date the LC Agent notifies the Borrower of
such drawing, if such notice is given at or before 10:00 A.M. (New York City
time) on such date, or (y) at or before 10:00 A.M. (New York City time) on the
first Domestic Business Day after the date such notice is given, if such notice
is given after 10:00 A.M. (New York City time) on such date; provided that no
payment otherwise required by this sentence to be made by the Borrower at or
before 1:00 P.M. (New York City time) on any day shall be overdue hereunder if
arrangements for such payment satisfactory to the LC Agent, in its reasonable
discretion, shall have been made by the Borrower at or before 1:00 P.M. (New
York City time) on such day and such payment is actually made at or before 3:00
P.M. (New York City time) on such day.
(2) In addition, the Borrower agrees to pay to the LC Agent interest on any
and all amounts not paid by the Borrower when due hereunder with respect to a
Letter of Credit, for each day from and including the date when such amount
becomes due to but excluding the date such amount is paid in full, whether
before or after judgment, payable on demand, at a rate per annum equal to the
sum of 2% plus rate applicable to Base Rate Loans for such day.
(3) Each payment to be made by the Borrower pursuant to this subsection (i)
shall be made to the LC Agent in Federal or other funds immediately available to
it at its address referred to in Section 9.01.
(j) Payments by Banks with Respect to Letters of Credit. (1) If the
Borrower fails to reimburse the LC Agent as and when required by subsection (i)
above for all or any portion of any amount drawn under a Letter of Credit, the
LC Agent may notify each Bank of such unreimbursed amount and request that each
Bank reimburse the LC Agent for such Bank's Pro Rata Share thereof. Upon
receiving such notice from the LC Agent, each Bank shall make available to the
LC Agent, at its address referred to in Section 9.01, an amount equal to such
Bank's share of such unreimbursed amount as set forth in such notice, in Federal
or other funds immediately available to the LC Agent, by 3:00 P.M. (New York
City time) on the Domestic Business Day following such Bank's receipt of such
notice from the LC Agent, together with interest on such amount for each day
from and including the date of such drawing to but excluding the day such
payment is due from such Bank at the Federal Funds Rate for such day. Upon
payment in full thereof, such Bank shall be subrogated to the rights of the LC
Agent against the Borrower to the extent of such Bank's Pro Rata Share of the
54
related Reimbursement Obligation (including interest accrued thereon). Nothing
in this subsection (j) shall affect any rights any Bank may have against the LC
Agent for any action or omission for which the LC Agent is not indemnified under
subsection (n) of this Section.
(2) If any Bank fails to pay any amount required to be paid by it pursuant
to clause (1) of this subsection (j) on the date on which such payment is due,
interest shall accrue on such Bank's obligation to make such payment, for each
day from and including the date such payment became due to but excluding the
date such Bank makes such payment, whether before or after judgment, at a rate
per annum equal to the Federal Funds Rate for such day. Any payment made by any
Bank after 3:00 P.M. (New York City time) on any Domestic Business Day shall be
deemed for purposes of the preceding sentence to have been made on the next
succeeding Domestic Business Day.
(3) If the Borrower shall reimburse the LC Agent for any drawing with
respect to which any Bank shall have made funds available to the LC Agent in
accordance with clause (1) of this subsection (j), the LC Agent shall promptly
upon receipt of such reimbursement distribute to such Bank its Pro Rata Share
thereof, including interest, to the extent received by the LC Agent.
(k) Exculpatory Provisions. The Borrower's obligations under this
Section shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the LC Agent, any Bank, the beneficiary of
any Letter of Credit or any other Person. The Borrower assumes all risks of the
acts or omissions of any beneficiary of any Letter of Credit with respect to its
use of such Letter of Credit. None of the LC Agent, the Banks and their
respective officers, directors, employees and agents shall be responsible for,
and the obligations of each Bank to make payments to the LC Agent and of the
Borrower to reimburse the LC Agent for drawings pursuant to this Section (other
than obligations resulting solely from the gross negligence or willful
misconduct of the LC Agent) shall not be excused or affected by, among other
things, (i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (ii) the
validity, sufficiency or genuineness of documents presented under any Letter of
Credit or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged
(and notwithstanding any assertion to such effect by the Borrower); (iii)
payment by the LC Agent against presentation of documents to it which do not
comply with the terms of the relevant Letter of Credit; (iv) any dispute between
or among the Borrower, any of its Subsidiaries, the beneficiary of any Letter of
Credit or any other Person or any claims or defenses whatsoever of the Borrower,
any of its Subsidiaries or any other Person against the beneficiary of any
Letter of Credit; (v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; (vi) any breach of this
Agreement by any party hereto (except, in the case of the LC Agent, a breach
resulting solely from its gross negligence or willful misconduct); (vii) any
other circumstance or happening whatsoever, whether or not similar to any of the
foregoing; (viii) the fact that a Default shall have occurred and be continuing;
or (ix) the fact that the Termination Date shall have passed or the Commitments
shall have terminated. The LC Agent shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
55
advice, however transmitted, in connection with any Letter of Credit. Any action
taken or omitted by the LC Agent or any Bank under or in connection with any
Letter of Credit and the related drafts and documents, if done without willful
misconduct or gross negligence, shall be binding upon the Borrower and shall not
place the LC Agent or any Bank under any liability to the Borrower.
(l) Reliance, Etc. The LC Agent shall be entitled (but not obligated) to
rely, and shall be fully protected in relying, on the representation and
warranty by the Borrower set forth in the last sentence of Section 3.03 to
establish whether the conditions specified in clauses (c), (d) and (e) of
Section 3.03 are met in connection with any issuance or extension of a Letter of
Credit, unless the LC Agent shall have been notified to the contrary by the
Administrative Agent or the Required Banks (in which event the LC Agent shall be
fully protected in relying on such notice). The rights and obligations of the LC
Agent under each Letter of Credit issued by it shall be governed by the
provisions thereof and the provisions of the UCP and/or the Uniform Commercial
Code referred to therein or otherwise applicable thereto.
(m) Indemnification by the Borrower. The Borrower agrees to indemnify and
hold harmless each Bank and the LC Agent (collectively, the "LC Indemnitees")
from and against any and all claims and damages, losses, liabilities, costs or
expenses (including, without limitation, the reasonable fees and disbursements
of counsel) which any such LC Indemnitee may reasonably incur (or which may be
claimed against any such LC Indemnitee by any Person whatsoever) by reason of or
in connection with the execution and delivery or transfer of or payment or
failure to pay under any Letter of Credit or any actual or proposed use of any
Letter of Credit, including any claims, damages, losses, liabilities, costs or
expenses which the LC Agent may incur by reason of or in connection with the
failure of any Bank to fulfill or comply with its obligations to the LC Agent
hereunder; provided that the Borrower shall not be required to indemnify the LC
Agent for any claims, damages, losses, liabilities, costs or expenses to the
56
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Agent in determining whether a request presented under any
Letter of Credit issued by it complied with the terms of such Letter of Credit
or (ii) the LC Agent's failure to pay under any Letter of Credit issued by it
after the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit (unless such payment is enjoined or
otherwise prevented by order of a court or other governmental authority).
Nothing in this subsection (m) is intended to change the obligations of the
Borrower under any other provision of this Section.
(n) Indemnification by the Banks. The Banks shall, ratably in accordance
with their respective Pro Rata Shares, indemnify the LC Agent, its affiliates
and their respective directors, officers, agents and employees (to the extent
not reimbursed by the Borrower) against any cost, expense (including fees and
disbursements of counsel), claim, demand, action, loss or liability (except such
as result from the LC Agent's gross negligence or willful misconduct or the LC
Agent's failure to pay, unless such payment is enjoined or otherwise prevented
by order of a court or other governmental authority, under any Letter of Credit
issued by it after the presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit) that any such indemnitee may
suffer or incur in connection with this Agreement or any action taken or omitted
by such indemnitee under this Agreement.
(o) Dual Capacities. In its capacity as a Bank, the LC Agent shall have the
same rights and obligations under this Section as any other Bank.
Section 2.18. Swingline Loans. (a) Swingline Commitment. The Swingline Bank
agrees, on the terms and conditions set forth in this Agreement, to make loans
to the Borrower pursuant to this Section from time to time during the Swingline
Loan Availability Period; provided that immediately after each such loan is made
(and after giving effect to any substantially concurrent application of the
proceeds thereof to repay outstanding Loans):
(i) the aggregate outstanding principal amount of the Swingline Loans
shall not exceed the Swingline Commitment,
(ii) in the case of each Bank, its Outstanding Committed Amount shall
not exceed its Commitment, and
(iii) the Total Usage shall not exceed the Total Commitments.
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Each loan under this Section shall (x) be in a principal amount not less than
$500,000 and shall be in a multiple of $100,000 and (y) bear interest on the
outstanding principal amount thereof for each day from the date such loan is
made until it becomes due at such rate or rates per annum (which shall in no
event be greater than the rate applicable to Base Rate Loans for such day), and
be payable on such dates, as shall be agreed upon from time to time by the
Borrower and the Swingline Bank. Within the foregoing limits and subject to
Section 2.11(d), the Borrower may borrow under this Section, repay Swingline
Loans and reborrow under this Section at any time during the Swingline Loan
Availability Period. If the Swingline Bank and the Borrower are unable, for any
reason, to agree on the interest rate or interest payment date or dates
applicable to any Swingline Loan, the Swingline Bank shall not be obligated to
make, and the Borrower shall not be obligated to borrow, such Swingline Loan.
The Swingline Loans shall be evidenced by the Swingline Note.
(b) Notice of Swingline Borrowing. The Borrower shall give the Swingline
Bank notice (a "Notice of Swingline Borrowing") not later than 2:00 P.M. (New
York City time) on the date of each borrowing of a Swingline Loan, specifying
(i) the date of such borrowing, which shall be a Domestic Business Day, and (ii)
the principal amount of such Swingline Loan.
(c) Funding of Swingline Loans. Not later than 3:00 P.M. (New York City
time) on the date of each borrowing of a Swingline Loan, the Swingline Bank
shall, unless the Swingline Bank determines that any applicable condition
specified in Article 3 (which determination may, in the case of Section 3.03(c),
be based in part on information supplied by the LC Agent on the date of such
borrowing as to the Aggregate LC Exposure on such date and on information
supplied by the Administrative Agent as to the aggregate outstanding principal
amount of the Loans on such date) has not been satisfied, make available the
amount of such Swingline Loan, in Federal or other funds immediately available
in New York City, to the Borrower at the Swingline Bank's address referred to in
Section 9.01.
(d) Optional Prepayment of Swingline Loans. The Borrower may prepay the
Swingline Loans in whole at any time, or from time to time in part in a
principal amount of at least $500,000, by giving notice of such prepayment to
the Swingline Bank not later than 2:00 P.M. (New York City time) on the date of
prepayment and paying the principal amount to be prepaid (together with (i)
interest accrued thereon to the date of prepayment and (ii) the loss or expense
(if any) resulting from such prepayment which is incurred by the Swingline Bank
(or by an existing or prospective participant in the Swingline Loans) and
documented by the Swingline Bank) to the Swingline Bank at its address referred
to in Section 9.01, in Federal or other funds immediately available in New York
City, not later than 3:00 P.M. on the date of prepayment.
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(e) Mandatory Prepayment of Swingline Loans. (i) On the date of each
Borrowing pursuant to Section 2.01 or 2.03, the Borrower shall prepay all
Swingline Loans then outstanding, together with (x) interest accrued thereon to
the date of prepayment and (y) the loss or expense (if any) resulting from such
prepayment which is incurred by the Swingline Bank (or by an existing or
prospective participant in the Swingline Loans) and documented by the Swingline
Bank.
(ii) On each date on which the Swingline Commitment is reduced pursuant to
Section 2.11(d), the Borrower shall prepay outstanding Swingline Loans in such
amounts such that, after giving effect to such prepayments, the aggregate
outstanding principal amount of the Swingline Loans will not exceed the
Swingline Commitment as then reduced.
(f) Refunding Unpaid Swingline Loans. The Swingline Bank may at any time,
by notice to the Banks (including the Swingline Bank, in its capacity as a
Bank), require each Bank to pay to the Swingline Bank an amount equal to such
Bank's Pro Rata Share of the aggregate unpaid principal amount of the Swingline
Loans then outstanding. Such notice shall specify the date on which such
payments are to be made, which shall be the first Domestic Business Day after
such notice is given. Not later than 12:00 Noon (New York City time) on the date
so specified, each Bank shall pay the amount so notified to it to the Swingline
Bank at its address referred to in Section 9.01, in Federal or other funds
immediately available in New York City. The amount so paid by each Bank shall
constitute a Base Rate Loan to the Borrower; provided that, if the Banks are
prevented from making such Loans to the Borrower by the provisions of the United
States Bankruptcy Code or otherwise, the amount so paid by each Bank shall
constitute a purchase by it of a participation in the unpaid principal amount of
the Swingline Loans (and interest accruing thereon after the date of such
payment). Each Bank's obligation to make such payment to the Swingline Bank
under this subsection (f) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or any other
Person may have against the Swingline Bank or the Borrower, (ii) the occurrence
or continuance of a Default or the termination of the Commitments, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower or any
other Person, (iv) any breach of this Agreement by the Borrower or any other
Bank or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that no Bank shall be obligated to
make any payment to the Swingline Bank under this subsection (f) with respect to
a Swingline Loan made by the Swingline Bank at a time when the Swingline Bank
has determined that a Default had occurred and was continuing.
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ARTICLE 3
Conditions
Section 3.01. Effective Date. This Amended Agreement shall become effective
on the date (the "Effective Date") on which all of the conditions set forth in
Section 3 of Amendment No. 3 shall have been satisfied. The Administrative Agent
shall promptly notify the Borrower and the Banks of the Effective Date, and such
notice shall be conclusive and binding on all parties hereto.
Section 3.02. Consequences of Effectiveness. (a) On the Effective Date,
without further action by any of the parties thereto, the Existing Credit
Agreement will be automatically amended and restated to read as this Amended
Agreement reads.
(b) Each Loan outstanding under the Existing Credit Agreement on the
Effective Date shall mature as specified in this Amended Agreement. The interest
rates determined in accordance with Section 2.07 of this Amended Agreement shall
be effective on the Effective Date; provided that (i) the interest rate
applicable to each CD Loan outstanding on the Effective Date for each remaining
day during the then current Interest Period applicable thereto shall be the rate
per annum equal to the sum of the CD Margin (as defined in this Amended
Agreement) for such day plus the Adjusted CD Rate applicable to such Loan for
such Interest Period (as determined pursuant to Section 2.07(b) of the Existing
Credit Agreement) and (ii) the interest rate applicable to each Euro-Dollar Loan
outstanding on the Effective Date for each remaining day during the then current
Interest Period applicable thereto shall be the rate per annum equal to the sum
of the Euro-Dollar Margin (as defined in this Amended Agreement) for such day
plus the Adjusted London Interbank Offered Rate applicable to such Loan for such
Interest Period (as determined pursuant to Section 2.07(c) of the Existing
Credit Agreement). Facility fees and letter of credit fees accrued under the
Existing Credit Agreement and unpaid as of the Effective Date will be payable on
the first date on which fees are payable in accordance with Section 2.09.
(c) On and after the Effective Date, the rights and obligations of the
parties hereto shall be governed by the provisions hereof. The rights and
obligations of the parties to the Existing Credit Agreement with respect to the
period before the Effective Date shall continue to be governed by the provisions
thereof as in effect before the Effective Date.
Section 3.03. Extensions of Credit. The obligation (i) of any Bank to make
a Loan on the occasion of any Borrowing (other than a Loan pursuant to Section
2.18(f)), (ii) of the Swingline Bank to make any Swingline Loan and (iii) of the
LC Agent to issue or extend (or allow the extension of) the expiry date of any
Letter of Credit are each subject to the satisfaction of the following
conditions:
(a) the fact that the Effective Date shall have occurred on or prior
to March 19, 1999;
(b) receipt (i) by the Administrative Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, (ii) by the Swingline Bank of a Notice
of Swingline Borrowing as required by Section 2.18(b) or (iii) by the LC
Agent of a notice of proposed issuance or extension as required by Section
2.17(c) or (e), as the case may be;
(c) the fact that, immediately after such Extension of Credit, the
applicable limitations in Section 2.01, 2.03(f), 2.17(a) or 2.18(a), as the
case may be, shall not be exceeded;
(d) the fact that, immediately before and after such Extension of
Credit, no Default shall have occurred and be continuing; and
60
(e) the fact that each of the representations and warranties of the
Obligors contained in the Loan Documents shall be true on and as of the
date of such Extension of Credit.
Each Extension of Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Extension of Credit as to the facts
specified in clauses (c), (d) and (e) of this Section.
ARTICLE 4
Representations and Warranties
The Borrower represents and warrants that:
Section 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of New York, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where failures to possess such licenses,
authorizations, consents and approvals could not, in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of each Loan Document to
which it is a party are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
Section 4.03. Binding Effect. Each Loan Document to which the Borrower is a
party (other than the Notes and the Swingline Note) constitutes a valid and
binding agreement of the Borrower and each of the Notes and the Swingline Note,
when executed and delivered in accordance with this Agreement, will constitute a
valid and binding obligation of the Borrower, in each case enforceable in
accordance with its terms.
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Section 4.04. Financial Statements. (a) The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of January 31, 1998 and the
related consolidated statements of operations, cash flows and shareholders'
equity for the Fiscal Year then ended, reported on by KPMG LLP and set forth in
the Borrower's 1997 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(b) The unaudited condensed consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of October 31, 1998 and the related unaudited
condensed consolidated statements of operations, cash flows and retained
earnings for the nine months then ended, set forth in the Borrower's Latest Form
10-Q, a copy of which has been delivered to each of the Banks, fairly present,
on a basis consistent with the financial statements referred to in subsection
(a) of this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period (subject to normal year-end
adjustments).
(c) Since October 31, 1998 there has been no material adverse change in the
business, financial position, results of operations or prospects of the Borrower
and its Consolidated Subsidiaries, considered as a whole.
Section 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to
result in a Material Adverse Effect.
Section 4.06. Compliance with Laws. The Borrower and its Subsidiaries are
in compliance in all material respects with all applicable laws, ordinances,
rules, regulations and binding requirements of governmental authorities, except
where (i) the necessity of compliance therewith is being contested in good faith
by appropriate proceedings or (ii) failure to comply therewith could not, in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 4.07. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under
62
Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or made any
amendment to any Plan, which has resulted or will result in the imposition of a
Lien under Section 412(n) of the Internal Revenue Code or in the incurrence of a
requirement under Section 401(a)(29) of the Internal Revenue Code to post a bond
or other security in order to retain the tax-qualified status of such Plan or
(iii) incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.
Section 4.08. Environmental Matters. To the knowledge of the Borrower, (i)
the Borrower and its Subsidiaries are in material compliance with all applicable
Environmental Laws, (ii) there are no claims, demands or investigations against
the Borrower or any of its Subsidiaries by any governmental authority or other
person or entity that may reasonably be expected to result in material liability
for the clean up of materials that have been released into the environment and
(iii) there are no conditions that are reasonably likely to result in such
claims, demands or investigations against the Borrower or any of its
Subsidiaries, except for failures to comply and liabilities which, in the
aggregate, are unlikely to result in a Material Adverse Effect.
Section 4.09. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any material assessment received by the Borrower or
any Subsidiary, except taxes and assessments which are not yet delinquent or are
being contested in good faith by appropriate proceedings. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
Section 4.10. Subsidiaries. (a) Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
except where failures to possess such licenses, authorizations, consents and
approvals could not, in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(b) The Subsidiary Guarantors are all of the Subsidiaries of the Borrower
on the Effective Date, other than Foreign Subsidiaries and Immaterial
Subsidiaries.
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Section 4.11. Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 4.12. Full Disclosure. All information (taken as a whole)
heretofore furnished in writing by the Borrower to any Bank for purposes of or
in connection with the Loan Documents or any transaction contemplated thereby
is, and all such information hereafter furnished in writing by the Borrower to
any Bank will be, true in all material respects on the date as of which such
information is stated or certified. Any projections and pro forma financial
information contained in any such writing will be based upon good faith
estimates and assumptions believed by the Borrower to be reasonable at the time
made, it being recognized by the Banks that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
The Borrower has disclosed to the Banks in writing any and all facts which could
reasonably be expected to result in a Material Adverse Effect (to the extent the
Borrower can now reasonably foresee, utilizing reasonable assumptions and the
information now actually known to the Borrower's Responsible Officers).
Section 4.13. Year 2000 Compliance. The Borrower has (i) initiated a review
and assessment of all areas within the business and operations of the Borrower
and each of its Subsidiaries that could reasonably be expected to be materially
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by it or any of its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis and (iii) to date,
implemented such plan substantially in accordance with such timetable. The
Borrower reasonably believes that all computer applications that are material to
the business or operations of the Borrower or any of its Subsidiaries will on a
timely basis be able to perform properly date-sensitive functions for all dates
before and from and after January 1, 2000 (that is, be "Year 2000 Compliant")
except to the extent that a failure to do so could not reasonably be expected to
have a Material Adverse Effect.
Section 4.14. Ranking. The Loans, the Swingline Loans and the Reimbursement
Obligations rank (i) senior to any other Debt of the Borrower with respect to
the Collateral pledged by the Borrower, (ii) pari passu with other unsecured
Debt of the Borrower (other than any such Debt described in clause (iii)) with
respect to any assets of the Borrower (other than the Collateral pledged by the
Borrower) and (iii) senior to any other Debt of the Borrower which by its terms
is subordinated thereto, including without limitation any New Subordinated Debt.
