$200,000,000
CREDIT AGREEMENT
Dated as of September 6, 1996
Among
AUTHENTIC FITNESS PRODUCTS INC.,
as Borrower,
and
AUTHENTIC FITNESS CORPORATION
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
and
THE BANK OF NOVA SCOTIA
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Agents,
and
THE BANK OF NOVA SCOTIA,
as Administrative Agent, Paying Agent, Swing Line Bank and
Fronting Bank,
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Documentation Agent and Collateral Agent
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms....................................................... 1
1.02. Computation of Time Periods................................................. 31
1.03. Accounting Terms............................................................ 31
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. Revolving Credit Advances, Term Loan
and Swing Line Advances. ............................................ 31
2.02. Making the Advances......................................................... 33
2.03. Repayment................................................................... 37
2.04. Reduction of the Commitments................................................ 37
2.05. Prepayments................................................................. 38
2.06. Interest.................................................................... 40
2.07. Fees........................................................................ 40
2.08. Conversion of Advances...................................................... 42
2.09. Increased Costs, Etc........................................................ 42
2.10. Payments and Computations................................................... 44
2.11. Taxes....................................................................... 46
2.12. Sharing of Payments, Etc.................................................... 49
2.13. Letters of Credit........................................................... 49
2.14. Use of Proceeds............................................................. 55
2.15. Defaulting Lenders.......................................................... 55
ARTICLE III
CONDITIONS OF EFFECTIVENESS.............................. 58
3.01. Conditions Precedent to Initial Borrowing................................... 58
3.02. Conditions Precedent to Each
Borrowing and Issuance............................................... 63
3.03. Determinations Under Section 3.01........................................... 64
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties
of Parent and the Borrower........................................... 64
i
SECTION PAGE
ARTICLE V
COVENANTS OF PARENT AND THE BORROWER
5.01. Affirmative Covenants....................................................... 71
5.02. Negative Covenants.......................................................... 78
5.03. Reporting Requirements...................................................... 92
5.04. Financial Covenants......................................................... 98
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default...........................................................101
6.02. Actions in Respect of the
Letters of Credit upon Default.......................................105
ARTICLE VII
THE FACILITY AGENTS
7.01. Authorization and Action....................................................105
7.02. Facility Agents' Reliance, Etc..............................................106
7.03. Scotiabank, GE Capital and Affiliates.......................................106
7.04. Lender Credit Decision......................................................107
7.05. Indemnification.............................................................107
7.06. Successor Facility Agents...................................................108
[7.07. Co-Agents.................................................................108]
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.............................................................109
8.02. Notices, Etc................................................................110
8.03. No Waiver; Remedies.........................................................110
8.04. Costs and Expenses..........................................................110
8.05. Right of Setoff.............................................................112
8.06. Binding Effect..............................................................113
8.07. Assignments and Participations..............................................113
8.08. Governing Law...............................................................117
8.09. Execution in Counterparts...................................................117
8.10. No Liability of the Fronting Bank...........................................117
8.11. Confidentiality.............................................................118
8.12. Release of Collateral.......................................................118
8.13. Merger or Consolidation
of Parent and the Borrower...........................................118
ii
SECTION PAGE
8.14. Waiver of Jury Trial........................................................119
8.15. Press Releases..............................................................119
iii
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of September 6, 1996 among AUTHENTIC
FITNESS PRODUCTS INC., a Delaware corporation (the "Borrower"), AUTHENTIC
FITNESS CORPORATION, a Delaware corporation ("Parent"), the financial
institutions listed on the signature pages hereof as the Lenders, THE BANK OF
NOVA SCOTIA ("Scotiabank") and GENERAL ELECTRIC CAPITAL CORPORATION ("GE
Capital"), as Agents (the "Agents") for the Lenders hereunder, SCOTIABANK, as
Administrative Agent (the "Administrative Agent") and as Paying Agent (the
"Paying Agent") for the Lenders hereunder and as Swing Line Bank and the
Fronting Bank hereunder, and GE Capital, as Documentation Agent (the
"Documentation Agent") and Collateral Agent (the "Collateral Agent") for the
Lenders hereunder.