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ARTICLE 5
Covenants
The Borrower agrees that, so long as any Bank has any Credit Exposure
hereunder, the Swingline Commitment remains in effect or any amount payable
under the Swingline Note remains unpaid:
Section 5.01. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after the end of
each Fiscal Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, cash flows and shareholders' equity for
such Fiscal Year, setting forth in each case in comparative form the figures as
of the end of and for the previous Fiscal Year, all reported on (without any
qualification that would not be acceptable to the SEC for purposes of filings
under the Exchange Act) by KPMG LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 45 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, a consolidated
condensed balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such Fiscal Quarter, the related consolidated condensed statement of
operations for such Fiscal Quarter and the related consolidated condensed
statements of operations, cash flows and retained earnings for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in
comparative form (i) in the case of such statement of operations, the figures
for the corresponding Fiscal Quarter of the previous Fiscal Year and (ii) in the
case of such statements of operations, cash flows and retained earnings, the
figures for the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
(c) as soon as available and in any event within 30 days after the end of
each month of each Fiscal Year, a consolidated condensed balance sheet of the
65
Borrower and its Consolidated Subsidiaries as of the end of such month and the
related consolidated condensed statements of operations and cash flows for the
portion of the Fiscal Year ended at the end of such month, all certified
(subject to normal quarter-end and year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
chief financial officer or the chief accounting officer of the Borrower;
(d) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the Borrower's chief
financial officer or chief accounting officer (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.06 to 5.10, inclusive, and
Sections 5.13 to 5.15, inclusive, on the date of such financial statements, (ii)
setting forth (x) if such certificate is being delivered together with each set
of financial statements referred to in clause (a) above, the names of each
Subsidiary of the Borrower that is an Immaterial Subsidiary as of the last day
of the Fiscal Year with respect to which such financial statements relate and
the calculations required to establish that each such Subsidiary is an
Immaterial Subsidiary and (y) if such certificate is being delivered together
with each set of financial statements referred to in clause (b) above for any
Fiscal Quarter of any Fiscal Year, the names of each Subsidiary of the Borrower
that is an Immaterial Subsidiary as of the last day of the Fiscal Quarter with
respect to which such financial statements relate and which was not listed as an
Immaterial Subsidiary on previous certificates delivered by the Borrower
pursuant to this subsection (d) together with financial statements for previous
Fiscal Quarters of such Fiscal Year and the calculations required to establish
that each such Subsidiary is an Immaterial Subsidiary and (iii) stating whether
any Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(e) simultaneously with the delivery of each set of financial statements
referred to in clause (a) above, a statement of the firm of independent public
accountants which reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default existed on the date of
such statements and (ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (d) above;
(f) as soon as practicable and in any event within 45 days after the first
day of each Fiscal Year, operating plans and financial forecasts, including cash
flow projections covering proposed fundings, repayments, additional advances,
investments, capital expenditures and other cash receipts and disbursements, for
such Fiscal Year;
66
(g) (x) within ten Domestic Business Days of receipt of any Major Casualty
Proceeds that would constitute a Reduction Event but for the delivery of a
certificate pursuant to this subsection, a certificate of the Borrower setting
forth the amount of such Major Casualty Proceeds and the transaction giving rise
to them and stating that the Borrower shall notify the Administrative Agent,
within ninety days of receipt of such Major Casualty Proceeds of its
determination as to whether such Major Casualty Proceeds (or any portion
thereof) shall be expended for the purchase or repair of property, plant and
equipment and (y) within 90 days of receipt of any Major Casualty Proceeds with
respect to which the Borrower has delivered to the Administrative Agent a
certificate pursuant to clause (x) of this subsection, a certificate of the
Borrower setting forth the amount of such Major Casualty Proceeds that will be
expended by the Borrower and its Subsidiaries for the purchase or repair of
property, plant and equipment and a reasonably detailed plan of such purchase or
repair;
(h) within ten Domestic Business Days after any Responsible Officer obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the Borrower's chief financial officer or chief accounting officer setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(i) within ten Domestic Business Days after any Responsible Officer obtains
knowledge of the commencement of an action, suit or proceeding against the
Borrower or any Subsidiary before any court or arbitrator or any governmental
body, agency or official which could reasonably be expected to result in a
Material Adverse Effect, or which in any manner draws into question the validity
or enforceability of any Loan Document, a certificate of a Responsible Officer
setting forth the nature of such pending or threatened action, suit or
proceeding and such additional information with respect thereto as may be
reasonably requested by any Bank;
(j) within ten Domestic Business Days after any Responsible Officer
determines that any computer application that is material to the business or
operations of the Borrower or any of its Subsidiaries will fail to be "Year 2000
Compliant" (as defined in Section 4.13) in all material respects and on a timely
basis, a certificate of a Responsible Officer setting forth the details of such
failure, the expected consequences thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(k) within ten Domestic Business Days after any Responsible Officer obtains
knowledge of any actual or proposed material change in any material contract
arrangements between the Borrower or any of its Subsidiaries and any material
vendors or suppliers, a certificate of a Responsible Officer setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
67
(l) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(m) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the SEC;
(n) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" defined in PBGC Regulations
Sections 2615.11(a), .12(a), .14(a), .16(a), .17(a), .21(a), .22(a) or .23(a)
with respect to any Plan, or, with respect to any Plan, gives or is required to
give notice to the PBGC under Section 4043(b)(3) of ERISA or would be required
to give notice under such Section but for the provisions of Section 4043(b)(2)
of ERISA or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC, or that would
be required to be given but for the provisions of Section 4043(b)(2); (ii)
receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment
or contribution to any Plan or Multiemployer Plan or makes any amendment to any
Plan or which has resulted or will result in the imposition of a Lien under
Section 412(n) of the Internal Revenue Code or the incurrence of a requirement
under Section 401(a)(29) of the Internal Revenue Code to post a bond or other
security in order to retain the tax- qualified status of such Plan, a
certificate of the Borrower's chief financial officer or chief accounting
officer setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group has taken or proposes to
take; and
68
(o) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request.
Section 5.02. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all material properties useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary's own name) with
financially sound and responsible insurance companies, insurance on all their
respective properties in at least such amounts and against at least such risks
(and with such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the same or a similar
business; provided that such risks may be covered by self-insurance programs
consistent with past practice. The Borrower will furnish to the Banks, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
Section 5.03. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary to preserve, renew and keep in full force and effect
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business, except
where failures to possess such rights, privileges and franchises could not, in
the aggregate, reasonably be expected to result in a Material Adverse Effect;
provided that nothing in this Section shall prohibit (i) any merger or
consolidation permitted under Section 5.11 or (ii) the termination of the
existence of any Immaterial Subsidiary if the Borrower in good faith determines
that such termination is in the best interests of the Borrower and is not
materially disadvantageous to the Banks.
Section 5.04. Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and binding requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where (i) the necessity of compliance
therewith is being contested in good faith by appropriate proceedings or (ii)
failures to comply therewith could not, in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
69
Section 5.05. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary (except for Subsidiaries that constitute
Immaterial Subsidiaries) to keep, proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and will cause each
Subsidiary (except for Subsidiaries that constitute Immaterial Subsidiaries) to
permit, representatives of any Bank at such Bank's expense, upon reasonable
prior notice, to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants, all at such reasonable
times and as often as may reasonably be desired.
Section 5.06. Negative Pledge. (a) Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except (subject to the last sentence of this
subsection (a)):
(i) Liens existing on the date of this Agreement securing (i) any Debt
described in clause (iv) of the definition of Debt outstanding on the date
of this Agreement in an aggregate principal or face amount not exceeding
$50,000,000 and listed on Schedule 5.06 and (ii) other Debt outstanding on
the date of this Agreement in an aggregate principal or face amount not
exceeding $10,000,000;
(ii) any Lien on any asset (or improvement thereon) securing Debt
(including without limitation any Debt described in clause (iv) of the
definition of Debt) incurred or assumed solely for the purpose of financing
all or any part of the cost of acquiring such asset (or improvement
thereon), provided that (x) such Lien attaches to such asset (or
improvement thereon) concurrently with or within 90 days after the
acquisition thereof and (y) the aggregate principal or face amount of Debt
secured by Liens incurred in reliance on this clause (ii) shall not exceed
$40,000,000;
(iii) any Lien existing on any asset of any corporation at the time
such corporation becomes a Subsidiary and not created in contemplation of
such event;
(iv) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
70
(v) any Lien existing on any asset prior to the acquisition (whether
by purchase, merger or otherwise) thereof by the Borrower or a Subsidiary
and not created in contemplation of such acquisition;
(vi) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased and is
not secured by any additional assets;
(vii) Liens on amounts on deposit in the Escrow Account securing (x)
the obligations of the Borrower under any New Subordinated Debt any portion
of the proceeds of which have been deposited in the Escrow Account and (y)
the payment to the Escrow Agent of amounts payable to it pursuant to the
Escrow Agreement, on the terms permitted by Section 5.17(b);
(viii) (x) Liens not securing Debt and consisting of (i) zoning
restrictions, easements, covenants and other restrictions on the use of any
interest of real property, minor irregularities or defects of title and
similar encumbrances on any interest in real property incurred or suffered
in the ordinary course of business, (y) statutory or contractual Liens of
landlords, Liens of carriers, warehousemen, mechanics and materialmen and
other similar Liens, in each case incurred in the ordinary course of
business for sums not yet due or the payment of which is not delinquent or
which are being contested in good faith by appropriate proceedings and (z)
Liens consisting of a mortgage on Store 1127 located in Miami, Florida and
a mortgage on the Champs office located in Bradenton, Florida, in each case
securing obligations of the Borrower outstanding on the Effective Date;
(ix) Liens (other than Liens described in clause (viii)) arising in
the ordinary course of its business which (x) do not secure Debt, (y) do
not secure any single obligation or series of related obligations in an
amount exceeding $5,000,000 and (z) do not in the aggregate materially
detract from the value of its assets or materially impair the use thereof
in the operation of its business; and
(x) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt of any Subsidiary permitted under Section 5.09;
provided that the aggregate principal or face amount of Debt of all
Subsidiaries secured by Liens incurred in reliance on this clause (x) shall
not exceed $10,000,000.
71
Neither the Borrower nor any Subsidiary will create, assume or suffer to
exist any Lien on any Collateral (or any asset that will constitute "Collateral"
upon execution of the Collateral Documents), except as permitted by the
Collateral Documents or any inventory now owned or hereafter acquired by it,
other than (1) any Lien permitted by subsections (a)(viii) or (a)(ix) and (2)
solely with respect to any Collateral, the Lien created under the Collateral
Document pursuant to which such Collateral is purportedly pledged.
(b) Neither the Borrower nor any of its Subsidiaries will enter into any
agreement with any Person which prohibits or limits the ability of the Borrower
or any Subsidiary to create, incur, assume or suffer to exist any Lien securing
the obligations of the Obligors under the Loan Documents upon any of its
property, assets or revenues, whether now owned or hereafter acquired (any such
agreement, a "Negative Pledge") and which is more restrictive than the Negative
Pledge set forth in the Indenture; provided that nothing in this subsection (b)
shall be construed to prohibit the Borrower or any of its Subsidiaries from
entering in the ordinary course of business into supply contracts, purchase
contracts and leaseholds with respect to real property containing in each case
customary non- assignment provisions.
Section 5.07. Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth will at no time be less than the sum of (i) $940,000,000 plus
(ii) for each Fiscal Quarter ended at or prior to such time (but after January
30, 1999), 50% of the consolidated net income of the Borrower and its
Consolidated Subsidiaries for such Fiscal Quarter (if greater than zero).
Section 5.08. Leverage Ratio. On any date during any period set forth
below, the ratio of (i)(x) Consolidated Debt on such date minus (y) solely if
such date occurs prior to the Refinancing Date, the aggregate amount on deposit
in the Escrow Account on such date to (ii) EBITDA for the period of four
consecutive Fiscal Quarters ended on or most recently prior to such date, shall
not exceed the ratio set forth below opposite such period:
72
Period Maximum
Ratio
--------------------------------------------------------------------------------
From and including January 31, 1999 to but excluding last Not applicable
day of second fiscal quarter 1999
--------------------------------------------------------------------------------
From and including last day of second fiscal quarter 1999 to 7.5:1
but excluding last day of third fiscal quarter 1999
--------------------------------------------------------------------------------
From and including last day of third fiscal quarter 1999 to 5.5:1
but excluding last day of fourth fiscal quarter 1999
--------------------------------------------------------------------------------
From and including last day of fourth fiscal quarter 1999 to 4.0:1
but excluding last day of first fiscal quarter 2000
--------------------------------------------------------------------------------
From and including last day of first fiscal quarter 2000 to 3.5:1
but excluding last day of second fiscal quarter 2000
--------------------------------------------------------------------------------
From and including last day of second fiscal quarter 2000 to 3.25:1
but excluding last day of third fiscal quarter 2000
--------------------------------------------------------------------------------
From and including last day of third fiscal quarter 2000 to 3.00:1
but excluding last day of fourth fiscal quarter 2000
--------------------------------------------------------------------------------
From and including last day of fourth fiscal quarter 2000 to 2.75:1
but excluding last day of first fiscal quarter 2001
--------------------------------------------------------------------------------
From and including last day of first fiscal quarter 2001 to 2.5:1
but excluding last day of second fiscal quarter 2001
--------------------------------------------------------------------------------
From and including last day of second fiscal quarter 2001 to 2.45:1
but excluding last day of third fiscal quarter 2001
--------------------------------------------------------------------------------
From and including last day of third fiscal quarter 2001 to 2.35:1
but excluding last day of fourth fiscal quarter 2001
--------------------------------------------------------------------------------
Thereafter 2.15:1
--------------------------------------------------------------------------------
Section 5.09. Limitation on Debt of Subsidiaries. The total Debt of all
Subsidiaries (excluding (i) Debt owed to the Borrower or to another Subsidiary,
(ii) Debt under the Guarantee Agreement, (iii) Debt of any Subsidiary Guarantor
consisting of a Guarantee of reimbursement obligations of the Borrower under
trade letters of credit (other than any Letter of Credit) which reimbursement
obligations are outstanding no more than one Domestic Business Day, (iv) Debt of
any Subsidiary Guarantor consisting of a Guarantee of New Subordinated Debt,
73
so long as the obligations of such Subsidiary Guarantor under such Guarantee are
subordinated to the obligations of such Subsidiary Guarantor under the Loan
Documents at least to the same extent as the obligations of the Borrower under
such New Subordinated Debt, and (v) Debt of any Subsidiary Guarantor consisting
of a Guarantee of any unsecured Debt of the Borrower outstanding at January 30,
1999 and reflected on the balance sheet of the Borrower at January 30, 1999, so
long as the obligations of such Subsidiary Guarantor under such Guarantee are
subordinated to the obligations of such Subsidiary Guarantor under the Loan
Documents on customary capital markets terms approved by the bank affiliate of
each Lead Arranger) will not at any time exceed $50,000,000.
Section 5.10. Fixed Charge Coverage Ratio. At the end of each Fiscal
Quarter listed below, the Fixed Charge Coverage Ratio will not be less than the
ratio set forth below opposite such Fiscal Quarter:
Fiscal Quarter Minimum Ratio
----------------------------------------------------------------
First Fiscal Quarter 1999 .35:1
----------------------------------------------------------------
Second Fiscal Quarter 1999 .55:1
----------------------------------------------------------------
Third Fiscal Quarter 1999 .75:1
----------------------------------------------------------------
Fourth Fiscal Quarter 1999 1.0:1
----------------------------------------------------------------
First Fiscal Quarter 2000 1.0:1
----------------------------------------------------------------
Second Fiscal Quarter 2000 1.0:1
----------------------------------------------------------------
Third Fiscal Quarter 2000 1.0:1
----------------------------------------------------------------
Fourth Fiscal Quarter 2000 1.3:1
----------------------------------------------------------------
First Fiscal Quarter 2001 1.3:1
----------------------------------------------------------------
Second Fiscal Quarter 2001 1.3:1
----------------------------------------------------------------
Third Fiscal Quarter 2001 1.3:1
----------------------------------------------------------------
Fourth Fiscal Quarter 2001 1.4:1
----------------------------------------------------------------
First Fiscal Quarter 2002 1.4:1
----------------------------------------------------------------
Second Fiscal Quarter 2002 1.4:1
----------------------------------------------------------------
74
Section 5.11. Consolidations, Mergers and Sales of Assets. The Borrower
will not, and will not permit any of its Subsidiaries to, consolidate or merge
with or into any other Person; provided that (i) the Borrower may merge with
another Person if (x) the Borrower is the corporation surviving such merger and
(y) unless such other Person was a Subsidiary Guarantor immediately prior to
giving effect to such merger, immediately after giving effect to such merger no
Default shall have occurred and be continuing and (ii) any Subsidiary may merge
with another Person if (x) a Subsidiary is the survivor to such merger and (y)
if such Subsidiary was a Subsidiary Guarantor immediately prior to giving effect
to such merger, the survivor to such merger is a Subsidiary Guarantor (and, if
the survivor was not a Subsidiary Guarantor immediately prior to giving effect
to such merger and is a Foreign Subsidiary, the Administrative Agent shall have
received evidence reasonably satisfactory to it that the obligations of such
Subsidiary Guarantor under the Guarantee Agreement shall be enforceable in the
jurisdictions in which such Subsidiary Guarantor holds assets and conducts its
operations). The Borrower and its Subsidiaries will not sell, lease or otherwise
transfer, directly or indirectly (1) all or substantially all of the assets of
the Borrower and its Subsidiaries, taken as a whole, to any other Person, (2)
any assets of any Obligor to any Subsidiary that is not a Subsidiary Guarantor,
except in the ordinary course of business or (3) all or any substantial part of
the Foot Locker Business or the Champs Business to any other Person; provided
that the foregoing limitations shall not apply to sales of inventory or sales
and other dispositions of surplus assets, in each case in the ordinary course of
business. For purposes of this Section 5.11, "Foot Locker Business" means the
operations of the Borrower and its Subsidiaries conducted in North America under
the names "Foot Locker", "Lady Foot Locker", "Kids Foot Locker" and "World Foot
Locker" (including the stock of any Subsidiary through which any such operations
are conducted and the tangible and intangible assets held by any such
Subsidiary) and "Champs Business" means the operations of the Borrower and its
Subsidiaries conducted in North America under the name "Champs Sports"
(including the stock of any Subsidiary through which any such operations are
conducted and the tangible and intangible assets held by any such Subsidiary).
Section 5.12. Use of Proceeds. The proceeds of the Loans and the Swingline
Loans made under this Agreement will be used by the Borrower solely to finance
its working capital and, until the Borrower has issued New Subordinated Debt for
gross proceeds of not less than $350,000,000 in the aggregate, to finance
Consolidated Capital Expenditures to the extent permitted under Section 5.13.
Section 5.13. Limitation on Capital Expenditures. (a) Consolidated Capital
Expenditures will not, for any fiscal period set forth below, exceed the amount
set forth below opposite such period:
75
Fiscal Period Maximum Amount
---------------------------------------------------------------
Fiscal Year 1999 $ 175,000,000
---------------------------------------------------------------
Fiscal Year 2000 $ 150,000,000
---------------------------------------------------------------
Fiscal Year 2001 $ 150,000,000
---------------------------------------------------------------
From and including the first day of the $ 75,000,000
first Fiscal Quarter 2002 to and
including the last day of the second
Fiscal Quarter 2002
---------------------------------------------------------------
;provided that to the extent Consolidated Capital Expenditures for any fiscal
period set forth above are less than the amount set forth above opposite such
period, 50% of such unused amount may be carried over to the immediately
succeeding fiscal period (or, in the case of any unused amount for the Fiscal
Year 2001, 25%). Consolidated Capital Expenditures made in any fiscal period
will be allocated first to reduce the amount set forth above opposite such
period, and second, to reduce any amount carried over from the immediately
preceding fiscal period.
(b) In addition to the restrictions set forth in subsection (a),
Consolidated Capital Expenditures will not, for any fiscal period set forth
below, exceed the amount set forth below opposite such period:
---------------------------------------------------------------
Fiscal Period Maximum Amount
---------------------------------------------------------------
From and including the first day of the $114,000,000
first Fiscal Quarter 1999 to and
including the last day of the second
Fiscal Quarter 1999
---------------------------------------------------------------
From and including the first day of the $ 81,000,000
third Fiscal Quarter 1999 to and
including the last day of the fourth
Fiscal Quarter 1999
---------------------------------------------------------------
From and including the first day of the $ 99,00,000
first Fiscal Quarter 2000 to and
including the last day of the second
Fiscal Quarter 2000
---------------------------------------------------------------
From and including the first day of the $ 71,000,000
third Fiscal Quarter 2000 to and
including the last day of the fourth
Fiscal Quarter 2000
---------------------------------------------------------------
From and including the first day of the $ 91,000,000
first Fiscal Quarter 2001 to and
including the last day of the second
Fiscal Quarter 2001
---------------------------------------------------------------
From and including the first day of the $ 71,000,000
third Fiscal Quarter 2001 to and
including the last day of the fourth
Fiscal Quarter 2001
---------------------------------------------------------------
From and including the first day of the $ 56,000,000
first Fiscal Quarter 2002 to and
including the last day of the second
Fiscal Quarter 2002
---------------------------------------------------------------
;provided that to the extent Consolidated Capital Expenditures for any fiscal
period set forth above consisting of the first two Fiscal Quarters of any Fiscal
Year are less than the amount set forth above opposite such period, such unused
amount may be carried over to the immediately succeeding fiscal period.
Consolidated Capital Expenditures made in any fiscal period will be allocated
first to reduce the amount set forth above opposite such period, and second, to
reduce any amount carried over from the immediately preceding fiscal period.
76
Section 5.14. Investments and Business Acquisitions. Neither the Borrower
nor any Subsidiary will hold, make or acquire any Investment in any Person or
make any Business Acquisition other than:
(a) Investments in existence on the Effective Date in an aggregate
amount not to exceed $1,000,000;
(b) (i) any Investment in Persons which are Subsidiaries immediately
prior to the making of such Investment and (ii) any Investment in the
Borrower; provided that any Investment by an Obligor in a Subsidiary that
is not a Subsidiary Guarantor shall be permitted pursuant to this clause
(b) only if consummated in the ordinary course of business;
(c) Temporary Cash Investments (and, solely with respect to any
amounts on deposit in the Escrow Account, such other Investments as shall
be permitted by the terms of the Escrow Agreement); and
(d) any Investment not otherwise permitted by the foregoing clauses of
this Section and any Business Acquisition if (x) the aggregate amount of
any single such Investment or Business Acquisition (or series of related
Investments or Business Acquisitions) does not exceed $10,000,000, (y)
immediately after any such Investment or Business Acquisition is made or
acquired, the aggregate amount (without duplication) of all Investments and
Business Acquisitions made in reliance on this clause (d) does not exceed
$50,000,000 and (z) solely with respect to any Business Acquisition,
immediately after giving effect to such Business Acquisition, (1) the
Borrower would be in pro forma compliance with the covenants set forth in
Sections 5.08, 5.09, 5.10 and 5.13 (calculated giving effect to any Debt to
be incurred or assumed by the Borrower and its Subsidiaries in connection
with such Business Acquisition and assuming that such Business Acquisition
was consummated in the first day of the most recent fiscal period with
respect to which each covenant is calculated) and (2) together with the
delivery of the financial statements pursuant to Section 5.01(c) with
respect to the month in which such Business Acquisition was consummated,
the Borrower shall have delivered to the Administrative Agent a certificate
of a Responsible Officer certifying such pro forma compliance and showing
in reasonable detail the calculation thereof.
Section 5.15. Restricted Payments. Neither the Borrower nor any Subsidiary
will declare or make any Restricted Payment on any date (with respect to any
proposed Restricted Payment, a "Measurement Date") unless (i) such Restricted
Payment is declared or made after the last day of the first Fiscal Quarter of
Fiscal Year 2000, (ii) immediately before and after giving effect thereto, no
Default has occurred and is continuing, (iii) the Fixed Charge Coverage Ratio
for the period of four consecutive Fiscal Quarters most recently ended prior to
the relevant Measurement Date and with respect to which the Borrower has
delivered the financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b), as the case may be, is at least 2.5:1 and (iv) the
aggregate amount of Restricted Payments made by the Borrower since January 29,
2000 does not exceed 20% of the consolidated net income of the Borrower and its
Consolidated Subsidiaries for the period from and including January 29, 2000 to
and including the last day of the Fiscal Quarter most recently ended prior to
the relevant Measurement Date (treated as a single accounting period); provided
that regardless of whether the conditions set forth in clauses (i) through (iv)
are satisfied, the Borrower may make Restricted Payments consisting of (1)
77
repurchases of its common stock pursuant to employee stock plans in an aggregate
amount not to exceed $500,000 in any Fiscal Year and (2) payments in respect of
shareholders rights plans in an aggregate amount not to exceed $1,500,000.
Section 5.16. New Subordinated Debt. (a) The Borrower will not issue any
Debt securities in the capital markets on or after the Effective Date which rank
pari passu with the Loans, the Swingline Loans and the Reimbursement Obligations
(determined without regard to the existence of the Lien on the Collateral
created under the Collateral Documents) until the Borrower will have issued New
Subordinated Debt for gross proceeds of not less than $350,000,000 in the
aggregate.
(b) The Borrower will not, and will not permit any Subsidiary to, enter
into any amendment or waiver of any agreement or instrument governing any New
Subordinated Debt (or any Guarantee thereof) which (i) would increase the
interest rate, shorten the final maturity or the weighted average life, or
change the subordination provisions of such New Subordinated Debt (or Guarantee
thereof) or make any of the covenants or events of default applicable to such
New Subordinated Debt (or Guarantee thereof) more restrictive than the covenants
or events of default applicable under this Agreement or (ii) could otherwise be
reasonably expected to have an adverse effect on the Banks, without in each case
the prior written consent of the Required Banks. The Borrower will not enter
into any amendment or waiver of the Escrow Agreement which (i) would alter the
provisions regarding the deposit, withdrawal, application or investment of
amounts on deposit therein (including without limitation the timing or amount of
any such deposit or withdrawal) or the creation or termination or release of any
Liens on amounts on deposit therein or (ii) could otherwise be reasonably
expected to have an adverse effect on the Banks, without in each case the prior
written consent of the Required Banks.
(c) Neither the Borrower nor any Subsidiary will optionally prepay, redeem,
purchase, acquire or make any other payment in respect of any New Subordinated
Debt other than regularly scheduled payments of interest thereon.
Section 5.17. Refunding of the 7% Debentures; Escrow Arrangements. (a) On
or prior to February 15, 2000, the Borrower shall have repaid or repurchased in
full all outstanding 7% Debentures, together with accrued and unpaid interest
thereon and all other amounts due and payable at such time with respect thereto
(or shall have on deposit in the Escrow Account (as defined below) an amount
equal to the aggregate principal amount of the 7% Debentures then outstanding)
and, should such repayment, repurchase or deposit be made with the proceeds of
any Debt, such Debt shall be New Subordinated Debt.
78
(b) The Borrower shall deposit into an escrow account (the "Escrow
Account") established with a financial institution reasonably acceptable to the
Borrower and the bank affiliate of each Lead Arranger (the "Escrow Agent")
pursuant to an escrow agreement in form and substance reasonably satisfactory to
the bank affiliate of each Lead Arranger (as amended from time to time in
accordance with Section 5.16(b), the "Escrow Agreement"), the Net Cash Proceeds
from the issuance by the Borrower of any New Subordinated Debt consummated prior
to the Refinancing Date, until the amount deposited in the Escrow Account equals
the aggregate principal amount of the 7% Debentures then outstanding (the
"Required Escrow Amount"). The Net Cash Proceeds from the issuance by the
Borrower of any New Subordinated Debt in excess of the Required Escrow Amount
may be retained by the Borrower, subject to being applied as required by
Sections 2.06 and 2.11 (to the extent contemplated thereby). The Escrow
Agreement will provide that (i) amounts on deposit in the Escrow Account will be
invested, at the direction of, if no Default shall have occurred and be
continuing, the Borrower or, if a Default shall have occurred and be continuing,
the Administrative Agent, in Temporary Cash Investments or such other
Investments as shall have been approved by the bank affiliate of each Lead
Arranger, and, prior to the Refinancing Date, may be withdrawn only to repay or
repurchase the 7% Debentures and (ii) on the Refinancing Date, amounts then on
deposit in the Escrow Account (after giving effect to any withdrawals made
therefrom on such Date the proceeds of which have been applied to repay or
repurchase any 7% Debentures then outstanding) will be applied as required by
Sections 2.06 and 2.11 (to the extent contemplated thereby) and any excess will
be released to the Borrower (so long as the Escrow Agent has not received
written notice from the trustee under the indenture pursuant to which the New
Subordinated Debt, any portion of the proceeds of which have been deposited in
the Escrow Account, was issued that a default has occurred and is then
continuing thereunder). Amounts on deposit in the Escrow Account (and no other
amounts or other assets) may be pledged to secure the obligations of the
Borrower under the New Subordinated Debt any portion of the proceeds of which
have been deposited in the Escrow Account; provided that the Lien securing such
obligations on any amounts on deposit in the Escrow Account will automatically
be released upon withdrawal of such amounts for the uses specified in the
immediately preceding sentence so long as the Escrow Agent has not received
written notice from such trustee that a default has occurred and is then
continuing thereunder.
Section 5.18. Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, (i) pay any funds to or
for the account of any Affiliate, (ii) make any investment in any Affiliate
(whether by acquisition of stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Debt, or otherwise), (iii) lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to any Affiliate, or (iv)
79
participate in, or effect, any transaction with any Affiliate, except in each
case on an arms-length basis on terms at least as favorable to the Borrower or
such Subsidiary as could have been obtained from a third party that was not an
Affiliate; provided that the foregoing provisions of this Section shall not
prohibit any such Person from declaring or paying any lawful dividend or other
payment ratably in respect of all its capital stock of the relevant class so
long as, after giving effect thereto, no Default shall have occurred and be
continuing (including without limitation pursuant to Section 5.15).
Section 5.19. Additional Guarantors. The Borrower shall cause (x) any
Person which becomes a Subsidiary (other than, subject to clause (z), any
Foreign Subsidiary or any Immaterial Subsidiary) after the date hereof, (y) any
Immaterial Subsidiary (other than, subject to clause (z), any Foreign
Subsidiary) that ceases to be an Immaterial Subsidiary after the date hereof and
(z) any Foreign Subsidiary and any Immaterial Subsidiary that has entered into,
or is proposing to enter into, a Guarantee of any other Debt of the Borrower or
any of its Subsidiaries, including without limitation any New Subordinated Debt,
any Other Refinancing Debt or any Debt of the Borrower described in clause (v)
of the parenthetical set forth in Section 5.09 (other than, with respect to any
Foreign Subsidiary, any Guarantee of any Debt of any of its Subsidiaries that is
a Foreign Subsidiary) to (i) enter into the Guarantee Agreement, (ii) become
bound by the Pledge Agreement and the Security Agreement and, if applicable,
enter into such additional agreements or instruments, each in form and substance
satisfactory to the Administrative Agent, as may be necessary or desirable in
order to grant a perfected first priority interest upon all of the Collateral
purportedly pledged by such Subsidiary pursuant to the Pledge Agreement and the
Security Agreement (subject to Liens on such Collateral permitted by the last
sentence of Section 5.06(a)) and (iii) deliver such certificates, evidences of
corporate or other organizational actions, notations and registrations,
financing statements, opinions of counsel, powers of attorney and other
documents relating thereto as the Administrative Agent may reasonably request,
all in form and substance reasonably satisfactory to the Administrative Agent,
in each case within (x) ten days after the date on which the relevant event
described in clauses (x), (y) or (z) occurs (or, if later, the date on which the
Borrower must have satisfied the requirements set forth in Section 5.20), in the
case of entering into the Guarantee Agreement and becoming bound by the Pledge
Agreement and the Security Agreement and (y) within 30 days after the date on
which the relevant event described in clauses (x), (y) or (z) occurs (or, if
later, the date on which the Borrower must have satisfied the requirements set
forth in Section 5.20), in the case of the other actions described in this
Section.
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Section 5.20. Collateral Documents. (a) On or prior to 90 days after the
Effective Date, the Borrower will, and will cause each of its Subsidiaries
(other than any Foreign Subsidiary or any Immaterial Subsidiary, unless any such
Subsidiary has entered into, or is proposing to enter into, a Guarantee of any
other Debt of the Borrower or any of its Subsidiaries, including without
limitation any New Subordinated Debt, any Other Refinancing Debt or any Debt of
the Borrower described in clause (v) of the parenthetical set forth in Section
5.09 (other than, with respect to any Foreign Subsidiary, any Guarantee of any
Debt of any of its Subsidiaries that is a Foreign Subsidiary)) to (i) enter into
the Pledge Agreement and the Security Agreement and, if applicable, enter into
such additional agreements or instruments, each in form and substance
satisfactory to the Administrative Agent, as may be necessary or desirable in
order to grant a perfected first priority security interest in all of the
Collateral purportedly pledged by the Borrower or such Subsidiary pursuant to
the Pledge Agreement and the Security Agreement (subject to Liens on such
Collateral permitted by the last sentence of Section 5.06(a)) and (ii) deliver
such certificates, evidences of corporate or other organizational actions,
notations and registrations, financing statements, opinions of counsel, powers
of attorney and other documents relating thereto as the Administrative Agent may
reasonably request, all in form and substance reasonably satisfactory to the
Administrative Agent.
(b) On or prior to 90 days after the Effective Date, the Borrower will, and
will cause each of its Subsidiaries to, enter into mortgages and such other
agreements, each in form and substance reasonably satisfactory to the
Administrative Agent, as may be necessary or desirable in order to grant the
Administrative Agent, for the benefit of the Bank Parties, a perfected first
priority mortgage Lien on each ownership interest in real property held by the
Borrower or such Subsidiary and listed on Schedule 5.20(b) (subject to Liens on
such Collateral permitted by Section 5.06(a)(viii)(z) and by the last sentence
of Section 5.06(a)). If on the first date after the Final Disposition Date with
respect to any Real Property Held For Sale the Borrower or any Subsidiary holds
such Real Property Held For Sale (other than any Real Property Held For Sale
constituting a leasehold interest in real property which has been subleased in
its entirety by the Borrower or any of its Subsidiaries on or prior to the Final
Disposition Date with respect thereto) then, within 90 days thereafter, the
Borrower will, or will cause such Subsidiary to, enter into a mortgage and such
other agreements, each in form and substance reasonably satisfactory to the
Administrative Agent, as may be necessary or desirable in order to grant the
Administrative Agent, for the benefit of the Bank Parties, a perfected first
priority mortgage Lien on such Real Property Held For Sale (subject to Liens on
such Collateral permitted by the last sentence of Section 5.06(a)). If at any
time after the Effective Date the Borrower or any of its Subsidiaries (other
than any Foreign Subsidiary) acquires any ownership interest in real property
with a fair market value in excess of $2,000,000, the
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Borrower will, or will cause such Subsidiary to, enter into a mortgage and such
other agreements, each in form and substance satisfactory to the Administrative
Agent, as may be necessary or desirable in order to grant the Administrative
Agent, for the benefit of the Bank Parties, a perfected first priority mortgage
Lien on such ownership interest (subject to Liens on such Collateral permitted
by the last sentence of Section 5.06(a)); provided that neither the Borrower nor
any of its Subsidiaries shall be required to grant any Lien pursuant to this
Section so long as doing so would trigger a requirement to equally and ratably
secure securities issued under the Indenture. Together with the execution of any
mortgage pursuant to this subsection, the Borrower will, or will cause its
Subsidiaries to, deliver such real property surveys, certificates, evidences of
corporate or other organizational actions, notations and registrations,
financing statements, opinions of counsel, powers of attorney and other
documents relating thereto as the Administrative Agent may reasonably request,
all in form and substance reasonably satisfactory to the Administrative Agent.
Each mortgage or other agreement entered into pursuant to this subsection (b)
and granting the Administrative Agent a Lien for the benefit of the Bank Parties
shall contain provisions regarding the release of the Collateral mortgaged
thereunder having substantially the same effect as the provisions regarding the
release of Collateral contained in the form of Security Agreement and the form
of Pledge Agreement set forth as Exhibits F and G to this Agreement.
ARTICLE 6
Defaults
Section 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail (i) to pay any principal of any Loan,
Swingline Loan or Reimbursement Obligation when due or (ii) to pay any
interest on any Loan, Swingline Loan or Reimbursement Obligation, any fees
or any other amount payable hereunder within two Domestic Business Days
after the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.03 (as it relates to maintenance of existence) and
Section 5.06 to 5.20, inclusive;
(c) any Obligor shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) or any other Loan Document for 30 days after
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written notice thereof has been given to the Borrower by the Administrative
Agent at the request of any Requesting Banks;
(d) any representation, warranty, certification or statement made (or
deemed made) by any Obligor in any Loan Document or in any certificate,
financial statement or other document delivered pursuant to any Loan
Document shall prove to have been incorrect in any material respect when
made (or deemed made);
(e) the Borrower and/or any of its Subsidiaries shall fail to pay,
when due or within any applicable grace period, any amount payable in
respect of any Material Debt;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) any of the Borrower or one or more Subsidiaries (unless such
Subsidiaries are Immaterial Subsidiaries) shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of it
or any of its assets, or shall consent to any such relief or to the
appointment of any such official or to any such official taking possession
of any of its assets, or shall make a general assignment for the benefit of
creditors, or shall state that it is unable to pay its debts generally as
they become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or one or more Subsidiaries (unless such Subsidiaries
constitute Immaterial Subsidiaries), in each case seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any of its assets, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period
of 60 days; or an order for relief shall be entered against the Borrower or
any Subsidiary under the federal bankruptcy laws as now or hereafter in
effect;
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $5,000,000 which it shall
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have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan (except for any termination under Section 4041(b)
of ERISA) shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any
Material Plan; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or
a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more members
of the ERISA Group to incur a current payment obligation in excess of
$5,000,000;
(j) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 10 days;
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Exchange Act) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the SEC under said Act) of 20% or
more of the outstanding shares of common stock of the Borrower; or
Continuing Directors shall cease to constitute a majority of the board of
directors of the Borrower;
(l) the Guarantee granted by any Subsidiary Guarantor pursuant to the
Guarantee Agreement shall cease for any reason to be in full force and
effect (other than a result of the release of such Guarantee with respect
to any Subsidiary Guarantor pursuant to the release provisions contained
therein), or any Obligor shall so assert in writing; or
(m) (i) any Lien created by any Collateral Document shall at any time
on or after such Collateral Document has been executed fail to constitute a
valid and perfected Lien on all the Collateral purported to be subject
thereto, securing the obligations purported to be secured thereby (other
than (x) to the extent attributable to the failure of the Administrative
Agent to maintain possession of any Collateral possession of which is
necessary in order to perfect such Lien or (y) a result of the release of
such Lien with respect to any Collateral pursuant to the release provisions
contained in the relevant Collateral Document) or (ii) any Obligor shall so
assert in writing;
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then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments and the Swingline Commitment and they
shall thereupon terminate, and (ii) if requested by Banks holding more than 50%
in aggregate principal amount of the Loans, by notice to the Borrower declare
the Loans and Swingline Loans (together with accrued interest thereon) to be,
and the Loans and Swingline Loans (together with accrued interest thereon) shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that if any Event of Default specified in clause (g) or (h)
above occurs with respect to the Borrower, then without any notice to the
Borrower or any other act by the Administrative Agent or the Banks, the
Commitments and the Swingline Commitment shall thereupon terminate and the Loans
and Swingline Loans (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
Section 6.02. Notice of Default. The Administrative Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Requesting Banks and shall thereupon notify all the Banks thereof.
Section 6.03. Cash Cover. The Borrower agrees, in addition to the
provisions of Section 6.01, that upon the occurrence and during the continuance
of any Event of Default, it shall, if requested by the LC Agent upon the
instruction of the Required Banks, deposit in the LC Collateral Account an
amount in immediately available funds equal to the aggregate amount available
for drawing under all Letters of Credit then outstanding at such time, provided
that, upon the occurrence of any Event of Default specified in clause (g) or (h)
of Section 6.01 with respect to the Borrower, the Borrower shall deposit such
amount forthwith without any notice or demand or any other act by the LC Agent
or the Banks.
ARTICLE 7
The Administrative Agent, Lead Arrangers, Documentation Agent and
Co-Agents
Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Administrative Agent and the Lead Arrangers to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent or the Lead Arrangers by
the terms thereof, together with all such powers as are reasonably incidental
thereto.
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Section 7.02. Agents and Affiliates. Each Bank acting as an Agent, Co-
Agent, Lead Arranger or Swingline Bank in connection with the Loan Documents or
the credit facility provided hereby shall have the same rights and powers under
this Agreement as any other Bank and may exercise or refrain from exercising the
same as though it were not so acting. Each Bank so acting, and each of their
respective affiliates, may accept deposits from, lend money to, and generally
engage in any kind of business with, the Borrower or any Subsidiary or affiliate
of the Borrower as if it were not so acting.
Section 7.03. Obligations of the Co-agents and Document Agent. The
Co-Agents and Documentation Agent, in their capacities as such, shall have no
duties, obligations or liabilities of any kind hereunder.
Section 7.04. Obligations of Administrative Agent and Lead Arrangers. The
obligations of the Administrative Agent, the Lead Arrangers and the affiliates
of each Lead Arranger under the Loan Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
Section 7.05. Consultation with Experts. The Administrative Agent, each
Lead Arranger, the LC Agent and the affiliates of each Lead Arranger may consult
with legal counsel (who may be counsel for any Obligor), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
Section 7.06. Liability of Agents and Lead Arrangers. None of the
Documentation Agent, the Administrative Agent, any Lead Arranger, their
respective affiliates or their respective directors, officers, agents or
employees shall be liable for any action taken or not taken in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. None of the
Documentation Agent, the Administrative Agent, any Lead Arranger, their
respective affiliates or their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
any Loan Document or any Extension of Credit; (ii) the performance or observance
of any of the covenants or agreements of any Obligor; (iii) the satisfaction of
any condition specified in Article 3 except, in the case of the Administrative
Agent, receipt of items required to be delivered
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to it; (iv) the validity, effectiveness or genuineness of any Loan Document or
any other instrument or writing furnished in connection therewith; or (v) the
existence, validity or sufficiency of any Collateral. The LC Agent shall not
incur any liability by acting in reliance upon information supplied by the
Administrative Agent as to the Total Usage at any time (including Loans to be
made pursuant to Notices of Borrowing theretofore received by the Administrative
Agent). The Administrative Agent shall not incur any liability by acting in
reliance upon (i) information supplied to it by the LC Agent as to the Aggregate
LC Exposure at any time or (ii) any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex, facsimile transmission or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
Section 7.07. Indemnification. The Banks shall, ratably in accordance with
their respective Credit Exposures, indemnify the Administrative Agent and the
Lead Arrangers and their respective affiliates, directors, officers, agents and
employees (to the extent not reimbursed by the Obligors) against any cost,
expense (including counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection with
the Loan Documents or any action taken or omitted by such indemnitees
thereunder.
Section 7.08. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Lead Arrangers or any Bank Party,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the Lead
Arrangers or any Bank Party, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
Section 7.09. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving notice thereof to the Banks and the Borrower, such
resignation to be effective when a successor Administrative Agent is appointed
pursuant to this Section and accepts such appointment. Upon receiving any such
notice of resignation, the Required Banks shall have the right to appoint a
successor Administrative Agent, subject to the approval of the Borrower (unless
an Event of Default shall have occurred and be continuing at the time of such
appointment, in which case the Borrower's approval will not be required). If no
successor Administrative Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the other Banks, appoint a successor
Administrative Agent, which shall be a commercial bank organized or licensed
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights 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 hereunder, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent.
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Section 7.10. Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its account, fees in the amounts and at the times
previously agreed upon between the Borrower and the Administrative Agent.
ARTICLE 8
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any CD Loan, Euro-Dollar
Loan or Money Market LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having 50% or
more of the aggregate principal amount of the affected Loans advise the
Administrative Agent that the Adjusted CD Rate or the Adjusted London
Interbank Offered Rate, as the case may be, as determined by the
Administrative Agent will not adequately and fairly reflect the cost to
such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may
be, for such Interest Period,the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks
to make CD Loans or Euro-Dollar Loans, or to continue such Loans for an
additional Interest Period, as the case may be, or to convert outstanding
Loans into CD Loans or Euro-Dollar Loans, as the case may be, shall be
suspended and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the
case may be, shall be converted into a Base Rate Loan on the last day of
the then current Interest Period applicable thereto. Unless the Borrower
notifies the Administrative Agent at least two Domestic Business Days
before the date of any affected Borrowing for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, (i) if
such affected Borrowing is a CD Borrowing or Euro-Dollar Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such
affected Borrowing is a Money Market LIBOR Borrowing, the Money Market
LIBOR Loans comprising such Borrowing shall bear interest for each day from
and including the first day to but excluding the last day of the Interest
Period applicable thereto at the Base Rate for such day.
Section 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency, shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, to continue Euro-Dollar Loans
for an additional Interest Period or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate Loan either (i) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may lawfully continue to maintain and fund such Loan to such
day or (ii) immediately if such Bank shall determine that it may not lawfully
continue to maintain and fund such Loan to such day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x) the
date hereof, in the case of any Committed Loan or Swingline Loan or Letter of
Credit or any obligation to make Committed Loans or Swingline Loans or
participate in Letters of Credit or (y) the date of the related Money Market
Quote,
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in the case of any Money Market Loan, the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) or the Swingline Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency, shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (ii) with
respect to any Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or the Swingline Bank or shall impose on any Bank (or its
Applicable Lending Office) or the Swingline Bank or on the United States market
for certificates of deposit or the London interbank market any other condition
affecting its Fixed Rate Loans, its Note, its Swingline Loans, its Swingline
Note, its obligation to make Fixed Rate Loans or Swingline Loans or its
obligation to participate in any Letter of Credit and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan, or participating in any
Letter of Credit or increase the cost to the Swingline Bank of making or
maintaining any Swingline Loan or to reduce the amount of any sum received or
receivable by such Bank (or its Applicable Lending Office) or the Swingline Bank
under this Agreement or under its Note or Swingline Note with respect thereto,
by an amount deemed by such Bank or the Swingline Bank to be material, then,
within 15 days after receiving a request by such Bank or the Swingline Bank for
compensation under this subsection, accompanied by a certificate complying with
subsection (e) of this Section (with a copy to the Administrative Agent), the
Borrower shall, subject to subsection (f) of this Section, pay to such Bank or
the Swingline Bank such additional amount or amounts as will compensate such
Bank or the Swingline Bank for such increased cost or reduction.
(b) If, on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the LC Agent with any request or
directive (whether or not having the force of law) made on or after the date of
this Agreement by any such authority, central bank or comparable agency, shall
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impose, modify or deem applicable any reserve (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System), special deposit, insurance assessment or similar requirement against
any Letter of Credit issued by the LC Agent or shall impose on the LC Agent any
other condition affecting its Letters of Credit or its obligation to issue
Letters of Credit and the result of any of the foregoing is to increase the cost
to the LC Agent of issuing any Letter of Credit or to reduce the amount of any
sum received or receivable by the LC Agent under this Agreement with respect
thereto, by an amount deemed by the LC Agent to be material, then, within 15
days after demand by the LC Agent (with a copy to the Administrative Agent), the
Borrower shall pay to the LC Agent such additional amount or amounts as will
compensate the LC Agent for such increased cost or reduction.
(c) If any Bank, the Swingline Bank or the LC Agent shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank, the Swingline Bank or the LC Agent, as
the case may be (or its Parent), as a consequence of its obligations hereunder
to a level below that which such Bank, the Swingline Bank or the LC Agent, as
the case may be (or its Parent), could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by it to be material, then from
time to time, within 15 days after receiving a request by such Bank, the
Swingline Bank or the LC Agent, as the case may be, for compensation under this
subsection, accompanied by a certificate complying with subsection (e) of this
Section (with a copy to the Administrative Agent), the Borrower shall, subject
to subsection (f) of this Section, pay to such Bank, the Swingline Bank or the
LC Agent, as the case may be, such additional amount or amounts as will
compensate it (or its Parent) for such reduction.
(d) Each Bank, the Swingline Bank and the LC Agent will promptly notify the
Borrower and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle it to compensation pursuant
to this Section and will designate a different Applicable Lending Office or LC
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in its judgment, be otherwise disadvantageous to
it. If a Bank, the Swingline Bank or the LC Agent fails to notify the Borrower
of any such event within 180 days after such event occurs, it shall not be
entitled to compensation under this Section for any effect of such event arising
more than 180 days before it does notify the Borrower thereof.
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(e) Each request by a Bank, the Swingline Bank or the LC Agent for
compensation under this Section shall be accompanied by a certificate, signed by
one of its authorized employees, setting forth in reasonable detail (i) the
basis for claiming such compensation, (ii) the additional amount or amounts to
be paid to it hereunder and (iii) the method of calculating such amount or
amounts, which certificate shall be conclusive in the absence of manifest error.
In determining such amount, such Bank, the Swingline Bank or the LC Agent may
use any reasonable averaging and attribution methods.
(f) Notwithstanding any other provision of this Section, none of the Banks,
the Swingline Bank and the LC Agent shall be entitled to compensation under
subsection (a), (b) or (c) of this Section if it is not then its general
practice to demand compensation in similar circumstances under comparable
provisions of other credit agreements.
Section 8.04. Taxes. (a) For purposes of this Section 8.04, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by the Borrower
pursuant to the Loan Documents, and all liabilities with respect thereto,
excluding (i) in the case of each Bank Party, taxes imposed on or measured by
its income, and franchise or similar taxes imposed on it, by a jurisdiction
under the laws of which it is organized or qualified to do business (but only if
the taxes are imposed solely because such Bank Party is qualified to do business
in such jurisdiction without regard to any Loan) or in which its principal
executive office is located or in which its Applicable Lending Office or LC
Office is located and (ii) in the case of each Bank, any United States
withholding tax imposed on such payments other than such withholding tax imposed
as a result of a change in treaty, law or regulation occurring after a Bank
first becomes subject to this Agreement.
"Other Taxes" means any present or future stamp, documentary or mortgage
recording taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to the Loan Documents or from
the execution, delivery or enforcement of, or otherwise with respect to, the
Loan Documents.