PRELIMINARY STATEMENTS:
(1) The Borrower and Parent have previously entered into an
Amended and Restated Credit Agreement dated as of March 26, 1996 (as amended,
supplemented or otherwise modified through but not including the date hereof,
the "Existing Credit Agreement") with the lenders party thereto (the "Existing
Lenders"), Citicorp USA, Inc., Scotiabank and Chemical Bank, as managing agents,
Citicorp USA, Inc., as documentation agent and collateral agent, and Scotiabank,
as paying agent, swing line bank and the fronting bank.
(2) The Borrower has requested that the Lenders enter into this
Agreement to refinance the Existing Credit Agreement and the Borrower and Parent
have agreed to enter into this Agreement and terminate the Existing Credit
Agreement in order to (i) refinance the amounts outstanding under the Existing
Credit Agreement, (ii) pay transaction fees and expenses in connection with the
transactions contemplated hereunder, (iii) provide working capital for the
Borrower and its Subsidiaries and (iv) provide funds for other general corporate
purposes permitted herein. The Lenders have indicated their willingness to enter
into this Agreement and to provide the financing on the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Accounts" has the meaning specified in the Security
Agreement.
"Adjusted Net Worth" at any time means Net Worth at such time
plus extraordinary or non-recurring non-cash losses of Parent and its
Subsidiaries on a Consolidated basis in an aggregate amount not to
exceed $20,000,000 during the period from the Effective Date to the
Termination Date plus the aggregate amount (not to exceed $10,000,000)
applied to repurchase common stock of Parent in accordance with the
terms hereof.
"Advance" means a Revolving Credit Advance, a Swing Line Advance
or a Letter of Credit Advance or the Term Loan, provided that, if any
Advance or Advances of the same Class (or portions thereof) are combined
or subdivided pursuant to a Conversion or a selection of Interest
Periods after the initial Interest Period with respect thereto, the term
"Advance" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting
from such subdivision, as the case may be.
"AF Canada" means Authentic Fitness of Canada Inc., a Canadian
federal corporation.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agents" has the meaning specified in the recital of
parties to this Agreement.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance
and such Lender's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the ratio of (i) Average Debt as of such date
to (ii) Consolidated EBITDA of Parent and its Subsidiaries for the four
Fiscal Quarters ended on or most recently prior to such date as set
forth below:
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=========================================================================================
Average Debt to EBITDA Base Rate Eurodollar Rate
Ratio Advances Advances
-----------------------------------------------------------------------------------------
Level I
less than or equal to
2.50 to 1.00 0.000% 0.750%
-----------------------------------------------------------------------------------------
Level II
less than or equal to
3.00 to 1.00 but greater
than 2.50 to 1.00 0.000% 1.000%
-----------------------------------------------------------------------------------------
Level III
less than or equal to
3.50 to 1.00 but greater
than 3.00 to 1.00 0.000% 1.250%
-----------------------------------------------------------------------------------------
Level IV
less than or equal to
4.00 to 1.00 but greater
than 3.50 to 1.00 0.000% 1.500%
-----------------------------------------------------------------------------------------
Level V
less than or equal to
4.50 to 1.00 but greater
than 4.00 to 1.00 0.250% 1.750%
-----------------------------------------------------------------------------------------
Level VI
greater than 4.50 to 1.00 0.500% 2.000%
=========================================================================================
The Applicable Margin for each Advance shall be determined by
reference to the ratio in effect from time to time; provided, however,
that (A) the Applicable Margin at the Effective Date and until three
Business Days after the date on which the Agents receive financial
statements for the fiscal year ending on or about June 30, 1997 pursuant
to Section 5.03(c) and a certificate of the chief financial officer of
the Borrower demonstrating such ratio shall be at Level IV (the "Initial
Applicable Margin Period"), (B) no change in the Applicable Margin shall
be effective until three Business Days after the date on which the
Agents receive financial statements pursuant to Section 5.03(b) or (c)
and a certificate of the chief financial officer of the Borrower
demonstrating such ratio and (C) if the Borrower has not submitted to
the Agents the information described in clause (B) of this proviso as
and when required under Section 5.03(b), or (c), as the case may be, or
if there is an Event of Default, the Applicable Margin shall be at Level
VI for so long as such information has not been received by the Agents
or such Event of Default continues.
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"Appropriate Lender" means, at any time, with respect to any of
the Letter of Credit Facility, the Swing Line Facility, the Revolving
Credit Facility or the Term Loan Facility, a Lender which has a
Commitment with respect to such Facility at such time.
"ASCO" means ASCO International Sourcing Limited or any of its
Subsidiaries or Affiliates or any other Person which, with the prior
written consent of the Agents, provides trade credit to the Borrower
and/or trade letters of credit on behalf of the Borrower in replacement
of the credit facility provided by ASCO International Sourcing Limited
or any of its Subsidiaries or Affiliates to the Borrower (including any
replacement facility which is temporarily being provided concurrently
with the trade credit facility provided by ASCO International Sourcing
Limited or any of its Subsidiaries or Affiliates so long as no new
financial accommodations or extensions or increases of existing
financial accommodations are being provided under such facility with
ASCO International Sourcing Limited or any of its Subsidiaries or
Affiliates (except as part of a replacement facility) beyond 12 months
after the date such replacement facility becomes effective).
"ASCO Debt" means at any time all Debt of the Borrower owing to
ASCO International Sourcing Limited or any of its Subsidiaries or
Affiliates (including, without limitation, the aggregate amount of all
trade payables and undrawn letters of credit) and all Debt of the
Borrower owing to any other Person falling within the meaning of "ASCO"
under the credit facilities provided by such Person to the Borrower with
the prior written consent of the Agents for trade credit to the Borrower
and/or trade letters of credit on behalf of the Borrower in replacement
of the facility provided by ASCO International Sourcing Limited or any
of its Subsidiaries or Affiliates (including any replacement facility
which is temporarily being provided concurrently with the trade credit
facility provided by ASCO International Sourcing Limited or any of its
Subsidiaries or Affiliates so long as no new financial accommodations or
extensions or increases of existing financial accommodations are being
provided under such facility with ASCO International Sourcing Limited or
any of its Subsidiaries or Affiliates (except as part of a replacement
facility) beyond 12 months after the date such replacement facility
becomes effective).
"Asset Sale" means any sale, lease, transfer or other disposition
of any asset by Parent or any of its Subsidiaries, other than (i) sales
of assets in the ordinary course of business (including, without
limitation, sales and other dispositions of assets pursuant to Section
4
5.02(e)(ii), (iv), (vii)(B), (viii) or (ix)), (ii) sales of assets to
the extent the aggregate purchase price therefor (including, without
limitation, all assumption of Debt and the fair market value (as
determined in good faith by a Designated Officer of Parent or the
Borrower, as the case may be) of all noncash consideration) does not
exceed $7,500,000 in the aggregate from the Effective Date through the
Termination Date and (iii) sales of assets pursuant to Section
5.02(e)(v).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Paying Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit B hereto.
"Assignment of Life Insurance Policy" means an assignment of the
key person life insurance policy on Xxxxx X. Xxxxxxx assigned by the
Borrower to the Collateral Agent for the benefit of the Secured Parties
in accordance with Section 5.01(d) and in substantially the form of
Exhibit I hereto.
"Available Amount" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"Average Debt" means, as of any date, the daily arithmetic
average Total Debt outstanding during the four Fiscal Quarters most
recently ended on or prior to such date.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
the higher of:
(a) the rate of interest established by Scotiabank, from
time to time, at its Domestic Lending Office as its base rate for
loans in United States dollars; and
(b) 1/2 of one percent per annum above the Federal
Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank, N.A. at its office
5
at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
4063-8965 or such other account that has been approved by
the Agents and the Paying Agent.
"Borrowing" means a Revolving Credit Borrowing or a Swing Line
Borrowing or the Term Loan, provided that, if pursuant to any Conversion
or any selection of Interest Periods after the initial Interest Period
with respect to any Advances comprising a Borrowing, Advances of the
same Class (or portions thereof) are combined or subdivided, the term
"Borrowing" shall refer to the group of combined Advances of the same
Class and Type and (in the case of Eurodollar Rate Advances) having the
same Interest Period resulting from such combination or to each such
group of Advances resulting from such subdivision.