(b) Any and all payments by the Borrower to or for the account of any Bank
Party under any Loan Document shall be made without deduction for any Taxes or
Other Taxes; provided that, if the Borrower shall be required by law to
91
deduct any Taxes or Other Taxes from any such payments, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
8.04) such Bank Party receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank Party for the full amount of
any Taxes or Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 8.04) paid by such Bank Party and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, provided that
Borrower shall not indemnify any Bank Party for any penalties or interest on any
Taxes or Other Taxes accrued during the period between the 15th day after such
Bank Party has received a notice from the jurisdiction asserting such Taxes or
Other Taxes and such later day on which such Bank Party has informed the
Borrower of the receipt of such notice. This indemnification shall be paid
within 15 days after such Bank Party makes demand therefor.
(d) Each Bank Party organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank Party listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank Party in the case of each
other Bank Party, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Bank Party remains lawfully able to do
so), shall provide the Borrower with Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank Party is entitled to benefits under an income
tax treaty to which the United States is a party which exempts such Bank Party
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank Party or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank Party has failed to provide
the Borrower with the appropriate form as required by Section 8.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank Party shall not be entitled to indemnification under
Section 8.04(b) or (c) with respect to Taxes (including penalties, interest and
expenses) imposed by the United States; provided that if a Bank Party, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank Party shall reasonably request
to assist such Bank Party to recover such Taxes.
92
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank Party pursuant to this Section 8.04, then such Bank Party
will change the jurisdiction of its Applicable Lending Office or LC Office if,
in the judgment of such Bank Party, such change (i) will eliminate or reduce any
such additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank Party.
(g) If a Bank Party receives a notice from a taxing authority asserting any
Taxes or Other Taxes for which the Borrower is required to indemnify such Bank
Party under Section 8.04(c), it shall furnish to the Borrower a copy of such
notice no later than 90 days after the receipt thereof. If such Bank Party has
failed to furnish a copy of such notice to the Borrower within such 90-day
period as required by this Section 8.04(g), the Borrower shall not be required
to indemnify such Bank Party for any such Taxes or Other Taxes (including
penalties, interest and expenses thereon) arising between the 90th day after
such Bank Party has received such notice and the day on which such Bank Party
has furnished to the Borrower a copy of such notice.
Section 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans. If
(i) the obligation of any Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro- Dollar Loans
and, in either case, the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist, all Loans which would
otherwise be made by such Bank as (or continued as or converted into) CD Loans
or Euro-Dollar Loans, as the case may be, shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the related
CD Loans or Euro-Dollar Loans of the other Banks). If such Bank notifies the
Borrower that the circumstances giving rise to such notice no longer apply, the
principal amount of each such Base Rate Loan shall be converted into a CD Loan
or Euro-Dollar Loan, as the case may be, on the first day of the next succeeding
Interest Period applicable to the related CD Loans or Euro-Dollar Loans of the
other Banks.
93
Section 8.06. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank has demanded compensation under Section 8.03 or 8.04, the Borrower shall
have the right, with the assistance of the Administrative Agent, to seek a
mutually satisfactory substitute bank or banks (which may be one or more of the
Banks) to replace such Bank. Any substitution under this Section 8.06 may be
accomplished, at the Borrower's option, either (i) by the replaced Bank
assigning its rights and obligations hereunder to the replacement bank or banks
pursuant to Section 9.06(c) at a mutually agreeable price or (ii) by the
Borrower prepaying all outstanding Loans from the replaced Bank and terminating
its Commitment on a date specified in a notice delivered to the Administrative
Agent and the replaced Bank at least three Euro-Dollar Business Days before the
date so specified (and compensating such Bank for any resulting funding losses
as provided in Section 2.15) and concurrently the replacement bank or banks
assuming a Commitment in an amount equal to the Commitment being terminated and
making Loans in the same aggregate amount and having the same maturity date or
dates, respectively, as the Committed Loans being prepaid, all pursuant to
documents reasonably satisfactory to the Administrative Agent (and in the case
of any document to be signed by the replaced Bank, reasonably satisfactory to
such Bank). No such substitution shall relieve the Borrower of its obligation to
compensate and/or indemnify the replaced Bank as required by Sections 8.03 and
8.04 with respect to the period before it is replaced and to pay all accrued
interest, accrued fees and other amounts owing to the replaced Bank hereunder.
ARTICLE 9
Miscellaneous
Section 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower, the LC Agent, the Swingline Bank or the Administrative
Agent, at its address, facsimile number or telex number set forth on the
signature pages hereof, (b) in the case of any Lead Arranger or its affiliate,
at its address, facsimile number or telex number set forth in its Administrative
Questionnaire or (c) in the case of any Bank, at its address, facsimile number
or telex number set forth in its Administrative Questionnaire or (d) in the case
of any party, such other address, facsimile number or telex number as such party
may hereafter specify for such purpose by notice to the Administrative Agent and
the Borrower. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received,
(ii) if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is received, (iii)
if given by mail, three Domestic Business Days after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid,
or (iv) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Administrative Agent under Article 2
or Article 8 and notices to the LC Agent or the Swingline Bank under Article 2
shall not be effective until received.
94
Section 9.02. No Waivers. No failure or delay by any Bank Party in
exercising any right, power or privilege under any Loan Document shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies provided in the Loan Documents shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03. Expenses; Indemnificaiton. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Lead Arrangers and their affiliates,
including reasonable fees and disbursements of special counsel, in connection
with the negotiation and preparation of the Loan Documents, (ii) all reasonable
out-of-pocket expenses of the Lead Arrangers, the Administrative Agent and the
affiliates of each Lead Arranger, including reasonable fees and disbursements of
special counsel and reasonable fees and disbursements of accountants and any
other advisors to the Lead Arrangers, the Administrative Agent and the
affiliates of each Lead Arranger, in connection with the administration of the
Loan Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default thereunder, and the allocated cost of internal
counsel of each Bank Party in connection with any waiver or consent under the
Loan Documents or any amendment thereof and (iii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Lead Arrangers and each Bank Party
including (without duplication) the fees and disbursements of special counsel
and the allocated cost of internal counsel and the fees and disbursements of
accountants and any other advisors to the Lead Arrangers or any Bank Party, in
connection with any collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Bank Party, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be
95
designated a party thereto) brought or threatened relating to or arising out of
the Loan Documents or any actual or proposed use of proceeds of Loans or Letters
of Credit hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
Section 9.04. Sharing of Set-offs. (a) Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a proportion of the aggregate amount of principal and interest that has
become due with respect to the Loans held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest that has become due with respect to the Loans held by
such other Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Loans held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Loans held by the Banks shall be
shared by the Banks pro rata.
(b) Each Bank further agrees that if it shall, by exercising any right of
set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of the principal of and interest on the Reimbursement
Obligations held by it or for its account which is greater than the proportion
received in respect of the aggregate amount of the principal of and interest on
the Reimbursement Obligations held by or for the account of any other Bank, the
Bank receiving such proportionately greater payment shall purchase such
participations in the aggregate amount of the principal of and interest on the
Reimbursement Obligations held by or for the account of the other Banks, and
such other adjustments shall be made, as may be required so that all such
payments of the aggregate amount of the principal of and interest on the
Reimbursement Obligations held by or for the account of the Banks shall be
shared by them pro rata.
(c) Nothing in this Section shall impair the right of any Bank to exercise
any right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of the Borrower other than its
indebtedness hereunder.
(d) The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Loan or LC
Reimbursement Obligation, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of the Borrower in the amount of such participation.
96
Section 9.05. Amendments and Waivers. (a) Any provision of this Agreement,
the Notes or the Swingline Note may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks (and, if the rights or duties of the Administrative Agent, the LC Agent,
the Swingline Bank or the Lead Arrangers and their affiliates are affected
thereby, by the Administrative Agent, the LC Agent, the Swingline Bank, the Lead
Arrangers or the Co-Agents, as the case may be); provided that no such amendment
or waiver shall, unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or Swingline Loan or any fees
hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or Swingline Loan or any fees hereunder or for the
termination of any Commitment, (iv) reduce the principal of or rate of interest
on any Reimbursement Obligation, (v) postpone the date fixed for payment by the
Borrower of any Reimbursement Obligation or extend the expiry date of any Letter
of Credit to a date later than the fifth Domestic Business Day prior to the
Termination Date, (vi) unless signed by the Swingline Bank, increase the
Swingline Commitment, postpone the date fixed for termination of the Swingline
Commitment or otherwise affect any of its rights and obligations, or (vii)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this Section or any other
provision of this Agreement (including without limitation subsection (b) of this
Section 9.05).
(b) Any provision of the Collateral Documents or the Guarantee Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by each Obligor party thereto and the Administrative Agent with
the consent of the Required Banks; provided that no such amendment or waiver
shall, unless signed by each Obligor party thereto and the Administrative Agent
with the consent of all the Banks, (i) effect or permit a release of all or
substantially all of the Collateral, or (ii) release all or substantially all of
the Obligors from their obligations under the Guarantee Agreement or permit
termination of the Guarantee Agreement, except in each case as expressly
permitted by the terms thereof.
Section 9.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of each Bank, the LC Agent and the Swingline Bank.
97
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans or all or any part of its LC Exposure. If any Bank
grants a participating interest to a Participant, whether or not upon notice to
the Borrower and the Administrative Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, such Bank shall remain the
holder of its Loans or LC Exposure, as the case may be, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii), (iii), (iv) or (v) of Section 9.05(a) or clause
(i) or (ii) of Section 9.05(b) without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article 8 with respect
to its participating interest. An assignment or other transfer which is not
permitted by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) Any Bank may, in the ordinary course of its business and in accordance
with applicable law, at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit I hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consents of the Borrower,
the LC Agent, the Swingline Bank and the Administrative Agent (which consents
shall not be unreasonably withheld); provided that (i) such consents shall not
be required if the Assignee is an affiliate of such transferor Bank or was a
Bank immediately prior to such assignment or if, at the time of the proposed
assignment, an Event of Default has occurred and is continuing; (ii) such
assignment may, but need not, include rights of the transferor Bank in respect
of outstanding Money Market Loans and (iii) the $5,000,000 minimum amount
specified above for a partial assignment of the transferor Bank's rights and
obligations shall not apply if the Assignee was a Bank immediately prior to such
assignment. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee
98
shall be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder (and its Commitment shall be reduced) to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such assignment in the
amount of $3,500; provided that the Borrower shall pay such administrative fee
if such assignment is required by the Borrower pursuant to Section 8.06. If the
Assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.
(d) Any Bank or Swingline Bank may at any time assign all or any portion of
its rights under this Agreement and its Notes or Swingline Notes, as the case
may be, to a Federal Reserve Bank. No such assignment shall release the
transferor Bank or Swingline Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
Section 9.07. No-Reliance on Margin Stock. Each of the Banks represents to
the Administrative Agent and each of the other Banks that it in good faith is
not relying upon any "margin stock" (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in this Agreement.
Section 9.08. Governing Law; Submission to Jurisdiction. (a) Each Letter of
Credit and Section 2.17 shall be subject to the UCP, and, to the extent not
inconsistent therewith, the laws of the State of New York.
(b) SUBJECT TO CLAUSE (a) OF THIS SECTION, EACH LOAN DOCUMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
99
(c) The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to any Loan Document or the transactions
contemplated thereby. The Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
Section 9.09. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR TRANSACTIONS CONTEMPLATED THEREBY.
100
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VENATOR GROUP, INC.
By______________________________
Name:
Title:
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile number: 000-000-0000
X.X. XXXXXX SECURITIES INC.,
as Lead Arranger
By______________________________
Name:
Title:
BNY CAPITAL MARKETS, INC.,
as Lead Arranger
By______________________________
Name:
Title:
NATIONSBANK XXXXXXXXXX LLC,
as Lead Arranger
By______________________________
Name:
Title:
000
XXXXXX XXXXXXXX XXXXX XXXXXXX
XX XXX XXXX
By______________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
as Documentation Agent and a Bank
By______________________________
Name:
Title:
NATIONSBANK, N.A.
By______________________________
Name:
Title:
THE BANK OF NEW YORK
By______________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
as Co-Agent and a Bank
By______________________________
Name:
Title:
102
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as Co-Agent and a Bank
By______________________________
Name:
Title:
TORONTO DOMINION (NEW YORK), INC.,
as Co-Agent and a Bank
By______________________________
Name:
Title:
COMMERZBANK AG, NEW YORK BRANCH
By______________________________
Name:
Title:
By______________________________
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By______________________________
Name:
Title:
000
XXXXXXXX XXXX XX, XXX XXXX BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By______________________________
Name:
Title:
By______________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By______________________________
Name:
Title:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By______________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By______________________________
Name:
Title:
000
XXX XXXX XX XXX XXXX, as Administrative
Agent, LC Agent and Swingline Bank
By______________________________
Name:
Title:
105
COMMITMENT SCHEDULE
------------------------------------------------------------- ------------------------------------
Bank Commitment
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Xxxxxx Guaranty Trust Company of New York $ 60,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
NationsBank, N.A. $ 51,600,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
The Bank of New York $ 51,600,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
The Bank of Nova Scotia $ 37,600,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Bank of Tokyo-Mitsubishi Trust Company $ 37,600,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Toronto Dominion (New York), Inc. $ 29,600,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Bank of America National Trust & Savings Association $24,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Commerzbank AG, New York and/or Grand Cayman Branches $ 20,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Credit Lyonnais New York Branch $ 20,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Deutsche Bank AG, New York and/or Cayman Island Branch $ 20,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
KeyBank National Association $ 20,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Xxxxx Fargo Bank, N.A. $ 20,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Union Bank of California, N.A. $ 8,000,000
------------------------------------------------------------- ------------------------------------
------------------------------------------------------------- ------------------------------------
Total $400,000,000
------------------------------------------------------------- ------------------------------------
106
PRICING SCHEDULE
The "Euro-Dollar Margin", "LC Fee Rate", "CD Margin" and "Facility Fee
Rate" for any day are the respective percentages per annum set forth in the
table below in the applicable row under the column corresponding to the Pricing
Level that applies on such day (subject to the sentence immediately following
such table):
========================================================================================================
Level I Level II Level III Xxxxx XX Xxxxx X Xxxxx XX Xxxxx XXX
Pricing Level
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Euro-Dollar
Margin and LC Fee
Rate
If Utiliza-
tion is .3500 .6250 .9500 1.6500 2.0000 2.1250 2.2500
50% or less
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
If Utiliza- .4750 .8750 1.2000 1.9000 2.2500 2.5000 2.7500
tion exceeds
50%
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
CD Margin
If Utiliza- .4750 .7500 1.0750 1.7750 2.1250 2.250 2.3750
tion is
50% or less
If Utiliza- .6000 1.0000 1.3250 2.0250 2.3750 2.6250 2.8750
tion exceeds
50%
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Facility Fee Rate .1500 .2500 .3000 .3500 .5000 .7500 1.000
--------------------------------------------------------------------------------------------------------
On any date after October 31, 1999, each rate per annum set forth in the
table above shall be increased by 0.50% if such date is prior to the Refinancing
Date and the aggregate amount on deposit in the Escrow Account on such date is
less than the Required Escrow Amount.
"Base Rate Margin" means, on any day, (i) the Euro-Dollar Margin for such
day minus (i) 1.00%.
107
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies on any day on which (i) the Borrower's commercial
paper is rated A2 or higher by S&P and P2 or higher by Xxxxx'x and (ii) the
Loans are expressly rated BBB or higher by S&P and Baa2 or higher by Xxxxx'x.
"Level II Pricing" applies on any day on which (i) the Borrower's
commercial paper is rated A3 or higher by S&P and P3 or higher by Xxxxx=s and
(ii) the Loans are expressly rated BBB- or higher by S&P and Baa3 or higher by
Xxxxx'x.
"Level III Pricing" applies on any day on which (i) the Borrower's
commercial paper is rated A3 or higher by S&P and P3 or higher by Xxxxx'x and
(ii) the Loans are expressly rated (A) BB+ or higher by S&P and Baa3 or higher
by Xxxxx'x or (B) BBB- or higher by S&P and Ba1 or higher by Xxxxx'x.
"Level IV Pricing" applies on any day on which the Loans are expressly
rated BB+ or higher by S&P and Ba1 or higher by Xxxxx'x.
"Level V Pricing" applies on any day on which the Loans are expressly rated
BB or higher by S&P and Ba2 or higher by Xxxxx'x.
"Level VI Pricing" applies on any day on which Loans are expressly rated
BB- or higher by S&P and Ba3 or higher by Xxxxx'x.
"Level VII Pricing" applies on any day if no other Pricing Level applies on
such day.
"Pricing Level" refers to the determination of which of Level I Pricing,
Level II Pricing, Level III Pricing, Level IV Pricing, Level V Pricing, Level VI
Pricing or Level VII Pricing applies on any day.
"Utilization" means at any date the percentage equivalent of a fraction (i)
the numerator of which is the Total Usage at such date, after giving effect to
any borrowing or repayment on such date, and (ii) the denominator of which is
the Total Commitments at such date, after giving effect to any reduction of the
Commitments on such date. For purposes of this Schedule, if for any reason any
Bank has any Credit Exposure after the Commitments terminate, the Utilization on
and after the date of such termination shall be deemed to exceed 50%.
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108
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the unsecured commercial paper of the Borrower without third-party
credit enhancement or the Loans made to the Borrower, as the case may be. Any
rating assigned to any other commercial paper or other debt security of the
Borrower shall be disregarded. The rating in effect at any date is that in
effect at the close of business on such date.
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109
Schedule 1.01(a)
MATERIAL TRADEMARKS
Actra
AfterThoughts
Athletic Shoe Factory
Authentic Northern Experience
The Bargain Shop
Champs Sports
Colorado
Cottage Essentials
Eastbay
Element Boreal
Foot Locker
Foot Locker Athletic Club
Going to the Game
Kids Foot Locker
Xxxxxx
Lady Foot Locker
Loon Design
Northern Elements
Northern Getaway
Northern Reflections
Northern Traditions
Xxxxx River
Referee Design
Reflet Boreal
Reflexions
The San Francisco Music Box Company
The San Francisco Music Box & Gift Company
Venator Group
Vestiaire Sportif
Village Wheels
Weekend Edition
Xxxxxxxx the Shoemen
Woolco
Woolworth
World Foot Locker
110
5
Schedule 1.01(b)
DEBT THAT MAY BE REFINANCED
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
Issuance Original Interest Maturity Balance O/S
Date Amount Rate Date Jan. 30, 1999
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
$200 Million 01/16/92 $ 200,000,000 8.50% 01/15/22 $ 200,000,000
30-Year Note
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
$200 Million 06/08/95 $ 200,000,000 7.00% 06/01/00 $ 200,000,000
5-Year Note
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
$50 Million 10/05/95 $ 50,000,000 6.98% 10/15/01 $ 50,000,000
6-Year Note
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
$40 Million 10/13/95 $ 40,000,000 7.00% 10/15/02 $ 40,000,000
7-Year Note
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
Total $ 490,000,000
---------------------- ----------------- --------------------- ------------- ----------------- ---------------------
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111
Schedule 1.01(c)
EXISTING STANDBY LETTERS OF CREDIT
--------------------------- -------------------------- ------------------ ------------------------
Standby
Banks Beneficiary Amount Expiry Date
--------------------------- -------------------------- ------------------ ------------------------
--------------------------- -------------------------- ------------------ ------------------------
Key Bank Xxxxxxx Brothers $ 250,000 11/01/99
--------------------------- -------------------------- ------------------ ------------------------
--------------------------- -------------------------- ------------------ ------------------------
Bank of New York Xxxxxx Insurance $ 14,500,000 01/31/00
--------------------------- -------------------------- ------------------ ------------------------
--------------------------- -------------------------- ------------------ ------------------------
Bank of New York Travelers Insurance $ 12,831,397 07/27/99
--------------------------- -------------------------- ------------------ ------------------------
--------------------------- -------------------------- ------------------ ------------------------
Total $ 27,581,397
--------------------------- -------------------------- ------------------ ------------------------
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112
Schedule 5.06
EXISTING CAPITAL LEASES
--------------------------------------------------------- -------------------------
Junction City Distribution Center..................... $13,371,386
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
Point of Sale Equipment............................... $ 3,881,952
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
Footlocker Stores..................................... $ 179,231
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
Capital Leases entered into prior to 1998............. $ 6,177,774
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
Capital Leases entered into in 1998................... $ 1,977,100
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
Total $25,587,443
--------------------------------------------------------- -------------------------
--------------------------------------------------------- -------------------------
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113
Schedule 5.20(b)
REAL PROPERTY TO BE MORTGAGED
----------------------------- ----------------- --------- -------------------- -------------------
Gross Book
Store # City State Value Value
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
0000 Xxxxx XX $ 2,130,000 $ 1,835,000
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
Office/Warehouse Camp Hill PA $ 6,700,000 $ 7,219,000
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
Champs Office Bradenton FL $ 6,000,000 $ 6,828,000
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
Xxxxxx Warehouse Xxxxxx ONT $ 4,725,000 $ 6,650,000
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
Total $ 19,555,000 $ 22,532,000
----------------------------- ----------------- --------- -------------------- -------------------
----------------------------- ----------------- --------- -------------------- -------------------
5
114
EXHIBIT A
NOTE
New York, New York
March __ , 1999
For value received, VENATOR GROUP, INC., a New York corporation (the
"Borrower"), promises to pay to the order of _____________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid principal amount of each
Loan made by the Bank to the Borrower pursuant to the Credit Agreement referred
to below on the maturity date thereof provided for in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of each such
Loan on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office of
The Bank of New York, One Xxxx Xxxxxx, 00 Xxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that neither the failure of the Bank to make any such recordation or
endorsement, nor any error therein, shall affect the obligations of the Borrower
hereunder or of the Borrower or any other Obligor under any Loan Document.
1
115
This note is one of the Notes referred to in the Credit Agreement dated as
of April 9, 1997 and amended and restated as of March 19, 1999 among the
Borrower, the Banks party thereto, Co-Agents party thereto, Bank of America
National Trust & Savings Association, as Documentation Agent, The Bank of New
York as Administrative Agent, LC Agent and Swingline Bank and the Lead Arrangers
party thereto (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof, the acceleration of the maturity hereof and the basis upon
which this Note is guaranteed and secured.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
VENATOR GROUP, INC.
By ________________________
Name:
Title:
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116
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------
Amount of
Amount of Principal Notation
Date Loan Repaid Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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EXHIBIT B
SWINGLINE NOTE
New York, New York
March __, 1999
For value received, VENATOR GROUP, INC., a New York corporation (the
"Borrower"), promises to pay to the order of THE BANK OF NEW YORK (the
"Swingline Bank") the unpaid principal amount of each Swingline Loan made by the
Swingline Bank to the Borrower pursuant to the Credit Agreement referred to
below on the maturity date provided for in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of each such Swingline
Loan on the dates and at the rate or rates provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of the
United States in Federal or other immediately available funds at the office of
The Bank of New York, One Xxxx Xxxxxx, 00 Xxxxx, Xxx Xxxx, Xxx Xxxx.
All Swingline Loans made by the Swingline Bank and all repayments of the
principal thereof shall be recorded by the Swingline Bank and, if the Swingline
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Swingline Loan then outstanding may be endorsed by the Swingline Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that neither the failure of the Swingline Bank
to make any such recordation or endorsement, nor any error therein, shall affect
the obligations of the Borrower hereunder or of the Borrower or any other
Obligor under any Loan Document.
This note is the Swingline Note referred to in the Credit Agreement dated
as of April 9, 1997 and amended and restated as of March 19, 1999 among the
Borrower, the Banks party thereto, Co-Agents party thereto, Bank of America
National Trust & Savings Association, as Documentation Agent, The Bank of New
York as Administrative Agent, LC Agent and Swingline Bank and the Lead Arrangers
party thereto (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof, the acceleration of the maturity hereof and the basis upon
which this Note is guaranteed and secured.
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118
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
VENATOR GROUP, INC.
By________________________
Name:
Title:
2
119
Swingline Note (cont'd)
SWINGLINE LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------
Amount of Amount of
Swingline Principal Notation
Date Loan Repaid Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
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EXHIBIT C
FORM OF MONEY MARKET QUOTE REQUEST
[Date]
To: The Bank of New York, as Administrative Agent
Xxx Xxxx Xxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
From: Venator Group, Inc.
Re: Credit Agreement dated as of April 9, 1997 and amended and restated as
of March 19, 1999 (as amended from time to time, the "Credit
Agreement") among Venator Group, Inc., the Banks party thereto, the Co-
Agents party thereto, Bank of America National Trust & Savings
Association, as Documentation Agent, The Bank of New York, as
Administrative Agent (the "Administrative Agent"), LC Agent and
Swingline Bank and the Lead Arrangers party thereto.
We hereby give notice pursuant to Section 2.03 of the Credit Agreement that
we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount1/ Interest Period 2/
---------------- ---------------
$
--------
1 Amount must be $15,000,000 or a larger multiple of $1,000,000.
2 Not less than one month (LIBOR Auction) or not less than 14 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
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121
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Credit
Agreement.
VENATOR GROUP, INC.
By________________________
Name:
Title:
2
122
EXHIBIT D
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes to Venator Group, Inc. (the
"Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of April 9, 1997
and amended and restated as of March 19, 1999 among the Borrower, the Banks
party thereto, the Co-Agents party thereto, Bank of America National Trust &
Savings Association, as Documentation Agent, The Bank of New York, as
Administrative Agent (the "Administrative Agent"), LC Agent and Swingline Bank
and the Lead Arrangers party thereto (as further amended from time to time, the
"Credit Agreement"), we are pleased on behalf of the Borrower to invite you to
submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
---------------- --------------
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.]
(New York City time) on [date].
1
123
Terms used herein have the meanings assigned to them in the Credit
Agreement.
THE BANK OF NEW YORK,
as Administrative Agent
By______________________
Authorized Officer
2
124
EXHIBIT E
FORM OF MONEY MARKET QUOTE
To: The Bank of New York,
as Administrative Agent
Re: Money Market Quote to Venator Group, Inc. (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, ______, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount**/ Period***/ [Margin****/] [Absolute Rate*****/]
--------- --------- ---------------------------------
$
[Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed$____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made
for $5,000,000 or a larger multiple of $1,000,000.
[notes continued on following page]
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125
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of April 9, 1997 and amended and restated as of March 19, 1999 among
Venator Group, Inc., the Banks party thereto, the Co-Agents party thereto, Bank
of America National Trust & Savings Association, as Documentation Agent, The
Bank of New York, as Administrative Agent (the "Administrative Agent"), LC Agent
and Swingline Bank and the Lead Arrangers party thereto (as amended from time to
time, the "Credit Agreement"), irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 14 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of
1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
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126
EXHIBIT F
SECURITY AGREEMENT
AGREEMENT dated as of __________, 1999 among Venator Group, Inc. a New York
corporation (with its successors, the "Company"), each of the Subsidiaries of
the Company listed on the signature pages hereof and each other Subsidiary of
the Company that may from time to time become a party hereto in accordance with
Section 20 (each, with its successors, a "Subsidiary Guarantor") and The Bank of
New York, as Administrative Agent (with its successors, the "Administrative
Agent").
W I T N E S S E T H :
WHEREAS, the Company, the banks party thereto (the "Banks"), the co- agents
party thereto, Bank of America National Trust & Savings Association, as
Documentation Agent, The Bank of New York, as Administrative Agent, LC Agent and
Swingline Bank and the Lead Arrangers party thereto are parties to a Credit
Agreement dated as of April 9, 1997 and amended and restated as of March 19,
1999 (as amended or amended and restated from time to time, the "Credit
Agreement"); and
WHEREAS, the Subsidiary Guarantors and the Administrative Agent are parties
to a Guarantee Agreement dated as of March 19, 1999 (as amended from time to
time, the "Guarantee Agreement"); and
WHEREAS, pursuant to Section 5.20 of the Credit Agreement, the Company has
agreed to enter into, and to cause each of its Subsidiaries (other than any
Foreign Subsidiary or any Immaterial Subsidiary) to enter into, a Security
Agreement substantially in the form hereof; and
WHEREAS, in consideration of the financial and other support that the
Company has provided, and such financial and other support as the Company may in
the future provide, to the Subsidiary Guarantors, the Subsidiary Guarantors are
willing to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
127
Section 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. The following additional terms, as used herein, have the following
respective meanings:
"Collateral" has the meaning specified in Section 3.
"Designated Foreign Jurisdiction" means, with respect to each Obligor, any
jurisdiction outside the United States where such Obligor conducts its
operations on and as of the date on which such Obligor becomes a party to this
Agreement.
"General Intangibles" means, with respect to each Obligor, all "general
intangibles" (as defined in the UCC) now owned or hereafter acquired by such
Obligor and consisting of copyrights, copyright licenses, Patents, Patent
Licenses, Trademarks, Trademark Licenses, rights in other intellectual property,
goodwill, trade names, service marks, trade secrets, and any rights of such
Obligor under any contract or agreement with respect to any of the foregoing.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement or other interest or currency exchange rate hedging
arrangement.
"Hedging Obligations" means, with respect to each Obligor, all obligations
of such Obligor under any Hedging Agreement between such Obligor and any Bank
Party (or any affiliate of any Bank Party).
"LC Collateral Account" has the meaning specified in Section 5(a).
"Liquid Investments" has the meaning specified in Section 5(c).
"Obligor" means the Company or any Subsidiary Guarantor, and "Obligors"
means all of them.
"Patents" means, with respect to each Obligor, (i) all letters patent of
the United States or any other country held by such Obligor, all registrations
and recordings thereof, and all applications by such Obligor for letters patent
of the United States or any other country, including registrations, recordings
and applications in the PTO or in any similar office or agency of the United
States or any other country or any political subdivision thereof, including
those described in the Perfection Certificate of such Obligor, and (ii) all
reissues, continuations, continuations-in-part or extensions thereof.
2
128
"Patent License" means, with respect to each Obligor, any written agreement
now or hereafter in existence granting to such Obligor any right to practice any
invention on which a patent (including without limitation a Patent of any other
Obligor) is in existence.
"Patent Security Agreement" means a Patent Security Agreement executed and
delivered by an Obligor in favor of the Administrative Agent, for the benefit of
the Secured Parties, substantially in the form of Exhibit B to this Agreement,
as the same may be amended from time to time.
"Perfection Certificate" means, with respect to each Obligor, a certificate
substantially in the form of Exhibit A hereto, completed and supplemented with
the schedules and attachments contemplated thereby to the satisfaction of the
Administrative Agent, and duly executed by a Responsible Officer of such
Obligor.
"Proceeds" means, with respect to each Obligor, all proceeds of, and all
other profits, products, rents or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or other realization upon, collateral pledged by such Obligor, including
without limitation all claims of such Obligor against third parties for loss of,
damage to or destruction of, or any past, present or future dilution,
infringement or unauthorized use of, unfair competition with, or violation of
intellectual property rights in connection with or injury to, any such
collateral or for injury to the goodwill associated with any of the foregoing,
in each case whether now existing or hereafter arising.
"PTO" means the United States Patent and Trademark Office.
"Secured Obligations" means, with respect to each Obligor, (i) all
principal of and interest and premium (if any) on any Loan or Swingline Loan
payable by such Obligor under, or any Note or Swingline Note issued by such
Obligor pursuant to, the Credit Agreement (including, without limitation, any
interest which accrues after or would accrue but for the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of such Obligor, whether or not allowed or allowable as a claim
in any such proceeding), (ii) all Reimbursement Obligations of such Obligor with
respect to any Letter of Credit issued pursuant to the Credit Agreement and all
interest payable by such Obligor thereon (including, without limitation, any
interest which accrues after or would accrue but for the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of such Obligor, whether or not allowed or allowable as a claim
in any such proceeding), (iii) if such Obligor is a Subsidiary Guarantor, all
3
129
amounts payable by such Obligor under the Guarantee Agreement, (iv) all other
amounts payable by such Obligor under the Loan Documents, (v) all Hedging
Obligations of such Obligor, and (vi) any amendments, restatements, renewals,
extensions or modifications of any of the foregoing; provided that the Secured
Obligations of each Subsidiary Guarantor described in clause (iii) above and any
amendment, restatement, renewal, extension or modification thereof described in
clause (vi) above (collectively, with respect to each Subsidiary Guarantor, such
Subsidiary Guarantor's "Subsidiary Guaranteed Obligations"), shall be
subordinate and junior in rank with respect to payment to the other Secured
Obligations of such Subsidiary Guarantor for purposes of this Security
Agreement. Pursuant to the proposed Amendment No. 4 to the Existing Credit
Agreement, upon satisfaction of the conditions precedent set forth therein, the
Credit Agreement will be amended and restated to include certain Subsidiaries of
the Company as borrowers under the Credit Agreement, and the parties hereto
agree that, upon effectiveness of such amendment and restatement, for purposes
of the definition of "Secured Obligations", the term "Obligors" will mean the
Company, any of its Subsidiaries that are borrowers under the Credit Agreement
and the Subsidiary Guarantors, and "Obligor" will mean any one of them.
"Secured Parties" means the Banks, the LC Agent, the Swingline Bank, the
Administrative Agent and the Lead Arrangers.
"Security Interests" means the security interests in the Collateral granted
hereunder securing the Secured Obligations.
"Specified Trademarks" means, with respect to each Obligor (i) the
Trademarks listed on Schedule 2B under such Obligor's name and (ii) any other
Trademark held by such Obligor registrered or to be registered by such Obligor
in the United States or any Trademark held by such Obligor and constituting the
name of a store used by such Obligor outside the United States.
"Specified Trademark License" means, with respect to each Obligor, any
Trademark License held by such Obligor with respect to any Specified Trademark
held by such Obligor.
"Trademarks" means, with respect to each Obligor, (i) all trademarks, trade
names, corporate names, company names, business names, logos, other source or
business identifiers, designs and general intangibles of like nature held by
such Obligor, and all applications in connection therewith, including
registrations, recordings and applications in the PTO or in any similar office
or agency of the United States, any State thereof or any other country or any
political subdivision thereof, including those described in the Perfection
4
130
Certificate of such Obligor, (ii) all extensions or renewals thereof and (iii)
the goodwill of the business symbolized by any of the foregoing.
"Trademark License" means, with respect to each Obligor, any written
agreement now or hereafter in existence granting to such Obligor any right to
use a Trademark (including without limitation a Trademark of any other Obligor).
"Trademark Security Agreement" means a Trademark Security Agreement
executed and delivered by an Obligor in favor of the Administrative Agent, for
the benefit of the Secured Parties, substantially in the form of Exhibit C to
this Agreement, as the same may be amended from time to time.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
Section 2. Representations and Warranties. Each Obligor represents and
warrants as follows:
(a) Such Obligor has good and marketable title to all of the Collateral,
free and clear of any Liens other than Liens permitted under Section 5.06(a)(ix)
of the Credit Agreement.
(b) Such Obligor has not performed any acts which could reasonably be
expected to prevent the Administrative Agent from enforcing any of the terms of
this Agreement or which would limit the Administrative Agent in any such
enforcement. Other than Patent Security Agreements, Trademark Security
Agreements, financing statements or other similar or equivalent documents or
instruments with respect to the Security Interests, no financing statement,
mortgage, security agreement or similar or equivalent document or instrument
covering all or any part of the Collateral of such Obligor and consisting of
Patents, Patent Licenses, Specified Trademarks and Specified Trademark Licences
is on file or of record in any jurisdiction or office (including without
limitation the PTO) in the United States or in any Designated Foreign
Jurisdiction with respect to such Obligor and in which such filing or recording
would be effective to perfect a Lien on such Collateral. No Collateral of such
Obligor is in the possession of any Person (other than such Obligor) asserting
5
131
any claim thereto or security interest therein, except that the Administrative
Agent or its designee may have possession of such Collateral as contemplated
hereby.
(c) Such Obligor has delivered its Perfection Certificate to the
Administrative Agent. The information specified therein is correct and complete.
Within 60 days after the date hereof, such Obligor shall furnish to the
Administrative Agent file search reports from the PTO confirming that a filing
with respect to each Patent and Patent License listed on Schedule 2A and held by
such Obligor on the date hereof and each Specified Trademark of such Obligor on
the date hereof and naming the Administrative Agent as secured party has been
made; provided that any failure of an Obligor timely to furnish any such report
caused by delay by the relevant office to respond to a request shall not
constitute a default by such Obligor of its obligations hereunder.
(d) Schedule 2A (as supplemented from time to time in accordance with
Section 4(c)) lists all Patents and Patent Licenses held by such Obligor.
Schedule 2B (as supplemented from time to time in accordance with Section 4(c))
lists all Specified Trademarks held by such Obligor and all Specified Trademark
Licenses held by such Obligor.
(e) The Security Interests in the Collateral of such Obligor constitute
valid security interests under the UCC securing the Secured Obligations of such
Obligor. When UCC financing statements in the form specified in Exhibit A shall
have been filed in the offices specified in the Perfection Certificate of such
Obligor, the Security Interests shall constitute perfected security interests in
the Collateral of such Obligor in which a security interest may be perfected by
filing under the UCC (but excluding in any event any Collateral of such Obligor
described in the succeeding sentences of this subsection (e)), prior to all
other Liens and rights of others therein. When a Patent Security Agreement of
such Obligor has been recorded with the PTO, such Security Interests shall
constitute perfected Security Interests in all right, title and interest of such
Obligor in the Patents listed in Schedule 1 to such Agreement, prior to all
other Liens and rights of others therein. When a Trademark Security Agreement of
such Obligor has been recorded with the PTO, such Security Interests shall
constitute perfected Security Interests in all right, title and interest of such
Obligor in the Trademarks listed in Schedule 1 to such Agreement, prior to all
other Liens and rights of others therein.
Section 3. The Security Interests. (a) In order to secure the full and
punctual payment of its Secured Obligations in accordance with the terms
thereof, each Obligor grants to the Administrative Agent for the ratable benefit
of the Secured Parties a continuing security interest in and to all of the
following property of such Obligor, whether now owned or existing or hereafter
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acquired or arising and regardless of where located (all being collectively
referred to as the "Collateral" of such Obligor):
(i) General Intangibles;
(ii) Patents and Patent Licenses;
(iii) Trademarks and Trademark Licenses;
(iv) The LC Collateral Account, all cash deposited therein from time
to time, and any Liquid Investments made pursuant to Section
5(c);
(v) All books and records (including, without limitation, computer
programs, printouts and other computer materials and records) of
such Obligor pertaining to any of its Collateral described in
clauses (i) thorough (iv) hereof; and
(vi) All Proceeds of the Collateral described in clauses (i) through
(v) hereof.
(b) The Security Interests are granted as security only and shall not
subject the Administrative Agent or any Secured Party to, or transfer or in any
way affect or modify, any obligation or liability of any Obligor with respect to
any of the Collateral or any transaction in connection therewith.
Section 4. Further Assurances; Covenants. (a) Each Obligor will not change
its name, identity or corporate structure in any manner or change the location
of its chief executive office or chief place of business from the location
described in the Perfection Certificate of such Obligor unless, in each case,
such Obligor shall have given the Administrative Agent at least 30 day's prior
notice thereof and delivered to the Banks an opinion of counsel at the cost and
expense of such Obligor, in form and substance reasonably satisfactory to the
Administrative Agent, to the effect that, after giving effect to such change in
name, identity, corporate structure or location, the Security Interests in the
Collateral of such Obligor shall remain perfected; provided that the provisions
of the foregoing sentence shall not apply to any change in the location of the
chief executive office of any Obligor from any location in New York City to any
other location in New York City. Each Obligor shall not in any event change the
location of any of its Collateral if such change would cause the Security
Interests in such Collateral to lapse or cease to be perfected.
(b) Each Obligor will, from time to time, at its expense, execute, deliver,
file and record any statement, assignment, instrument, document, agreement,
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recording or other paper and take any other action (including, without
limitation, any filings of financing or continuation statements under the UCC
and any additional of substitute filings with the PTO) that from time to time
may be necessary or desirable, or that the Administrative Agent may request, in
order to create, preserve, perfect, confirm or validate the Security Interests
or to enable the Secured Parties to obtain the full benefits of this Agreement,
or to enable the Administrative Agent to exercise and enforce any of its rights,
powers and remedies hereunder with respect to any of the Collateral of such
Obligor; provided that no Obligor shall be required to take any such action with
respect to any Trademark that is not a Specified Trademark or any Trademark
License that is not a Specified Trademark License. To the extent permitted by
applicable law, each Obligor hereby authorizes the Administrative Agent to
execute and file financing statements or continuation statements without such
Obligor's signature appearing thereon. Each Obligor agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement. Each Obligor shall
pay the costs of, or incidental to, any recording or filing of any financing or
continuation statements or any filings with the PTO concerning the Collateral of
such Obligor.
(c) Within 30 Domestic Business Days after the end of each Fiscal Quarter,
each Obligor shall provide to the Administrative Agent (i) copies of all
applications for (1) the registration of any Patent or any Patent License and
(2) the registration of any Specified Trademark or Specified Trademark License
filed by such Obligor during such Fiscal Quarter, (ii) a Patent Security
Agreement executed by such Obligor with respect to each Patent or Patent License
of such Obligor described in clause (1), (iii) a Trademark Security Agreement
with respect to each Specified Trademark and Specified Trademark License
described in clause (2) and (iv) a list of each Patent and Trademark that such
Obligor has determined to abandon, or that such Obligor has determined not to
maintain the registration of, during the immediately succeeding Fiscal Quarter,
and a brief statement of the reasons on the basis on which such Obligor has made
such determination (it being understood that nothing in this clause (iv) shall
be construed to limit or modify in any manner the obligations of such Obligor
under subsection (d) below). Upon delivery of a Patent Security Agreement or a
Trademark Security Agreement by any Obligor, Schedule 2A or 2B, as the case may
be, shall be deemed to have been amended to reflect the Patents and Patent
Licenses or Specified Trademarks and Specified Trademark Licences with respect
to which such Patent Security Agreement or a Trademark Security Agreement, as
the case may be, relates. If an Obligor has filed no applications for the
registration of any Patent, License, Specified Trademark or Specified Trademark
License during any Fiscal Quarter, such Obligor shall, within 30 Domestic
Business Days after the end of such Fiscal Quarter, provide a certificate to the
Administrative Agent certifying the same.
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(d) Each Obligor will take all steps which it reasonably determines are
necessary and appropriate in the circumstances, including, without limitation,
in any proceeding before the PTO, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of its material Patents and Specified Trademarks, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability except, in each case, for such applications or
registrations which such other Obligor determines in good faith are no longer
useful or material to the business of such Obligor.
(e) In the event that any material Patent or Specified Trademark is
infringed, misappropriated or diluted by a third party, the Obligor that holds
such Patent or Trademark shall promptly notify the Administrative Agent after it
learns thereof, if such infringement, misappropriation or dilution could
reasonably be expected to have a Material Adverse Effect, and take such other
actions as such Obligor shall reasonably deem appropriate under the
circumstances, or as the Administrative Agent shall reasonably request, to
protect such Patent or Specified Trademark, as the case may be.
(f) Each Obligor shall notify the Administrative Agent as soon as
practicable if such Obligor knows that any application or registration relating
to any material Patent or Specified Trademark may become abandoned or dedicated
or of any determination or development (including the institution of, or any
such determination or development in, any proceeding in the PTO or any court or
tribunal) regarding such Obligor's ownership of any material Patent or Specified
Trademark, its right to register the same, or to keep and maintain the same.
(g) Each Obligor will, promptly upon request, provide to the Administrative
Agent all information and evidence it may reasonably request concerning its
Collateral to enable the Administrative Agent to enforce the provisions of this
Agreement.
Section 5. LC Collateral Account. (a) There is hereby established with the
Administrative Agent an account (the "LC Collateral Account") on the books of
The Bank of New York in the name and under the control of the Administrative
Agent into which there shall be deposited from time to time the amounts required
to be deposited therein by the Company pursuant to Sections 2.06(f) and 6.03 of
the Credit Agreement or any other provision of the Loan Documents. Any income
received by the Administrative Agent with respect to the balance from time to
time standing to the credit of the LC Collateral Account, including any interest
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or capital gains on Liquid Investments, shall remain, or be deposited, in the LC
Collateral Account. All right, title and interest in and to the cash amounts on
deposit from time to time in the LC Collateral Account together with any Liquid
Investments from time to time made pursuant to subsection (c) hereof shall
constitute part of the Collateral hereunder and shall not constitute payment of
the Secured Obligations until applied thereto as hereinafter provided. If and
when any portion of Aggregate LC Exposure on which any deposit in the LC
Collateral Account was based (the "Relevant Contingent Exposure") shall become
fixed (a "Direct Exposure") as a result of the payment by the LC Agent of a
draft presented under a Letter of Credit, the amount of such Direct Exposure
(but not more than the amount in the LC Collateral Account at the time) shall be
withdrawn by the Administrative Agent from the LC Collateral Account and shall
be paid to the Banks in accordance with their Pro Rata Share, and the Relevant
Contingent Exposure shall thereupon be reduced by such amount. If at any time
the amount in the LC Collateral Account exceeds the aggregate Relevant
Contingent Exposure, the excess amount shall, so long as no Event of Default
shall have occurred and be continuing, be promptly withdrawn by the
Administrative Agent and paid to, or as directed by, the Company. If an Event of
Default shall have occurred and be continuing, such excess amount shall be
retained in the LC Collateral Account. If immediately available cash on deposit
in the LC Collateral Account is not sufficient to make any distribution to, or
as directed by, the Company referred to in this Section 5(a), the Administrative
Agent shall cause to be liquidated as promptly as practicable such Liquid
Investments in the LC Collateral Account designated by the Company as required
to obtain sufficient cash to make such distribution and, notwithstanding any
other provision of this Section 6, such distribution shall not be made until
such liquidation has taken place.
(b) Upon the occurrence and continuation of an Event of Default, the
Administrative Agent shall, if so instructed by the Required Banks, apply or
cause to be applied (subject to collection) any or all of the balance from time
to time standing to the credit of the LC Collateral Account in the manner
specified in Section 9.
(c) Amounts on deposit in the LC Collateral Account shall be invested and
re-invested from time to time in such Liquid Investments as the Company shall
determine, which Liquid Investments shall be held in the name and be under the
control of the Administrative Agent, provided that, if an Event of Default has
occurred and is continuing, the Administrative Agent shall, if instructed by the
Required Banks, determine the Liquid Investments in which such amounts are
invested and re-invested and shall liquidate any such Liquid Investments and
apply or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 9. For this purpose, "Liquid
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Investments" means Temporary Cash Investments of the type described in clauses
(i) through (iv) of the definition thereof; provided that (x) each Liquid
Investment shall mature within 30 days after it is acquired by the
Administrative Agent and (y) in order to provide the Administrative Agent, for
the benefit of the Secured Parties, with a perfected security interest therein,
each Liquid Investment shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Administrative Agent, which
(together with any appropriate instruments of transfer) are delivered to,
and held by, the Administrative Agent or an agent thereof (which shall not
be the Company or any of its Affiliates) in the State of New York; or
(ii) in book-entry form and issued by the United States and as to
which (in the opinion of counsel to the Administrative Agent) appropriate
measures shall have been taken for perfection of the Security Interests in
such Liquid Investments.
Section 6. General Authority. Each Obligor hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Obligor, the Administrative Agent, the Secured
Parties or otherwise, for the sole use and benefit of the Secured Parties, but
at such Obligor's expense, to the extent permitted by law to exercise, at any
time and from time to time while an Event of Default has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral of such Obligor:
(a) to demand, xxx for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the
Administrative Agent were the absolute owner thereof,
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto, and
(e) in the case of any Patents or Trademarks or any other rights which
constitute patents or trademarks under common law (all such patents and
trademarks hereinafter being referred to as "Common Law Rights"), to
execute and deliver any and all agreements, instruments,
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documents, and papers as the Administrative Agent may reasonably require to
evidence the Security Interests in any such Patent, Trademark or Common Law
Rights and the goodwill and general intangibles of such Obligor relating
thereto or represented thereby;
provided that the Administrative Agent shall give each Obligor not less than ten
days' prior notice of the time and place of any sale or other intended
disposition of any of its Collateral. The Administrative Agent and each Obligor
agree that such notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the UCC.