"Borrowing Base" shall mean, as of any date of determination by
the Agents, from time to time, an amount equal to the sum at such time
of (a) up to eighty-five percent (85%) of Net Receivables and (b) up to
fifty percent (50%) of estimated net inventory, in each case, as of the
Borrower's most recent fiscal month end (or such other date as set forth
in the most recent Borrowing Base Certificate delivered pursuant to
Section 5.03(a) hereof) and certified in a Borrowing Base Certificate,
as such calculation may be adjusted by the Agents based upon additional
information available to them from time to time.
"Borrowing Base Certificate" means a certification of a
Designated Officer of the Borrower delivered in accordance with Section
5.03(a) and in substantially the form of Exhibit J hereto.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"Buying Agency Agreement" means the Buying Agency Agreement,
dated as of May 14, 1990, together with the other related documents,
agreements and security agreements, all as the same may be amended,
supplemented or otherwise modified from time to time, between the
Borrower, AF Canada and ASCO, as amended by the amendment thereto dated
as of June 1, 1992, pursuant to which ASCO has agreed to provide
financing for the purchase of inventory by the Borrower and certain of
its Subsidiaries on the terms set forth in such Agreement.
"Canadian Subsidiary" means any Subsidiary of Parent organized
under the laws of Canada or any province or territory thereof.
6
"Capital Expenditures" means, for any Person, any expenditures or
costs made by such Person for the acquisition, maintenance or repair of
fixed or capital assets (which are required to be capitalized on the
balance sheet of such Person in accordance with GAAP), including,
without limitation, the incurrence or assumption of any Debt (other than
Capitalized Lease Obligations) in respect of such fixed or capital
asset, and, without double counting, any payment made in respect of such
incurrence or assumption.
"Capital Issuance" means the sale or issuance by any Loan Party
or any of its Subsidiaries of any Debt or capital stock, any securities
convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock by Parent or any of its
Subsidiaries other than any such sale or issuance by a wholly owned
Subsidiary of the Borrower to the Borrower or to another wholly owned
Subsidiary of the Borrower.
"Capitalized Lease Obligations" of any Person shall at any time
mean all Obligations under Capitalized Leases of such Person, in each
case taken at the amount thereof accounted for as liabilities in
accordance with GAAP at such time.
"Capitalized Leases" has the meaning specified in
clause (e) of the definition of "Debt".
"Cash Collateral Account" has the meaning specified in
the Security Agreement.
"Cash Equivalents" means any of the following, to the extent
owned by any Loan Party or any Subsidiary of a Loan Party free and clear
of all Liens (except those created by the Collateral Documents): (a)
securities issued, or that are directly and fully guaranteed or insured,
by the United States Government or any agency or instrumentality thereof
having maturities of not more than 12 months from the date of
acquisition, (b) time deposits and certificates of deposit having
maturities of not more than 12 months from the date of acquisition of
(i) any Lender, (ii) any other domestic commercial bank having capital
and surplus in excess of $500,000,000, the holding company of which has
outstanding commercial paper meeting the requirements specified in
clause (d) below or (iii) any foreign bank which (1) has the credit
rating under a rating service of recognized standing of the jurisdiction
of its organization that is at least the equivalent of an investment
grade rating, or, if such credit rating is not available, is a first
class foreign bank which has capital and surplus in excess of
$200,000,000 or (2) which has been approved by the Agents, (c)
repurchase agreements with a term of not more
7
than seven days for underlying securities of the types described in
clauses (a) and (b) above entered into with any Lender or any other bank
meeting the qualifications specified in clause (b) above or with
securities dealers of recognized national standing; and (d) commercial
paper rated (as of the date of acquisition thereof) at least A-1 or the
equivalent thereof by S&P and at least P-1 or the equivalent thereof by
Xxxxx'x and maturing within 12 months after the date of its acquisition.
"Cash Interest Expense" means, for any period, interest expense
net of interest income on all Debt of Parent and its Subsidiaries, in
each case determined for such period on a Consolidated basis for Parent
and its Subsidiaries in accordance with GAAP and including, without
limitation, to the extent not otherwise included in accordance with
GAAP, (a) interest expense in respect of Debt resulting from Advances,
(b) the interest component of obligations as lessee under Capitalized
Leases, (c) commissions, discounts and other fees and charges payable in
connection with letters of credit, (d) the net payment, if any, payable
in connection with interest rate hedge agreements and other interest
rate protection contracts and (e) fees paid pursuant to Section 2.07(a),
but excluding, in each case, (x) amortization of original issue
discount, (y) the interest portion of any deferred payment obligation
and (z) other interest not payable in cash.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Class" means, with respect to any Advance or Borrowing, whether
such Advance or Borrowing is a Revolving Credit Advance or Borrowing, a
Swing Line Advance or Borrowing, a Letter of Credit Advance or the Term
Loan.
"Co Agents" shall mean those Lenders, if any, that from time to
time are designated by the Facility Agents as Co-Agents.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property of Parent or any of its Subsidiaries
that is subject to any Lien in favor of the Collateral Agent, the
Lenders or any other Secured Party securing or purporting to secure the
Obligations of the Loan Parties under the Loan Documents and the Hedge
Agreements.
"Collateral Agent" has the meaning specified in the recital of
the parties to this Agreement.
"Collateral Documents" means the Security Agreement, the
Trademark, Patent and Copyright Security Agreement, the Assignment of
Life Insurance Policy, the Lockbox Account
8
Letters (as defined in the Security Agreement), the Intercreditor
Agreement, the Trade Credit Intercreditor Agreement and any other
agreements in respect of the Collateral for the benefit of the Secured
Parties.
"Collateral Release Date" has the meaning specified in Section
8.12.
"Commitment" means a Revolving Credit Commitment, a Letter of
Credit Commitment or a Term Loan Commitment.
"Confidential Information" means information that the Borrower or
Parent furnishes to any Facility Agent or Lender on a confidential
basis, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to
such Facility Agent or Lender from a source other than the Borrower or
Parent.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"Current Liabilities" of any Person means (a) all Debt of such
Person except Funded Debt and Debt in respect of Revolving Credit
Advances, Letter of Credit Advances, Swing Line Advances and the Term
Loan, (b) all amounts of Funded Debt of such Person required to be paid
or prepaid within one year after the date of determination and (c) all
other items (including taxes accrued as estimated) that in accordance
with GAAP would be classified as current liabilities of such Person
other than Debt of such Person of the type referred to in clauses (f)
and (h) in the definition of Debt (or in clauses (i) and (j) in the
definition of Debt to the extent that the underlying Debt of other
Persons in respect of which such Debt arises is Debt of the type
referred to in such clauses (f) and (h)).
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness of such Person for borrowed
money,
(b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables
not overdue by more than 90 days incurred in the ordinary course
of such Person's business), including, without limitation, the
ASCO Debt and the Trade Credit Facility,
9
(c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments,
(d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement
with respect to property acquired by such Person (other than
trade payables not overdue by more than 90 days incurred in the
ordinary course of such Person's business) even though the rights
and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such
property,
(e) all Obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as
capital leases ("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or
similar facilities,
(g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any
capital stock of or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to
acquire such capital stock, valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends,
(h) all Obligations of such Person in respect of
Hedge Agreements,
(i) all Debt of others of the kinds referred to in clauses
(a) through (h) above guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (A) to pay or
purchase such Debt or to advance or supply funds for the payment
or purchase of such Debt, (B) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss,
(C) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such
services are rendered) or (D) otherwise to assure a creditor
against loss (all of the foregoing being "Guarantee
Obligations"), and
10
(j) all Debt referred to in clauses (a) through (h) above
secured by (or for which the holder of such Debt has an existing
right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any
time, the amount of any Advance required to be made by such Lender to
the Borrower pursuant to Section 2.01 at or prior to such time which has
not been so made as of such time; provided, however, any Advance made by
the Paying Agent for the account of such Lender pursuant to Section
2.02(e) shall not be considered a Defaulted Advance even if, at such
time, such Lender shall not have reimbursed the Paying Agent therefor as
provided in Section 2.02(e). In the event that a portion of a Defaulted
Advance shall be deemed made pursuant to Section 2.15(a), the remaining
portion of such Defaulted Advance shall be considered a Defaulted
Advance originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at any time,
any amount required to be paid by such Lender to any Facility Agent or
any other Lender hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender to (a)
the Swing Line Bank pursuant to Section 2.02(b) to purchase a portion of
a Swing Line Advance made by the Swing Line Bank, (b) the Fronting Bank
pursuant to Section 2.13(c) to purchase a portion of a Letter of Credit
Advance made by the Fronting Bank, (c) the Paying Agent pursuant to
Section 2.02(e) to reimburse the Paying Agent for the amount of any
Advance made by the Paying Agent for the account of such Lender, (d) any
other Lender pursuant to Section 2.12 to purchase any participation in
Advances owing to such other Lender and (e) any Facility Agent pursuant
to Section 7.05 to reimburse such Facility Agent for such Lender's
ratable share of any amount required to be paid by the Lenders to such
Facility Agent as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
11
"Defaulting Lender" means, at any time, any Lender that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take or be the subject of any action or proceeding of a type described
in Section 6.01(f).