Section 7. Remedies upon Event of Default. (a) If any Event of Default has
occurred and is continuing, the Administrative Agent may exercise on behalf of
the Secured Parties all rights of a secured party under the UCC (whether or not
in effect in the jurisdiction where such rights are exercised) and, in addition,
the Administrative Agent may, without being required to give any notice, except
as herein provided or as may be required by mandatory provisions of law, (i)
apply cash, if any, then held by it as Collateral as specified in Section 9 and
(ii) if there shall be no such cash or if such cash shall be insufficient to pay
all the Secured Obligations in full, sell the Collateral or any part thereof at
public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Administrative Agent may deem satisfactory. Any
Secured Party may be the purchaser of any or all of the Collateral so sold at
any public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale). Each Obligor will execute and
deliver such documents and take such other action as the Administrative Agent
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Administrative Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Obligor which may be waived, and each
Obligor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 6 shall (A) in the case of a public sale, state the time and place fixed
for such sale, and (B) in the case of a private sale, state the day after which
such sale may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Administrative Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Administrative Agent may determine. The Administrative Agent shall not be
obligated to make any such sale pursuant to any such notice. The Administrative
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Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned ,subject to the Administrative Agent giving
the notice required to be given pursuant to Section 6. In the case of any sale
of all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the selling
price is paid by the purchaser thereof, but the Administrative Agent shall not
incur any liability in the case of the failure of such purchaser to take up and
pay for the Collateral so sold and, in the case of any such failure, such
Collateral may again be sold upon like notice. The Administrative Agent, instead
of exercising the power of sale herein conferred upon it, may proceed by a suit
or suits at law or in equity to foreclose the Security Interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies under this
Agreement the Administrative Agent may (i) require each Obligor to, and each
Obligor agrees that it will, at its expense and upon the request of the
Administrative Agent, forthwith assemble all or any part of its Collateral as
directed by the Administrative Agent and make it available at a place designated
by the Administrative Agent which is, in its opinion, reasonably convenient to
the Administrative Agent and such Obligor, whether at the premises of such
Obligor or otherwise, (ii) have access to and use such Obligor's books and
records relating to the Collateral and (iii) prior to the disposition of the
Collateral, prepare the Collateral for disposition in any manner and to the
extent the Administrative Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any Trademark, Patent, copyright
or technical process used by any Obligor. The Administrative Agent may also
render any or all of the Collateral unusable at any Obligor's premises and may
dispose of such Collateral on such premises without liability for rent or costs.
(c) Without limiting the generality of the foregoing, if any Event of
Default has occurred and is continuing, (i) the Administrative Agent may
license, or sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any Patents or Trademarks or Common Law Rights
included in the Collateral throughout the world for such term or terms, on such
conditions and in such manner as the Administrative Agent shall in its sole
discretion determine, (ii) the Administrative Agent may (without assuming any
obligations or liability thereunder), at any time and from time to time, enforce
(and shall have the exclusive right to enforce) against any licensor, licensee
or sublicensee all rights and remedies of any Obligor in, to and under any
Patent Licenses or Trademark Licenses and take or refrain from taking any action
under any thereof, and each Obligor hereby releases the Administrative Agent and
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each of the other Secured Parties from, and agrees to hold the Administrative
Agent and each of the other Secured Parties free and harmless from and against
any claims arising out of, any lawful action so taken or omitted to be taken
with respect thereto, except any such claim to the extent that it arises solely
as the result of the gross negligence or willful misconduct of any Secured Party
and (iii) upon request by the Administrative Agent, each Obligor will execute
and deliver to the Administrative Agent a further power of attorney, in form and
substance satisfactory to the Administrative Agent, for the implementation of
any lease, assignment, license, sublicense, grant of option, sale or other
disposition of a Patent, Trademark, Patent License or Trademark License. In the
event of any such disposition pursuant to this Section, each Obligor shall
supply its know-how and expertise relating to the manufacture and sale of the
products bearing Trademarks or the products or services made or rendered in
connection with Patents, and its customer lists and other records relating to
such Patents or Trademarks and to the distribution of said products, to the
Administrative Agent.
Section 8. Limitation on Duty of Administrative Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Administrative Agent in good
faith.
Section 9. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral pledged by any Obligor and
any cash held in the LC Collateral Account shall be applied by the
Administrative Agent in the following order of priorities:
first, to pay the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the
Administrative Agent, and all expenses, liabilities and advances incurred
or made by the Administrative Agent in connection therewith, and any other
unreimbursed expenses for which any Secured Party is to be reimbursed
pursuant to the Credit Agreement (including without limitation Section
9.03(a) thereof) or Section 12 hereof and any unpaid fees owing to any
Secured Party under the Loan Documents;
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second, to the ratable payment of accrued but unpaid interest on the
Secured Obligations of such Obligor (other than, in the case of any
Subsidiary Guarantor, its Subsidiary Guaranteed Obligations) in accordance
with the provisions of the Credit Agreement;
third, to the ratable payment of unpaid principal of, and
reimbursement obligations constituting, the Secured Obligations of such
Obligor (other than, in the case of any Subsidiary Guarantor, its
Subsidiary Guaranteed Obligations);
fourth, in the case of any Subsidiary Guarantor, to the ratable
payment of accrued but unpaid interest on its Subsidiary Guaranteed
Obligations, until all such Secured Obligations shall have been paid in
full;
fifth, in the case of any Subsidiary Guarantor, to the ratable payment
of unpaid principal of, and reimbursement obligations constituting its
Subsidiary Guaranteed Obligations, until all such Secured Obligations shall
have been paid in full;
sixth, to pay ratably all other Secured Obligations, until all Secured
Obligations shall have been paid in full; and
finally, to pay to such Obligor or its successors or assigns, or as a
court of competent jurisdiction may direct, any surplus then remaining from
such proceeds.
The Administrative Agent may make distributions hereunder in cash or in kind or,
on a ratable basis, in any combination thereof. For purposes of making any
distribution hereunder, the principal amount of any Hedging Obligation shall be
the amount of the relevant Obligor's Hedging Obligations due and payable at the
time such distribution is made.
Section 10. Concerning the Administrative Agent. The provisions of Article
7 of the Credit Agreement shall inure to the benefit of the Administrative Agent
in respect of this Agreement and shall be binding upon the parties to the Credit
Agreement and the parties hereto in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Administrative Agent
therein specified:
(a) The Administrative Agent is authorized to take all such action as is
provided to be taken by it as Administrative Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly provided
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for herein (including, without limitation, the timing and methods of realization
upon the Collateral) the Administrative Agent shall act or refrain from acting
in accordance with written instructions from the Required Banks or, in the
absence of such instructions, in accordance with its discretion.
(b) The Administrative Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interests in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder. The Administrative Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement by any Obligor.
Section 11. Appointment of Co-Administrative Agents. At any time or times,
in order to comply with any legal requirement in any jurisdiction, the
Administrative Agent may appoint another bank or trust company or one or more
other persons, either to act as co-agent or co-agents, jointly with the
Administrative Agent, or to act as separate agent or agents on behalf of the
Secured Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Administrative
Agent, include provisions for the protection of such co-agent or separate agent
similar to the provisions of Section 10).
Section 12. Expenses. If any Obligor fails to comply with the provisions of
any Loan Document to which it is a party, such that the value of any Collateral
or the validity, perfection, rank or value of any Security Interest is thereby
diminished or potentially diminished or put at risk, the Administrative Agent if
requested by the Required Banks may, but shall not be required to, effect such
compliance on behalf of such Obligor, and such Obligor shall reimburse the
Administrative Agent for the costs thereof on demand. All insurance expenses and
all expenses of protecting, storing, warehousing, appraising, insuring,
handling, maintaining, and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, or local authority
on any of the Collateral, or in respect of periodic appraisals and inspections
of the Collateral to the extent the same may be requested by the Required Banks
from time to time, or in respect of the sale or other disposition thereof shall
be borne and paid by each Obligor; and if any Obligor fails to promptly pay any
portion thereof when due, any Secured Party may, at its option, but shall not be
required to, pay the same and charge such Obligor's account therefor, and such
Obligor agrees to reimburse such Secured Party therefor on demand. All sums so
paid or incurred by any Secured Party for any of the foregoing and any and all
other sums for which any Obligor may become liable hereunder and all costs and
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expenses (including attorneys' fees, legal expenses and court costs) reasonably
incurred by any Secured Party in enforcing or protecting the Security Interests
or any of their rights or remedies under this Agreement and, in each case, not
paid in a timely manner shall, together with interest thereon until paid at the
rate applicable to Base Rate Loans, be additional Secured Obligations hereunder.
Section 13. Termination of Security Interests; Release of Collateral. (a)
Upon the repayment in full of all Secured Obligations (other than those
described in clause (v) of the definition thereof and any amendments,
restatements, renewals, extensions or modifications thereof), the termination of
the Commitments under the Credit Agreement and the termination or cancellation
of all Letters of Credit (unless such Letters of Credit have been fully cash
collateralized pursuant to arrangements satisfactory to the LC Agent, or back-
stopped by a separate letter of credit, in form and substance and issued by an
issuer satisfactory to the LC Agent), the Security Interests shall terminate and
all rights to the Collateral of each Obligor shall revert to such Obligor.
(b) Upon the consummation of any Asset Sale (or any sale or other
disposition described in clause (iv) of the definition of Asset Sale) permitted
by the terms of the Credit Agreement and consisting of the disposition of any
Collateral or of the capital stock of any Obligor other than the Company (any
such transaction, a "Permitted Collateral Sale") the Security Interests in such
Collateral or in the Collateral pledged by such Obligor, as the case may be (but
not, in any case, in any Proceeds thereof) shall be released. Such release shall
not be subject to the consent of any Bank, and the Administrative Agent shall be
fully protected in relying on a certificate of an Obligor as to whether any
particular transaction consummated by such Obligor constitutes a Permitted
Collateral Sale.
(c) In addition to the release of Collateral effected by subsection (b), at
any time and from time to time prior to the termination of the Security
Interests, the Administrative Agent may release any of the Collateral with the
prior written consent of the Required Banks; provided that the Administrative
Agent may release of all or substantially all of the Collateral (for purposes of
this subsection (c), as defined in the Credit Agreement) only with the prior
written consent of all the Banks.
(d) Upon any termination of the Security Interests or release of Collateral
in accordance with this Section, the Administrative Agent will, at the expense
of the relevant Obligor, execute and deliver to such Obligor such documents as
such Obligor shall reasonably request (including without limitation any
reassignments) to evidence the termination of the Security Interests or the
release of such Collateral, as the case may be.
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Section 14. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth on the
signature pages hereof or at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Company. Each such notice, request or other communication shall be
effective (i) if given by facsimile, when transmitted to the facsimile number
referred to in this Section and confirmation of receipt is received, or (ii) if
given by any other means, when delivered at the address referred to in this
Section.
Section 15. Waivers, Non-Exclusive Remedies. No failure on the part of the
Administrative Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Administrative
Agent of any right under this Agreement or any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other remedies provided by law.
Section 16. Successors and Assigns. This Agreement shall be binding upon
each Obligor and its successors and permitted assigns. This Agreement is for the
benefit of each Secured Party and its successors and permitted assigns, and in
the event of an assignment of all or any of any Bank's interest in and to its
rights and obligations under the Credit Agreement in accordance with the Credit
Agreement, the assignor's rights hereunder, to the extent applicable to the
indebtedness or obligation so assigned, shall automatically be transferred with
such indebtedness or obligation.
Section 17. Changes in Writing. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by each Obligor and the Administrative Agent, subject to the provisions
of Section 9.05(b) of the Credit Agreement.
Section 18. New York Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed by the
laws of such jurisdiction.
Section 19. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Parties in
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144
order to carry out the intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 20. Additional Obligors. Any Subsidiary Guarantor may become an
Obligor party hereto and bound hereby by executing a counterpart hereof and
delivering the same to the Administrative Agent.
Section 21. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 22. Limitation on Collateral. Notwithstanding the foregoing,
"Collateral" shall not include any General Intangibles or other rights arising
under contracts which contain a valid and enforceable restriction on the grant
of a security interest therein (other than any such restriction which is
rendered ineffective pursuant to Section 9-318(4) of the UCC) to the extent such
grant would constitute a violation of such restriction, unless and until any
such restriction is removed, waived or no longer valid and enforceable. Each
Obligor represents and warrants that none of the Trademarks listed on Schedule
1.01(b) is subject to any such restriction.
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145
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VENATOR GROUP, INC.
By:_________________________
Name:
Title:
EASTBAY, INC.
eVENATOR, INC.
FOOT LOCKER JAPAN, INC.
NORTHERN REFLECTIONS INC.
RETAIL COMPANY OF GERMANY,
INC.
THE XXXXXXX BROTHERS COMPANY
ROBBY'S SPORTING GOODS, INC.
TEAM EDITION APPAREL, INC.
THE SAN FRANCISCO MUSIC BOX
COMPANY
VENATOR GROUP CORPORATE
SERVICES, INC.
VENATOR GROUP HOLDINGS, INC.
VENATOR GROUP RETAIL, INC.
VENATOR GROUP SOURCING, INC.
VENATOR GROUP SPECIALITY, INC.
By:___________________________
Name:
Title:
20
000
XXX XXXX XX XXX XXXX, as
Administrative Agent
By:_________________________________
Name:
Title:
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147
SCHEDULE 2A
Patents & Patent Licenses
[to come]
22
148
SCHEDULE 2B
Trademark & Trademark Licenses
[to come]
23
149
EXHIBIT A
TO SECURITY AGREEMENT
PERFECTION CERTIFICATE
The undersigned, an officer of [NAME OF OBLIGOR], a _______________
corporation (the "Obligor"), hereby certify with reference to the Security
Agreement dated as of _____, 1999 among Venator Group, Inc., the Obligor and the
other Subsidiaries party thereto and The Bank of New York, as Administrative
Agent (terms defined therein being used herein as therein defined), to the
Secured Parties as follows:
1. Names. (a) The exact corporate name of the Obligor as it appears in its
certificate of incorporation is as follows:
(b) Specified below is each other corporate name (including trade names or
similar appellations) the Obligor has had in the last five years:
(c) Except as specified in Schedule 1, the Obligor has not changed its
identity or corporate structure in any way within the past five years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature
or jurisdiction of corporate organization. If any such change has occurred,
include in Schedule 1 the information required by paragraphs 1, 2 and 3 of
this certificate as to each acquiree or constituent party to a merger or
consolidation.]
2. Current Locations. (a) The chief executive office of the Obligor is
located at the following address:
Mailing Address County State
------------------------------------- ---------------------- --------------
150
(b) The following are all the places of business of the Obligor not
identified above:
Mailing Address County State
------------------------------------- ---------------------- --------------
3. Prior Locations. (a) Specified below is the information required by
subparagraphs 2(a) and 2(b) above with respect to each location or place of
business maintained by the Obligor at any time during the past five years:
4. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 4(A) hereto has been delivered to the
Administrative Agent for filing in the Uniform Commercial Code filing office in
each jurisdiction identified in paragraph 2 hereof. .
5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule setting
forth filing information with respect to the filings described in paragraph 4
above.
6. Filing Fees. All filing fees and taxes payable in connection with the
filings described in paragraph 6 above have been paid.
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IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
________________, 1999.
By: _______________________
Name:
Title:
3
152
SCHEDULE 4(A)
DESCRIPTION OF COLLATERAL
[to include the description of "Collateral"
set forth in the Security Agreement and related definitions]
153
SCHEDULE 5
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing 1/
----------- ---------------- --------------- -----------------
-------------------
1 Indicate lapse date, if other than fifth anniversary.
154
EXHIBIT B TO
SECURITY AGREEMENT
FORM OF PATENT SECURITY AGREEMENT
WHEREAS, [Name of Obligor], a _____________ corporation (herein referred to
as "Grantor") owns, or in the case of licenses, is a party to, the Patent
Collateral (as defined below);
WHEREAS, Venator Group, Inc., the banks party thereto, the co-agents party
thereto, Bank of America National Trust & Savings Association, as Documentation
Agent, The Bank of New York, as Administrative Agent, LC Agent and Swingline
Bank and the Lead Arrangers party thereto are parties to a Credit Agreement
dated as of April 9, 1997 and amended and restated as of March 19, 1999 (as
amended or amended and restated from time to time, the "Credit Agreement"); and
WHEREAS, pursuant to the terms of a related Security Agreement dated as of
_____________, 1999 (as amended from time to time, the "Security Agreement")
among Venator Group, Inc., its Subsidiaries party thereto and The Bank of New
York, as Administrative Agent for the Secured Parties referred to therein (in
such capacity, together with its successors in such capacity, "Grantee"),
Grantor has granted to Grantee for the benefit of such Secured Parties a
continuing security interest in and to the assets of Grantor specified therein,
including all right, title and interest of Grantor in and to the Patent
Collateral, whether now owned or existing or hereafter acquired or arising, to
secure the Secured Obligations (as defined in the Security Agreement) of
Grantor;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, to secure the Secured Obligations, a continuing security interest in
and to all of Grantor's right, title and interest in and to the following (all
of the following items or types of property being herein collectively referred
to as the "Patent Collateral"), whether now owned or existing or hereafter
acquired or arising:
(i) each Patent (as defined in the Security Agreement) owned by Grantor,
including, without limitation, each U.S. Patent and Patent application referred
to in Schedule 1 hereto;
(ii) each Patent License (as defined in the Security Agreement), including,
without limitation, each Patent License identified in Schedule 1 hereto; and
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155
(iii) all proceeds of, and all other profits, products, rents or receipts,
in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Patent Collateral described in clauses (i) and (ii), including without
limitation all claims against third parties for loss of, damage to or
destruction of, or any past, present or future dilution, infringement or
unauthorized use of, unfair competition with, or violation of intellectual
property rights in connection with or injury to, any such collateral or for
injury to the goodwill associated with any of the foregoing, in each case
whether now existing or hereafter arising.
Grantor hereby irrevocably constitutes and appoints Grantee and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the name of Grantor or in its
name, from time to time, in Grantee's discretion, so long as an Event of Default
has occurred and is continuing, to take with respect to the Patent Collateral
any and all appropriate action which is permitted under the Security Agreement.
The foregoing security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Patent Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
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156
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to be
duly executed by its officer thereunto duly authorized as of the ___th day of
_______________.
[NAME OF GRANTOR]
By:________________________
Name:
Title:
Acknowledged:
THE BANK OF NEW YORK,
as Administrative Agent
By: ___________________
Name:
Title:
3
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
I, ___________________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that ______________________,
_________________________ of [NAME OF GRANTOR], personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such
__________, appeared before me this day in person and acknowledged that he
signed, executed and delivered the said instrument as his own free and voluntary
act and as the free and voluntary act of said Company, for the uses and purposes
therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this __th day of __________.
[Seal]
__________________________
Signature of notary public
My Commission expires
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158
Schedule 1
to Patent
Security Agreement
U.S. PATENT REGISTRATIONS
-------------------------
Registration No. Registration Date Xxxx
--------------- -------------------- -----
1
159
EXCLUSIVE PATENT LICENSES
--------- ------ --------
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
--------- ----------------- ----------- ---------
As Licensee
-- --------
As Licensor
-- --------
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160
EXHIBIT C TO
SECURITY AGREEMENT
FORM OF TRADEMARK SECURITY AGREEMENT
WHEREAS, [Name of Obligor], a _____________ corporation (herein referred to
as "Grantor") owns, or in the case of licenses, is a party to, the Trademark
Collateral (as defined below);
WHEREAS, Venator Group, Inc., the banks party thereto, the co-agents party
thereto, Bank of America National Trust & Savings Association, as Documentation
Agent, The Bank of New York, as Administrative Agent, LC Agent and Swingline
Bank and the Lead Arrangers party thereto are parties to a Credit Agreement
dated as of April 9, 1997 and amended and restated as of March 19, 1999 (as
amended or amended and restated from time to time, the "Credit Agreement"); and
WHEREAS, pursuant to the terms of a related Security Agreement dated as of
_____________, 1999 (as amended from time to time, the "Security Agreement")
among Venator Group, Inc., its Subsidiaries party thereto and The Bank of New
York, as Administrative Agent for the Secured Parties referred to therein (in
such capacity, together with its successors in such capacity, "Grantee"),
Grantor has granted to Grantee for the benefit of such Secured Parties a
continuing security interest in and to the assets of Grantor specified therein,
including all right, title and interest of Grantor in and to the Patent
Collateral, whether now owned or existing or hereafter acquired or arising, to
secure the Secured Obligations (as defined in the Security Agreement) of
Grantor;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, to secure the Secured Obligations, a continuing security interest in
all of Grantor's right, title and interest in, to and under the following (all
of the following items or types of property being herein collectively referred
to as the "Trademark Collateral"), whether now owned or existing or hereafter
acquired or arising:
(i) each Trademark (as defined in the Security Agreement) owned by Grantor,
including, without limitation, each U.S. Trademark registration and application
referred to in Schedule 1 hereto, and the goodwill of the business symbolized
by, each Trademark;
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161
(ii) each Trademark License (as defined in the Security Agreement),
including, without limitation, each Trademark License identified in Schedule 1
hereto; and
(iii) all proceeds of, and all other profits, products, rents or receipts,
in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Trademark Collateral described in clauses (i) and (ii), including without
limitation all claims against third parties for loss of, damage to or
destruction of, or any past, present or future dilution, infringement or
unauthorized use of, unfair competition with, or violation of intellectual
property rights in connection with or injury to, any such collateral or for
injury to the goodwill associated with any of the foregoing, in each case
whether now existing or hereafter arising.
Grantor hereby irrevocably constitutes and appoints Grantee and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full power and authority in the name of Grantor or in its
name, from time to time, in Grantee's discretion, so long as an Event of Default
has occurred and is continuing, to take with respect to the Trademark Collateral
any and all appropriate action which is permitted under the Security Agreement.
The foregoing security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Trademark Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
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162
IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement to
be duly executed by its officer thereunto duly authorized as of the ___th day of
_______________.
[NAME OF GRANTOR]
By: _____________________
Name:
Title:
Acknowledged:
THE BANK OF NEW YORK,
as Administrative Agent
By:_____________________
Name:
Title:
3
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
I, ___________________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that ______________________,
_________________________ of [NAME OF GRANTOR], personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such
__________, appeared before me this day in person and acknowledged that he
signed, executed and delivered the said instrument as his own free and voluntary
act and as the free and voluntary act of said Company, for the uses and purposes
therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this __th day of __________.
[Seal]
__________________________
Signature of notary public
My Commission expires
1
164
Schedule 1
to Trademark
Security Agreement
U.S. TRADEMARK REGISTRATIONS
------------------------------
Registration No. Registration Date Xxxx
--------------- ----------------- ------
1
165
EXCLUSIVE TRADEMARK LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
--------- ----------------- ---------- -------
As Licensee
-----------
As Licensor
------------
2
166
EXHIBIT G
PLEDGE AGREEMENT
AGREEMENT dated as of ____________, 1999 among Venator Group, Inc. a New
York corporation (with its successors, the "Company"), each of the Subsidiaries
of the Company listed on the signature pages hereof and each other Subsidiary of
the Company that may from time to time become a party hereto in accordance with
Section 23 (each, with its successors, a "Subsidiary Guarantor") and The Bank of
New York, as Administrative Agent (with its successors, the "Administrative
Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company, the banks party thereto (the "Banks"), the co- agents
party thereto, Bank of America National Trust & Savings Association, as
Documentation Agent, The Bank of New York, as Administrative Agent, LC Agent and
Swingline Bank and the Lead Arrangers party thereto are parties to a Credit
Agreement dated as of April 9, 1997 and amended and restated as of March 19,
1999 (as amended or amended and restated from time to time, the "Credit
Agreement"); and
WHEREAS, the Subsidiary Guarantors and the Administrative Agent are parties
to a Guarantee Agreement dated as of March 19, 1999 (as amended from time to
time, the "Guarantee Agreement"); and
WHEREAS, pursuant to Section 5.20 of the Credit Agreement, the Company has
agreed to enter into, and to cause each of its Subsidiaries (subject to certain
exceptions set forth in the Credit Agreement) to enter into, a Pledge Agreement
substantially in the form hereof; and
WHEREAS, in consideration of the financial and other support that the
Company has provided, and such financial and other support as the Company may in
the future provide, to the Subsidiary Guarantors, the Subsidiary Guarantors are
willing to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
167
Section 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein. The following additional terms, as used herein, have the following
respective meanings:
"Cash Distributions" means dividends and other payments and distributions
made upon or with respect to the Pledged Stock in cash.