"Designated Officer" of any Loan Party means the chief executive
officer, chief financial officer, chief operating officer or treasurer
of such Loan Party.
"Disclosed Litigation" means the litigation described on Schedule
4.01(i).
"Documentary Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier
of Inventory to the Borrower or any of its Subsidiaries to effect
payment for such Inventory, the conditions to drawing under which
include the presentation to the Fronting Bank of negotiable bills of
lading, invoices and related documents sufficient, in the reasonable
judgment of the Fronting Bank, to create a valid and perfected Lien on
such Inventory.
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Paying Agent.
"Domestic Subsidiary" means any Subsidiary of Parent that is not
a Foreign Subsidiary.
"EBITDA" means, for any period, net income (or net loss) from
operations (determined without giving effect to extraordinary or
nonrecurring non cash gains or losses (which include, without
limitation, (i) such losses incurred as a result of the write-down of
assets and (ii) charges for special executive compensation)) plus, to
the extent deducted in calculating such net income (loss), the sum of
(a) Interest Expense, (b) income tax expense, (c) depreciation expense
and (d) amortization expense, in each case determined in accordance with
GAAP.
"Effective Date" means the first date on which the conditions
specified in Sections 3.01 and 3.02 have been satisfied.
"Eligible Assignee" means (i) a wholly owned Subsidiary
of a Lender or of any Person that directly or indirectly
12
controls a Lender; and (ii) any other Person approved by the Agents, the
Paying Agent and the Fronting Bank and the Borrower, such approval not
to be unreasonably withheld; provided, however, that an Affiliate of the
Borrower shall not qualify as an Eligible Assignee; and further
provided, however, upon the occurrence and the continuation of an Event
of Default, no such approval of the Borrower shall be required.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
noncompliance or violation, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law or any
Environmental Permit including, without limitation, (a) any claim by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any
Environmental Law and (b) any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree or award relating
to the environment, human exposure to chemical substances or Hazardous
Materials, including, without limitation, CERCLA, the Resource
Conservation and Recovery Act, the Hazardous Materials Transportation
Act, the Clean Water Act, the Toxic Substances Control Act, the Clean
Air Act, the Safe Drinking Water Act, the Atomic Energy Act and the
Federal Insecticide, Fungicide and Rodenticide Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a)(i) the
occurrence of a reportable event, within the meaning of Section 4043 of
ERISA, with respect to any Plan of such Person or any of its ERISA
Affiliates unless the 30-day
13
notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section 4043(b) of
ERISA (without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan of such Person or any of its ERISA Affiliates, and an
event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the provision by the
administrator of any Plan of such Person or any of its ERISA Affiliates
of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates
in the circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (e) the failure by
such Person or any of its ERISA Affiliates to make a payment to a Plan
required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates
requiring the provision of security to such Plan, pursuant to Section
307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA, other than subsection (a)(4)
thereof, that could constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the Borrower and
the Paying Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum at which deposits in U.S. dollars are offered by
the principal office of Scotiabank in London, England to prime banks in
the
14
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to Scotiabank's Eurodollar Rate Advance comprising part of such
Borrowing to be outstanding during such Interest Period and for a period
equal to such Interest Period by (b) a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing means
the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Taxes" means, in the case of each Lender, franchise
taxes and taxes upon or determined by reference to such Lender's net
income (including, without limitation, branch profit taxes), in each
case imposed by the United States or any political subdivision or taxing
authority thereof or therein or by any jurisdiction in which such Lender
has its Applicable Lending Office, is resident or in which such Lender
is organized or has its principal or registered office and, in the case
of each Facility Agent, franchise taxes and net income taxes (including,
without limitation, branch profits taxes) imposed by the United States
or by the state or foreign jurisdiction under the laws of which such
Facility Agent is organized (or by any political subdivision of such
state or foreign jurisdiction).