"Collateral" has the meaning assigned to such term in Section 3(a).
"Direct Subsidiary" means, with respect to each Obligor, any Subsidiary of
such Obligor whose capital stock or other equity interests are owned directly by
such Obligor.
"Excluded Subsidiary" means, with respect to each Obligor, any Direct
Subsidiary of such Obligor other than any such Direct Subsidiary which neither
transacts any substantial portion of its business nor regularly maintains any
substantial portion of its fixed assets within the United States, Canada or
Germany. An "Excluded Subsidiary" shall cease to be an "Excluded Subsidiary"
when the conditions set forth in the first sentence of Section 3(d) are
satisfied.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement or other interest or currency exchange rate hedging
arrangement.
"Hedging Obligations" means, with respect to each Obligor, all obligations
of such Obligor under any Hedging Agreement between such Obligor and any Bank
Party (or any affiliate of any Bank Party).
"Issuer" means each Person listed on Schedule 1 and each Person that
becomes a Direct Subsidiary (other than an Excluded Subsidiary) of any Obligor
after the Effective Date.
"Obligor" means the Company or any Subsidiary Guarantor, and "Obligors"
means all of them.
"Pledged Equity Interests" means (i) the Subsidiary Equity Interests and
(ii) any other capital stock or other equity interests required to be pledged by
the Obligor to the Administrative Agent under this Agreement pursuant to
Sections 3(b), 3(c) or 3(d).
"Secured Obligations" means, with respect to each Obligor, (i) all
principal of and interest and premium (if any) on any Loan or Swingline Loan
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168
payable by such Obligor under, or any Note or Swingline Note issued by such
Obligor pursuant to, the Credit Agreement (including, without limitation, any
interest which accrues after or would accrue but for the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of such Obligor, whether or not allowed or allowable as a claim
in any such proceeding), (ii) all Reimbursement Obligations of such Obligor with
respect to any Letter of Credit issued pursuant to the Credit Agreement and all
interest payable by such Obligor thereon (including, without limitation, any
interest which accrues after or would accrue but for the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of such Obligor, whether or not allowed or allowable as a claim
in any such proceeding), (iii) if such Obligor is a Subsidiary Guarantor, all
amounts payable by such Obligor under the Guarantee Agreement, (iv) all other
amounts payable by such Obligor under the Loan Documents, (v) all Hedging
Obligations of such Obligor, and (vi) any amendments, restatements, renewals,
extensions or modifications of any of the foregoing; provided that the Secured
Obligations of each Subsidiary Guarantor described in clause (iii) above and any
amendment, restatement, renewal, extension or modification thereof described in
clause (vi) above (collectively, with respect to each Subsidiary Guarantor, such
Subsidiary Guarantor's "Subsidiary Guaranteed Obligations"), shall be
subordinate and junior in rank with respect to payment to the other Secured
Obligations of such Subsidiary Guarantor for purposes of this Pledge Agreement.
Pursuant to the proposed Amendment No. 4 to the Existing Credit Agreement, upon
satisfaction of the conditions precedent set forth therein, the Credit Agreement
will be amended and restated to include certain Subsidiaries of the Company as
borrowers under the Credit Agreement, and the parties hereto agree that, upon
effectiveness of such amendment and restatement, for purposes of the definition
of "Secured Obligations", the term "Obligors" will mean the Company, any of its
Subsidiaries that are borrowers under the Credit Agreement and the Subsidiary
Guarantors, and "Obligor" will mean any one of them.
"Secured Parties" means the Banks, the LC Agent, the Swingline Bank, the
Administrative Agent and the Lead Arrangers.
"Security Interests" means the security interests in the Collateral granted
hereunder securing the Secured Obligations.
"Subsidiary Equity Interests" means, with respect to each Issuer listed on
Schedule 1 hereto, the capital stock or other equity interests listed on
Schedule 1 hereto opposite such Issuer's name, which capital stock or other
equity interests constitute 65% of the aggregate outstanding capital stock or
other equity interests of such Issuer.
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169
Unless otherwise defined herein, or unless the context otherwise requires,
all terms used herein which are defined in the New York Uniform Commercial Code
as in effect on the date hereof shall have the meanings therein stated.
Section 2. Representations and Warranties. Each Obligor represents and
warrants as follows:
(a) Title to Pledged Equity Interests. Such Obligor owns all of its Pledged
Equity Interests, free and clear of any Liens other than the Security Interests
and Liens permitted under Section 5.06(a)(ix) of the Credit Agreement. All of
the Pledged Equity Interests of such Obligor have been duly authorized and
validly issued, and are fully paid and non-assessable, and are subject to no
options to purchase or similar rights of any Person. The Persons listed on
Schedule 1 under the name of such Obligor constitute all of the Persons that are
Direct Subsidiaries of such Obligor on the date hereof (other than any Excluded
Subsidiaries) and all of such Persons are wholly-owned Direct Subsidiaries
(excluding directors' qualifying shares). The Pledged Equity Interests of such
Obligor represent 65% of the aggregate capital stock and other equity interests
held by such Obligor of any Person that is a Direct Subsidiary (other than any
Excluded Subsidiary) and is a Foreign Subsidiary. Such Obligor is not and will
not become a party to or otherwise bound by any agreement, other than this
Agreement and any additional pledge agreements referred to in Section 2(b) which
restricts in any manner the rights of any present or future holder of any of the
Pledged Equity Interests of such Obligor with respect thereto.
(b) Validity, Perfection and Priority of Security Interests. (i) A UCC-1
financing statement naming such Obligor as debtor and the Administrative Agent
as secured party has been filed in each of the jurisdictions referred to in
Section 2(c) with respect to such Obligor.
[representation regarding steps needed to perfect in each foreign
jurisdiction to come once jurisdictions have been identified]
(ii) Other than as set forth in the preceding clauses of this Section, no
registration, recordation or filing with any governmental body, agency or
official or any other Person is required in connection with the execution or
delivery of this Agreement or necessary for the validity or enforceability
hereof or for the perfection or enforcement of the Security Interests in any of
the Collateral of any Obligor.
(iii) Neither such Obligor nor any of its Subsidiaries has performed or
will perform any acts which could reasonably be expected to prevent the
Administrative Agent from enforcing any of the terms and conditions of this
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170
Agreement or which would limit the Administrative Agent in any such enforcement.
(c) UCC Filing Locations. The chief executive office of each Obligor is
located at the address set forth on the signature pages hereof. With respect to
each Obligor, under the Uniform Commercial Code as in effect in the State in
which such office is located, a local filing in [ ] is required to perfect a
security interest consisting of general intangibles.
Section 3. Grant of the Security Interests. (a) In order to secure the full
and punctual payment of the Secured Obligations in accordance with the terms
thereof, each Obligor hereby collaterally assigns and pledges to and with the
Administrative Agent for the benefit of the Secured Parties and grants to the
Administrative Agent for the benefit of the Secured Parties security interests
in:
(i) the Pledged Equity Interests of such Obligor and all of its rights
and privileges with respect to such Pledged Equity Interests;
(ii) all interest, dividends, earnings, income, profits and other
payments and distributions with respect to any and all of the foregoing,
and all proceeds of any and all of the foregoing (the items in clauses (i)
through (ii), inclusive, being collectively referred to, with respect to
such Obligor, as the "Collateral" of such Obligor).
(b) In the event that any Person becomes a Direct Subsidiary (other than an
Excluded Subsidiary) of an Obligor after the date hereof, such Obligor will
promptly, and in any event within 45 days after such event (or such other number
of days as the Administrative Agent and such Obligor may agree to), pledge and
deposit with the Administrative Agent certificates representing shares of
capital stock or other equity interests of such Person held by such Obligor as
additional security for the Secured Obligations of such Obligor and take such
other steps as may be necessary or appropriate, or as the Administrative Agent
shall reasonably request, to ensure that such shares of capital stock or other
equity interests constitute additional security for the Secured Obligations of
such Obligor, and that the Security Interests therein are perfected, first
priority security interests; provided that no Obligor shall be required to
pledge or deposit any certificates or take any other steps pursuant to this
subsection (b) to the extent that after giving effect to any such pledge or
deposit, or the taking of any such step, shares of capital stock or other equity
interests representing more than 65% of the aggregate capital stock or other
equity interests of any Direct Subsidiary that is a Foreign Subsidiary would be
in pledge or deposit hereunder.
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171
(c) In the event that any Issuer at any time issues to any Obligor any
additional or substitute shares of capital stock of any class or any other
equity interests of any class such Obligor will promptly, and in any event
within 45 days after such event (or such other number of days as the
Administrative Agent and such Obligor may agree to), pledge and deposit with the
Administrative Agent certificates representing all such shares of capital stock
or other equity interests as additional security for the Secured Obligations of
such Obligor and take such other steps as may be necessary or appropriate, or as
the Administrative Agent shall reasonably request, to ensure that such shares of
capital stock or other equity interests constitute additional security for the
Secured Obligations of such Obligor, and that the Security Interests therein are
perfected, first priority security interests; provided that no Obligor shall be
required to pledge or deposit any certificates or take any other steps pursuant
to this subsection (c) to the extent that after giving effect to any such pledge
or deposit, or the taking of any such step, shares of capital stock or other
equity interests representing more than 65% of the aggregate capital stock or
other equity interests of any Direct Subsidiary that is a Foreign Subsidiary
would be in pledge or deposit hereunder.
(d) Any Excluded Subsidiary of any Obligor shall cease to be an Excluded
Subsidiary on the first day on which such Obligor shall be able to pledge the
capital stock or other equity interests of such Direct Subsidiary hereunder
without triggering a requirement to equally and ratably secure securities issued
under the Indenture. Promptly, and in any event within 45 days after any
Excluded Subsidiary of any Obligor shall cease to be an Excluded Subsidiary (or
such other number of days as the Administrative Agent and such Obligor may agree
to), such Obligor will pledge and deposit with the Administrative Agent
certificates representing shares of capital stock or other equity interests of
such Direct Subsidiary as additional security for the Secured Obligations of
such Obligor and take such other steps as may be necessary or appropriate, or as
the Administrative Agent shall reasonably request, to ensure that such shares of
capital stock or other equity interests constitute additional security for the
Secured Obligations of such Obligor, and that the Security Interests therein are
perfected, first priority security interests; provided that no Obligor shall be
required to pledge or deposit any certificates or take any other steps pursuant
to this subsection (d) to the extent that after giving effect to any such pledge
or deposit, or the taking of any such step, shares of capital stock or other
equity interests representing more than 65% of the aggregate capital stock or
other equity interests of any Direct Subsidiary that is a Foreign Subsidiary
would be in pledge or deposit hereunder.
(e) Any shares of capital stock or other equity interests pledged by any
Obligor to the Administrative Agent pursuant to subsections (b), (c) or (d)
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above constitute Pledged Equity Interests of such Obligor and are subject to all
provisions of this Agreement.
(f) The Security Interests are granted as security only and shall not
subject the Administrative Agent or any Secured Party to, or transfer or in any
way affect or modify, any obligation or liability of any Obligor or any of its
Subsidiaries with respect to any of the Collateral or any transaction in
connection therewith.
Section 4. Delivery of Pledged Equity Interests. Unless otherwise required
by the laws of any jurisdiction in order to perfect the Security Interests in
Collateral the perfection of which is governed by the laws of such jurisdiction,
all certificates representing Pledged Equity Interests of any Obligor shall be
delivered to the Administrative Agent in the State of New York by such Obligor
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed instruments of transfer or assignment in blank,
and accompanied by any required transfer tax stamps, all in form and substance
reasonably satisfactory to the Administrative Agent.
Section 5. Further Assurances. Each Obligor agrees that it will, at its
expense and in such manner and form as the Administrative Agent may reasonably
require, execute, deliver, file and record any financing statement, specific
assignment, supplemental pledge agreement, confirmation or other paper and take
any other action that may be necessary or desirable, or that the Administrative
Agent may reasonably request, in order to create, preserve, perfect or validate
any Security Interest or to enable the Administrative Agent to exercise and
enforce its rights hereunder with respect to any of the Collateral of such
Obligor. Each Obligor agrees that it will not change its name, identity or
corporate structure in any manner or the location of its chief executive office
in the United States unless, in each case, it shall have given the
Administrative Agent not less than 30 days' prior notice thereof.
Section 6. Record Ownership of Pledged Equity Interests. If an Event of
Default shall have occurred and be continuing, the Administrative Agent may, in
its sole discretion, cause any or all of the Pledged Equity Interests to be
transferred of record into the name of the Administrative Agent or its nominee.
Each Obligor will promptly give to the Administrative Agent copies of any
notices or other communications received by it with respect to Pledged Equity
Interests registered in the name of such Obligor and the Administrative Agent
will promptly give to each Obligor copies of any notices and communications
received by the Administrative Agent with respect to Pledged Equity Interests of
such Obligor registered in the name of the Administrative Agent or its nominee.
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Section 7. Right to Receive Distributions on Collateral. The Administrative
Agent shall have the right to receive and, during the continuance of any Event
of Default, to retain as Collateral hereunder all dividends, interest and other
payments and distributions made upon or with respect to the Collateral of each
Obligor and each Obligor shall take all such action as the Administrative Agent
may deem necessary or appropriate to give effect to such right; provided that
unless an Event of Default has occurred and is continuing, the foregoing
sentence shall not apply to Cash Distributions. All such dividends, interest and
other payments and distributions which are received by any Obligor (except Cash
Distributions received when no Event of Default has occurred and is continuing)
shall be received in trust for the benefit of the Secured Parties and, if the
Administrative Agent so directs during the continuance of an Event of Default,
shall be segregated from other funds of such Obligor and shall, forthwith upon
demand by the Administrative Agent during the continuance of an Event of
Default, be paid over to the Administrative Agent as Collateral in the same form
as received (with any necessary endorsement). After all Events of Defaults have
been cured, the Administrative Agent's right to retain dividends, interest and
other payments and distributions (including Cash Distributions) under this
Section 7 shall cease and the Administrative Agent shall pay over to each
Obligor any such Collateral of such Obligor retained by it during the
continuance of an Event of Default.
Section 8. Right to Vote Pledged Equity Interests. Unless an Event of
Default shall have occurred and be continuing, each Obligor shall have the
right, from time to time, to vote and to give consents, ratifications and
waivers with respect to its Pledged Equity Interests, and the Administrative
Agent shall, upon receiving a written request from any Obligor accompanied by a
certificate signed by a Responsible Officer of the Company stating that no Event
of Default has occurred and is continuing, deliver to such Obligor or as
specified in such request such proxies, powers of attorney, consents,
ratifications and waivers in respect of any of its Pledged Equity Interests
which is registered in the name of the Administrative Agent or its nominee as
shall be specified in such request and be in form and substance satisfactory to
the Administrative Agent.
If an Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to the extent permitted by law and
each Obligor shall take all such action as may be necessary or appropriate to
give effect to such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or all of the Pledged
Equity Interests of such Obligor with the same force and effect as if the Agent
were the absolute and sole owner thereof.
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Section 9. General Authority. Each Obligor hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Obligor, the Administrative Agent, the Secured
Parties or otherwise, for the sole use and benefit of the Secured Parties, but
at the expense of such Obligor, to the extent permitted by law, to exercise at
any time and from time to time while an Event of Default has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(a) to demand, xxx for, collect, receive and give acquittance for any and
all monies due or to become due upon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or the
proceeds or avails thereof, as fully and effectually as if the Administrative
Agent were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
provided that the Administrative Agent shall give each Obligor not less than ten
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral of such Obligor. The Administrative Agent
and each Obligor agree that such notice constitutes "reasonable notification"
within the meaning of Section 9-504(3) of the Uniform Commercial Code.
Section 10. Remedies upon Event of Default. If any Event of Default shall
have occurred and be continuing, the Administrative Agent may exercise on behalf
of the Secured Parties all the rights of a secured party after default under the
Uniform Commercial Code (whether or not in effect in the jurisdiction where such
rights are exercised) and, in addition, the Administrative Agent may, without
being required to give any notice, except as herein provided or as may be
required by mandatory provisions of law, (i) withdraw all cash, if any, then
held by it as Collateral and apply it as specified in Section 13 and (ii) if
there shall be no such cash or if such cash shall be insufficient to pay all the
Secured Obligations in full, sell the Collateral or any part thereof at public
or private sale or at any broker's board or on any securities exchange, for
cash, upon credit or for future delivery, and at such price or prices as the
Administrative Agent may reasonably deem satisfactory. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at any public sale (or, if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations, at
any private sale).
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The Administrative Agent is authorized, in connection with any such sale, if it
deems it advisable so to do, (a) to restrict the prospective bidders on or
purchasers of any of the Pledged Equity Interests to a limited number of
sophisticated investors who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
sale of any of such Pledged Equity Interests, (b) to cause to be placed on
certificates for any or all of the Pledged Equity Interests or on any other
securities pledged hereunder a legend to the effect that such security has not
been registered under the Securities Act of 1933, as amended, and may not be
disposed of in violation of the provision of said Act, and (c) to impose such
other limitations or conditions in connection with any such sale as the
Administrative Agent reasonably deems necessary or advisable in order to comply
with said Act or any other law. Each Obligor will execute and deliver such
documents and take such other action as the Administrative Agent reasonably
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Administrative Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so sold
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Obligor which may be waived, and each
Obligor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice of such sale required by Section 9
shall (1) in the case of a public sale, state the time and place fixed for such
sale, (2) in the case of a sale at a broker's board or on a securities exchange,
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or the portion thereof so being sold, will first be
offered for sale at such board or exchange, and (3) in the case of a private
sale, state the day after which such sale may be consummated. Any such public
sale shall be held at such time or times within ordinary business hours and at
such place or places as the Administrative Agent may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Administrative Agent may determine. The
Administrative Agent shall not be obligated to make any such sale pursuant to
any such notice. The Administrative Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned, subject
to the Administrative Agent giving the notice required to be given pursuant to
Section 9. In the case of any sale of all or any part of the Collateral on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the selling price is paid by the purchaser thereof,
but the Administrative Agent shall not incur any liability in the case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may again be sold upon like
notice.
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The Administrative Agent, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
Section 11. Expenses. Each Obligor agrees that it will forthwith upon
demand pay to the Administrative Agent:
(a) the amount of any taxes which the Administrative Agent may have been
required to pay by reason of the Security Interests or to free any of the
Collateral of such Obligor from any Lien thereon, and
(b) the amount of any and all out-of-pocket expenses, including the
reasonable fees and disbursements of counsel and of any other experts, which the
Administrative Agent may incur in connection with (i) the enforcement of this
Agreement, including such expenses as are incurred to preserve the value of the
Collateral of such Obligor and the validity, perfection, rank and value of any
Security Interest, (ii) the collection, sale or other disposition of any of the
Collateral of such Obligor, (iii) the exercise by the Administrative Agent of
any of the rights conferred upon it hereunder, or (iv) any Default.
Any such amount not paid in a timely manner shall bear interest at the rate
applicable to Base Rate Loans from time to time and shall be an additional
Secured Obligation hereunder.
Section 12. Limitation on Duty of Administrative Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Administrative Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which it accords its own property, and shall not be liable or responsible
for any loss or damage to any of the Collateral, or for any diminution in the
value thereof, by reason of the act or omission of any agent or bailee selected
by the Administrative Agent in good faith.
Section 13. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral pledged by any Obligor shall
be applied by the Administrative Agent in the following order of priorities:
11
177
first, to pay the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the
Administrative Agent, and all expenses, liabilities and advances incurred
or made by the Administrative Agent in connection therewith, and any other
unreimbursed expenses for which any Secured Party is to be reimbursed
pursuant to the Credit Agreement (including without limitation Section
9.03(a) thereof) or Section 11 hereof and any unpaid fees owing to any
Secured Party under the Loan Documents;
second, to the ratable payment of accrued but unpaid interest on the
Secured Obligations of such Obligor (other than, in the case of any
Subsidiary Guarantor, its Subsidiary Guaranteed Obligations) in accordance
with the provisions of the Credit Agreement;
third, to the ratable payment of unpaid principal of, and
reimbursement obligations constituting, the Secured Obligations of such
Obligor (other than, in the case of any Subsidiary Guarantor, its
Subsidiary Guaranteed Obligations);
fourth, in the case of any Subsidiary Guarantor, to the ratable
payment of accrued but unpaid interest on its Subsidiary Guaranteed
Obligations, until all such Secured Obligations shall have been paid in
full;
fifth, in the case of any Subsidiary Guarantor, to the ratable payment
of unpaid principal of, and reimbursement obligations constituting its
Subsidiary Guaranteed Obligations, until all such Secured Obligations shall
have been paid in full;
sixth, to pay ratably all other Secured Obligations, until all Secured
Obligations shall have been paid in full; and
finally, to pay to such Obligor or its successors or assigns, or as a
court of competent jurisdiction may direct, any surplus then remaining from
such proceeds.
The Administrative Agent may make distributions hereunder in cash or in kind or,
on a ratable basis, in any combination thereof. For purposes of making any
distribution hereunder, the principal amount of any Hedging Obligation shall be
the amount of the relevant Obligor's Hedging Obligations due and payable at the
time such distribution is made.
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Section 14. Concerning the Administrative Agent. The provisions of Article
7 of the Credit Agreement shall inure to the benefit of the Administrative Agent
in respect of this Agreement and shall be binding upon the parties to the Credit
Agreement and the parties hereto in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Administrative Agent
therein set forth:
(a) The Administrative Agent is authorized to take all such action as is
provided to be taken by it as Administrative Agent hereunder and all other
action reasonably incidental thereto. As to any matters not expressly provided
for herein (including, without limitation, the timing and methods of realization
upon the Collateral) the Administrative Agent shall act or refrain from acting
in accordance with written instructions from the Required Banks or, in the
absence of such instructions, in accordance with its discretion.
(b) The Administrative Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interests in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder. The Administrative Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement by any Obligor.
Section 15. Appointment of Co-agents. At any time or times, in order to
comply with any legal requirement in any jurisdiction, the Administrative Agent
may appoint another bank or trust company or one or more other persons, either
to act as co-agent or co-agents, jointly with the Administrative Agent, or to
act as separate agent or agents on behalf of the Secured Parties with such power
and authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Administrative Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 14).
Section 16. Termination of Security Interests; Release of Collateral. (a)
Upon the repayment in full of all Secured Obligations (other than those
described in clause (v) of the definition thereof and any amendments,
restatements, renewals, extensions or modifications thereof), the termination of
the Commitments under the Credit Agreement and the termination or cancellation
of all Letters of Credit (unless such Letters of Credit have been fully cash
collateralized pursuant to arrangements satisfactory to the LC Agent, or back-
stopped by a separate letter of credit, in form and substance and issued by an
issuer satisfactory to the LC Agent), the Security Interests shall terminate and
all rights to the Collateral of each Obligor shall revert to such Obligor.
13
179
(b) Upon the consummation of any Asset Sale (or any sale or other
disposition described in clause (iv) of the definition of Asset Sale) permitted
by the terms of the Credit Agreement and consisting of the disposition of any
Collateral or of the capital stock of any Obligor other than the Company (any
such transaction, a "Permitted Collateral Sale"), the Security Interests in such
Collateral or in the Collateral pledged by such Obligor, as the case may be (but
not, in any case, in any Proceeds thereof) shall be released. Such release shall
not be subject to the consent of any Bank, and the Administrative Agent shall be
fully protected in relying on a certificate of an Obligor as to whether any
particular transaction consummated by such Obligor constitutes a Permitted
Collateral Sale.
(c) In addition to the release of Collateral effected by subsection (b), at
any time and from time to time prior to the termination of the Security
Interests, the Administrative Agent may release any of the Collateral with the
prior written consent of the Required Banks; provided that the Administrative
Agent may release all or substantially all of the Collateral (for purposes of
this subsection (c), as defined in the Credit Agreement) only with the prior
written consent of all the Banks.
(d) Upon any termination of the Security Interests or release of Collateral
in accordance with this Section, the Administrative Agent will, at the expense
of the relevant Obligor, execute and deliver to such Obligor such documents as
such Obligor shall reasonably request to evidence the termination of the
Security Interests or the release of such Collateral, as the case may be.
Section 17. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth on the
signature pages hereof or at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Company. Each such notice, request or other communication shall be
effective (i) if given by facsimile, when transmitted to the facsimile number
referred to in this Section and confirmation of receipt is received, or (ii) if
given by any other means, when delivered at the address referred to in this
Section.
Section 18. Waivers, Non-Exclusive Remedies. No failure on the part of the
Administrative Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Administrative
Agent of any right under this Agreement or any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
in this Agreement and the other Loan Documents are cumulative and are not
exclusive of any other remedies provided by law.
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180
Section 19. Successors and Assigns. This Agreement shall be binding upon
each Obligor and its successors and permitted assigns. This Agreement is for the
benefit of each Secured Party and its successors and permitted assigns, and in
the event of an assignment of all or any of any Bank's interest in and to its
rights and obligations under the Credit Agreement in accordance with the Credit
Agreement, the assignor's rights hereunder, to the extent applicable to the
indebtedness or obligation so assigned, shall automatically be transferred with
such indebtedness or obligation.
Section 20. Changes in Writing. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by each Obligor and the Administrative Agent, subject to the provisions
of Section 9.05(b) of the Credit Agreement.
Section 21. New York Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed by the
laws of such jurisdiction.
Section 22. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 23. Additional Obligors. Any Subsidiary Guarantor may become an
Obligor party hereto and bound hereby by executing a counterpart hereof and
delivering the same to the Administrative Agent.
Section 24. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
VENATOR GROUP, INC.
By:________________________
Name:
Title:
EASTBAY, INC.
EVENATOR, INC.
FOOT LOCKER JAPAN, INC.
GEORGETOWN CONSTRUCTION
CORPORATION
NORTHERN REFLECTIONS, INC.
RETAIL COMPANY OF GERMANY,
INC.
XXXXXXX BROTHERS COMPANY
ROBBY'S SPORTING GOODS, INC.
TEAM EDITION APPAREL, INC.
THE SAN FRANCISCO MUSIC BOX
COMPANY
VENATOR GROUP CORPORATE
SERVICES, INC.
VENATOR GROUP HOLDINGS, INC.
VENATOR GROUP RETAIL, INC.
VENATOR GROUP SOURCING, INC.
VENATOR GROUP SPECIALITY, INC.
By:________________________________
Name:
Title:
16
000
XXX XXXX XX XXX XXXX, as
Administrative Agent
By:______________________________
Name:
Title:
17
183
Schedule 1
Stock Pledged by Venator Group, Inc.
=====================================================================================================
Issuer Number of Shares Certificate Number
=====================================================================================================
Venator Group (Australia) Ltd.
-----------------------------------------------------------------------------------------------------
Foot Locker Austria GmbH
-----------------------------------------------------------------------------------------------------
Foot Locker Belgium N.V.
-----------------------------------------------------------------------------------------------------
Foot Locker Denmark ApS
-----------------------------------------------------------------------------------------------------
Foot Locker Europe, B.V.
-----------------------------------------------------------------------------------------------------
Foot Locker France S.A.
-----------------------------------------------------------------------------------------------------
Foot Locker Italy S.r.l.
-----------------------------------------------------------------------------------------------------
Foot Locker Japan K.K.
-----------------------------------------------------------------------------------------------------
Foot Locker Netherlands B.V.
-----------------------------------------------------------------------------------------------------
Foot Locker Spain S.L.
-----------------------------------------------------------------------------------------------------
Foot Locker Sweden AB
-----------------------------------------------------------------------------------------------------
Foot Locker UK Limited
-----------------------------------------------------------------------------------------------------
Woolworth Holding S.A. de C.V.
======================================================================================================
184
EXHIBIT H
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of March ___, 1999 among each of the
Subsidiaries of the Company (as defined below) listed on the signature pages
hereof and each other Subsidiary of the Company that may from time to time
become a party hereto in accordance with Section 19 (each such Subsidiary, with
its successors, a "Subsidiary Guarantor") and The Bank of New York, as
Administrative Agent (with its successors, the "Administrative Agent"), for the
benefit of the Bank Parties (as defined in the Credit Agreement referred to
below).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Venator Group, Inc., a New York corporation (with its successors,
the "Company"), the banks party thereto (the "Existing Banks"), the co-agents
party thereto, Bank of America National Trust & Savings Association, as
Documentation Agent and The Bank of New York, as Administrative Agent, LC Agent
and Swingline Bank are parties to a Credit Agreement dated as of April 9, 1997
(as in effect immediately prior to the effectiveness of Amendment No. 3 referred
to below, the "Existing Credit Agreement" and, as amended by Amendment No. 3 and
as further amended or amended and restated from time to time, the "Credit
Agreement"); and
WHEREAS, pursuant to Amendment No. 3 to the Existing Credit Agreement dated
as of the date hereof ("Amendment No. 3") among the Company, the Existing Banks,
the co-agents party thereto, Bank of America National Trust & Savings
Association, as Documentation Agent, The Bank of New York, as Administrative
Agent, LC Agent and Swingline Bank and the Lead Arrangers party thereto, the
parties to the Existing Credit Agreement desire to amend and restate the
Existing Credit Agreement as provided therein, subject to satisfaction of the
conditions set forth therein; and
WHEREAS, it is a condition to effectiveness of the amendment to the
Existing Credit Agreement effected by Amendment No. 3 that each Subsidiary
Guarantor enter into a Guarantee Agreement substantially in the form hereof; and
WHEREAS, in consideration of the financial and other support that the
Company has provided, and such financial and other support as the Company may in
the future provide, to the Subsidiary Guarantors, the Subsidiary Guarantors are
willing to enter into this Guarantee Agreement;
185
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein, except that the term "Loan Documents" shall include any document
with respect to any Hedging Obligations. Pursuant to the proposed Amendment No.
4 to the Existing Credit Agreement ("Amendment No. 4"), upon satisfaction of the
conditions precedent set forth therein, the Credit Agreement will be amended and
restated to include certain Subsidiaries of the Company as borrowers under the
Credit Agreement, and the parties hereto agree that, upon effectiveness of such
amendment and restatement, the term "Obligors" will mean the Company, any of its
Subsidiaries that are borrowers under the Credit Agreement and the Subsidiary
Guarantors, and "Obligor" will mean any one of them. The following additional
terms, as used herein, have the following meanings:
"Guaranteed Obligations" means, with respect to each Subsidiary Guarantor,
(i) all principal of and interest and premium (if any) on any Loan or Swingline
Loan payable by the Company or any other Obligor (other than such Subsidiary
Guarantor) under, or any Note or Swingline Note issued pursuant to, the Credit
Agreement (including, without limitation, any interest which accrues after or
would accrue but for the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of the Company or such
other Obligor, whether or not allowed or allowable as a claim in any such
proceeding), (ii) all Reimbursement Obligations of the Company or any other
Obligor (other than such Subsidiary Guarantor) with respect to any Letter of
Credit issued pursuant to the Credit Agreement and all interest payable by the
Company or such other Obligor thereon (including, without limitation, any
interest which accrues after or would accrue but for the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company or such other Obligor, whether or not allowed or
allowable as a claim in any such proceeding), (iii) all Hedging Obligations of
the Company or any other Obligor (other than such Subsidiary Guarantor), (iv)
all other amounts payable by the Company or any other Obligor (other than such
Subsidiary Guarantor) under the Loan Documents and (v) any renewals, extensions
or modifications of any of the foregoing.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement or other interest or currency exchange rate hedging
arrangement.
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186
"Hedging Obligations" means, with respect to any Obligor, all obligations
of such Obligor under any Hedging Agreement between such Obligor and any Bank
Party (or any affiliate of any Bank Party).
Section 2. The Guarantees. Each of the Subsidiary Guarantors, jointly and
severally, hereby unconditionally guarantees the full and punctual payment when
due (whether at stated maturity, upon acceleration or otherwise) of the
Guaranteed Obligations. Upon failure by any Obligor to pay punctually any
Guaranteed Obligation when due, each Subsidiary Guarantor agrees jointly and
severally that it shall forthwith on demand pay such Guaranteed Obligation at
the place and in the manner specified in the Credit Agreement or the other
relevant Loan Document, as the case may be.
Section 3. Guarantees Unconditional. The obligations of each Subsidiary
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of any Obligor or any other Person under any Loan
Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Loan Document or
any Letter of Credit (including without limitation any amendment and restatement
of the Credit Agreement pursuant to the proposed Amendment No. 4, a copy of
which has been delivered to such Subsidiary Guarantor);
(iii) any release, impairment, non-perfection or invalidity of any direct
or indirect security for any obligation of any Obligor or any other Person under
any Loan Document or with respect to any Letter of Credit;
(iv) any change in the corporate existence, structure or ownership of any
Obligor or any other Person or any of their respective subsidiaries, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Obligor or any other Person or any of their respective subsidiaries or any of
their respective assets or any resulting release or discharge of any obligation
of any Obligor or any other Person contained in any Loan Document;
(v) the existence of any claim, set-off or other rights which such
Subsidiary Guarantor may have at any time against any other Obligor or any Bank
Party, whether in connection herewith or with any unrelated transactions;
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provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any Obligor
or any other Person for any reason of any Loan Document or any Letter of Credit,
or any provision of applicable law or regulation purporting to prohibit the
payment by any Obligor or any other Person of the principal of or interest on
any Loan, any Swingline Loan, any Note, any Swingline Note or any Reimbursement
Obligation or any other amount payable by any Obligor under any Loan Document;
or
(vii) any other act or omission to act or delay of any kind by any Obligor,
any Bank Party or any other party to any Loan Document, or any other
circumstance whatsoever which might, but for the provisions of this Section,
constitute a legal or equitable discharge of or defense to obligations of such
Subsidiary Guarantor hereunder.
Section 4. Discharge Only upon Payment in Full; Reinstatement In Certain
Circumstances; Release of Subsidiary Guarantors. (a) Each Subsidiary Guarantor's
obligations hereunder shall remain in full force and effect until the repayment
in full of all Guaranteed Obligations, the termination of all Commitments under
the Credit Agreement and the expiration or cancellation of all Letters of Credit
(unless such Letters of Credit have been fully cash collateralized pursuant to
arrangements satisfactory to the LC Agent, or back-stopped by a separate letter
of credit, in form and substance and issued by an issuer satisfactory to the LC
Agent). If at any time any payment of any Guaranteed Obligation is rescinded or
must be otherwise restored or returned upon the insolvency or receivership of
the Company or any other Obligor or otherwise, each Subsidiary Guarantor's
obligations hereunder with respect thereto shall be reinstated as though such
payment had been due but not made at such time.
(b) Upon (w) the consummation of any Asset Sale (or any sale or other
disposition described in clause (iv) of the definition of Asset Sale) permitted
by the terms of the Credit Agreement and consisting of the disposition of all of
the capital stock of a Subsidiary Guarantor (any such transaction, a "Guarantor
Asset Sale"), (x) if applicable, application of the proceeds of such Guarantor
Asset Sale in accordance with the provisions of the Credit Agreement, (y)
release of such Subsidiary Guarantor from its obligations under any Guarantee of
any other Debt of the Company or any of its Subsidiaries (including without
limitation any New Subordinated Debt, any Other Refinancing Debt or any Debt of
the Company described in clause (v) of the parenthetical set forth in Section
5.09 of the Credit Agreement) (or automatic termination of the obligations of
such Subsidiary Guarantor under any such Guarantee) and (z) if such Subsidiary
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Guarantor is a borrower under the Credit Agreement, repayment in full of all
outstanding Loans made to it and all Reimbursement Obligations owed by it and
cancellation or termination of all Letters of Credit issued for its account (or
the assumption on the terms set forth in the Credit Agreement by the Company or
any other borrower under the Credit Agreement of the reimbursement obligations
with respect to such Letters of Credit), such Subsidiary Guarantor shall be
released from all of its obligations hereunder (and such release shall not
require the consent of any Bank Party). The Administrative Agent shall be fully
protected in relying on a certificate of the Company as to whether any
particular transaction constitutes a Guarantor Asset Sale, whether the proceeds
of such Guarantor Asset Sale have been applied in accordance with the provisions
of the Credit Agreement, and whether the releases from, or termination of, any
applicable Guarantees by such Subsidiary Guarantor have been effected.
(c) In addition to the release of any Subsidiary Guarantor from its
obligations hereunder permitted pursuant to subsection (b), at any time and from
time to time prior to the termination of each Subsidiary Guarantor's obligations
hereunder, the Administrative Agent may release any Subsidiary Guarantor from
its obligations hereunder with the prior written consent of the Required Banks;
provided that any release of all or substantially all of the Subsidiary
Guarantors shall require the consent of all of the Banks.
Section 5. Waiver by the Subsidiary Guarantors. Each Subsidiary Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice, as well as any requirement that at any time any action be taken by any
Person against such Subsidiary Guarantor, any other Subsidiary Guarantor, the
Company or any other Person.
Section 6. Subrogation and Contribution. Upon making any payment hereunder
with respect to the obligations of any Obligor, each Subsidiary Guarantor shall
be subrogated to the rights of the payee against such Obligor with respect to
the portion of such obligation paid by such Subsidiary Guarantor; provided that
such Subsidiary Guarantor shall not enforce any payment by way of subrogation,
or by reason of contribution, against any other guarantor of the Guaranteed
Obligations (including without limitation any other Subsidiary Guarantor), until
the repayment in full of all Guaranteed Obligations of all Subsidiary
Guarantors, the termination of the Commitments under the Credit Agreement and
the expiration or cancellation of all Letters of Credit (unless such Letters of
Credit have been fully cash collateralized pursuant to arrangements satisfactory
to the LC Agent, or back-stopped by a separate letter of credit, in form and
substance and issued by an issuer satisfactory to the LC Agent).
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Section 7. Stay of Acceleration. If acceleration of the time for payment of
any Guaranteed Obligations payable by any Subsidiary Guarantor is stayed upon
the insolvency, bankruptcy or reorganization of such Subsidiary Guarantor or
otherwise, all such Guaranteed Obligations otherwise subject to acceleration
under the terms of any Loan Document shall nonetheless be payable by each other
Subsidiary Guarantor hereunder forthwith on demand by the Administrative Agent
made at the request of the Required Banks.
Section 8. Representations and Warranties. Each Subsidiary Guarantor
represents and warrants that:
(a) Such Subsidiary Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except where failures to possess such licenses,
authorizations, consents and approvals could not, in the aggregate, reasonably
be expected to result in a Material Adverse Effect.
(b) The execution, delivery and performance by such Subsidiary Guarantor of
this Guarantee Agreement are within such Subsidiary Guarantor's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of such Subsidiary Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or any of its Subsidiaries
or result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
(c) This Guarantee Agreement constitutes a valid and binding agreement of
such Subsidiary Guarantor.
(d) The obligations of such Subsidiary Guarantor hereunder rank (i) senior
to any other Debt of such Subsidiary Guarantor with respect to the collateral
pledged by such Subsidiary Guarantor, (ii) pari passu with other unsecured Debt
of such Subsidiary Guarantor (other than any such Debt described in clause
(iii)) with respect to any assets of such Subsidiary Guarantor (other than any
collateral referred to in clause (i)) and (iii) senior to any other Debt of such
Subsidiary Guarantor which by its terms is subordinated thereto, including
without limitation any Guarantee of any New Subordinated Debt granted by such
Guarantor.
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Section 9. Amendments. Any provision of this Guarantee Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by each Subsidiary Guarantor and the Administrative Agent, subject to the
provisions of Section 9.05(b) of the Credit Agreement.
Section 10. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth on the
signature pages hereof or at such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the Administrative
Agent and the Company. Each such notice, request or other communication shall be
effective (i) if given by facsimile, when transmitted to the facsimile number
referred to in this Section and confirmation of receipt is received, or (ii) if
given by any other means, when delivered at the address referred to in this
Section.
Section 11. Taxes. Each Subsidiary Guarantor agrees to be bound by the
provisions of Section 8.04 of the Credit Agreement with respect to any payments
made by such Subsidiary Guarantor under this Guarantee Agreement.
Section 12. Continuing Guarantees. This Guarantee Agreement is a continuing
Guarantee of each Subsidiary Guarantor and shall be binding upon each Subsidiary
Guarantor and its successors and assigns. This Guarantee Agreement is for the
benefit of each Bank Party and its successors and permitted assigns, and in the
event of an assignment of all or any of any Bank's interest in and to its rights
and obligations under the Credit Agreement in accordance with the Credit
Agreement, the assignor's rights hereunder, to the extent applicable to the
indebtedness or obligation so assigned, shall automatically be transferred with
such indebtedness or obligation.
Section 13. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Bank Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible, and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 14. Limitation on the Obligations of Subsidiary Guarantors. The
obligations of each Subsidiary Guarantor hereunder shall be limited to an
aggregate amount that is equal to the largest amount that would not render the
obligations of such Subsidiary Guarantor hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
applicable law.
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Section 15. Governing Law; Jurisdiction. This Guarantee Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. Each Subsidiary Guarantor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Guarantee Agreement or the
transactions contemplated hereby. Each Subsidiary Guarantor irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
Section 16. Appointment of Agent for Service Of Process. (a) Each
Subsidiary Guarantor hereby irrevocably designates, appoints, authorizes and
empowers as its agent for service of process, the secretary of Venator Group,
Inc. to accept and acknowledge for and on behalf of such Subsidiary Guarantor
service of any and all process, notices or other documents that may be served in
any suit, action or proceeding relating hereto in any New York State or Federal
court sitting in The State of New York.
(b) In lieu of service upon its agent, each Subsidiary Guarantor consents
to process being served in any suit, action or proceeding relating hereto by
mailing a copy thereof by registered or certified air mail, postage prepaid,
return receipt requested, to its address set forth on the signature pages
hereof, provided that a copy thereof is mailed concurrently to the Secretary of
Venator Group, Inc. Each Subsidiary Guarantor agrees that such service (1) shall
be deemed in every respect effective service of process upon it in any such
suit, action or proceeding and (2) shall, to the fullest extent permitted by
law, be taken and held to be valid personal service upon and personal delivery
to it.
(c) Nothing in this Section shall affect the right of any party hereto to
serve process in any manner permitted by law, or limit any right that any party
hereto may have to bring proceedings against any other party hereto in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
Section 17. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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Section 18. Counterparts. This Guarantee Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Section 19. Additional Guarantors. Any Subsidiary may become a Subsidiary
Guarantor party hereto and bound hereby by executing a counterpart hereof and
delivering the same to the Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
EASTBAY, INC.
eVENATOR, INC.
FOOT LOCKER JAPAN, INC.
NORTHERN REFLECTIONS INC.
THE XXXXXXX BROTHERS COMPANY
ROBBY'S SPORTING GOODS, INC.
TEAM EDITION APPAREL, INC.
THE SAN FRANCISCO MUSIC BOX COMPANY
VENATOR GROUP CORPORATE SERVICES,
INC.
VENATOR GROUP HOLDINGS, INC.
VENATOR GROUP RETAIL, INC.
VENATOR GROUP SOURCING, INC.
VENATOR GROUP SPECIALITY, INC.
By:______________________________________
Name:
Title:
RETAIL COMPANY OF GERMANY, INC.
By:______________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Administrative Agent
By____________________________
Name:
Title:
194
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, ____ among [ASSIGNOR] (the "Assignor") and
[ASSIGNEE] (the "Assignee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to the Credit Agreement dated as of April 9, 1997 and amended and restated as of
March 19, 1999 among Venator Group, Inc., the Banks Party thereto, Co-Agents
party thereto, Bank of America National Trust & Savings Association, as
Documentation Agent, The Bank of New York as Administrative Agent, LC Agent and
Swingline Bank and the Lead Arrangers party thereto (as further amended from
time to time, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Committed Loans to the Borrower and participate in Letters of
Credit issued for the account of the Borrower in an aggregate amount at any time
outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and 1/
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ 2/ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans and LC Exposure, and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such terms;
--------
1 This clause (and certain other provisions herein) should be modified to
reflect the assignment of Money Market Loans if such Loans are being
assigned.
2 Must be in an amount of not less than $5,000,000 if the Assignee was not a
Bank immediately prior to such assignment.
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NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
and purchases such rights from the Assignor and assumes all of the obligations
of the Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by, and the LC Exposure of, the
Assignor outstanding at the date hereof. Upon the execution and delivery hereof
by the Assignor, the Assignee, [the Borrower]3/ and the Administrative Agent and
the payment of the amounts specified in Section 3 hereof required to be paid on
the date hereof (i) the Assignee shall, as of the date hereof, succeed to the
rights and be obligated to perform the obligations of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount, and (ii)
the Commitment of the Assignor shall, as of the date hereof, be reduced by a
like amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. (a) As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.4/ It is
understood that facility fees accrued to the date hereof in respect of the
Assigned Amount are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement or any other Loan Document which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
--------
3 Include if Borrower's consent to assignment is required under Section
9.06(c) of the Credit Agreement
4 Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee.
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(b) The Assignor shall pay the $3,500 administrative fee to be paid by it
to the Administrative Agent pursuant to Section 9.06(c) of the Credit
Agreement.5
[SECTION 4. Consent of the Borrower and the Administrative Agent. This
Agreement is conditioned upon the consent of the Borrower, the LC Agent, the
Swingline Bank and the Administrative Agent pursuant to Section 9.06(c) of the
Credit Agreement. The execution of this Agreement by the Borrower, the LC Agent,
the Swingline Bank and the Administrative Agent is evidence of this consent.
Pursuant to said Section 9.06(c) the Borrower is obligated to execute and
deliver a Note payable to the order of the Assignee, if required, to reflect the
assignment provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower or any
other Obligor, or the validity and enforceability of the obligations of the
Borrower or any other Obligor in respect of any Loan Document. The Assignee
acknowledges that it has, independently and without reliance on the Assignor,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement and will
continue to be responsible for making its own independent appraisal of the
business, affairs and financial condition of any Obligor.
SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
--------
5 Section 3(b) should be deleted if the assignment is required by the
Borrower pursuant to Section 8.06 of the Credit Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By______________________
Title:
[Consented and agreed to:
VENATOR GROUP, INC.
By__________________________
Title:
THE BANK OF NEW YORK,
as Administrative Agent, LC Agent
and Swingline Bank
By__________________________
Title:]
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EXHIBIT J
NOTICE OF COMMITTED BORROWING 1/
To The Bank of New York,
as Administrative Agent under
the Credit Agreement referred to below
Xxx Xxxx Xxxxxx
00 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:_______________
This notice shall constitute a "Notice of Committed Borrowing" pursuant to
Section 2.02 of the Credit Agreement dated as of April 9, 1997 and amended and
restated as of March 19, 1999 among Venator Group, Inc., the Banks party
thereto, the Co-Agents party thereto, Bank of America National Trust & Savings
Association, as Documentation Agent, The Bank of New York, as Administrative
Agent (the "Administrative Agent"), LC Agent and Swingline Bank and the Lead
Arrangers party thereto (as further amended from time to time, the "Credit
Agreement"). Capitalized terms not otherwise defined herein have the meanings
ascribed to them in the Credit Agreement.
1. The date of Borrowing will be _____ __, ____.2/
2. The aggregate principal amount of the Borrowing will be
$____________.3/
------------------
1 To be delivered not later than 11:00 A.M. (New York City time) on (x) the
date of each Base Rate Borrowing, (y) the second Domestic Business Day
before each CD Borrowing and (z) the third Euro-Dollar Business Day before
each Euro-Dollar Borrowing.
2 The date of Borrowing shall be a Domestic Business Day in the case of a
Domestic Borrowing or a Euro-Dollar Business Day in case of a Euro-Dollar
Borrowing.
3 Each Borrowing shall be in an aggregate principal amount of $15,000,000 or
any larger multiple of $1,000,000 and further subject to the provisions of
clauses (i) and (ii) of Section 2.01 of the Credit Agreement.
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3. The initial interest rate for the Loans comprising the Borrowing will
be at [a Base Rate] [a CD Rate] [a Euro-Dollar Rate].
[4. The initial Interest Period for the Loans comprising the Borrowing
will be _____.]4
VENATOR GROUP, INC.
By:________________________
Title:
Date:
----------------------
4 This paragraph applies only if the Borrowing is a CD Borrowing or a
Euro-Dollar Borrowing and is subject to the provisions of the definition of
Interest Period.
2