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the Preliminary
Statements.
15
"Existing Letters of Credit" has the meaning specified in Section
2.13(a).
"Existing Revolving Credit Lenders" means each "Revolving Credit
Lender" under the Existing Credit Agreement.
"Facility" means the Revolving Credit Facility, the Term Loan
Facility, the Swing Line Facility or the Letter of Credit Facility.
"Facility Agents" means each of the Agents, the Administrative
Agent, the Paying Agent, the Documentation Agent and the Collateral
Agent, together in each case with any successor or successors of any
thereof appointed pursuant to Article VII.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Paying Agent from three federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of Parent and its
Consolidated Subsidiaries ending on or about March 31, June 30,
September 30 or December 31 of each year.
"Fiscal Year" means a fiscal year of Parent and its Consolidated
Subsidiaries ending on or about June 30 of each year.
"Foreign Subsidiary" means a Subsidiary of Parent other than a
Subsidiary organized under the laws of the United States or any state or
territory thereof.
"Fronting Bank" means Scotiabank or any other Lender approved by
the Borrower, the Agents and the Paying Agent, such approval not to be
unreasonably withheld, that is a commercial bank, acting through a
domestic branch, and has a Letter of Credit Commitment, as issuer of a
Letter of Credit.
"Funded Debt" of any Person means Debt of such Person that by its
terms matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such
16
Person, to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year after
such date, including, without limitation, all amounts of Funded Debt of
such Person required to be paid or prepaid within one year after the
date of its creation.
"GAAP" has the meaning specified in Section 1.03.
"GE Capital" has the meaning specified in the recital of parties
to this Agreement.
"Guarantee Obligations" has the meaning specified in clause (i)
of the definition of Debt.
"Guaranties" means the Parent Guaranty and the Subsidiary
Guaranties.
"Guarantors" means Parent and each of its Domestic Subsidiaries
(other than the Borrower).
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and radon gas, (b) any
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "contaminants" or "pollutants," or words of similar
import, under any Environmental Law and (c) any other substance exposure
to which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Person with which the Borrower enters into
a Hedge Agreement permitted under Article V that, at the time of
entering such interest rate Hedge Agreement is, or subsequently becomes,
(i) a Lender, (ii) a wholly owned Subsidiary of a Lender or of any
Person that directly or indirectly controls a Lender or (iii) an
Affiliate of a Lender, provided that with respect to any Hedge Bank
described in clause (iii) above that is not also described in clause
(ii) above, the obligations of such Hedge Bank under any such Hedge
Agreement to which it is a party shall be fully guaranteed by the Lender
of which it is an Affiliate.
17
"Implied Debt Rating" means the rating assigned by S&P to
Parent's "implied senior debt" from time to time, as notified to Parent
by S&P in a letter issued by S&P, or, if such rating is unavailable, the
equivalent rating assigned by Moody's to Parent's "implied senior debt",
as notified in writing to Parent by Moody's. For purposes of this
Agreement, the following is the equivalent rating by Moody's for each
rating by S&P:
S&P Moody's
--- -------
BB- Ba3
BB Ba2
BB+ Ba1
BBB- Baa3
BBB Baa2
"Indebtedness for Borrowed Money" of any Person means all Debt of
such Person for borrowed money or evidenced by notes, bonds, debentures
or other similar instruments, all Obligations of such Person for the
deferred purchase price of any property, service or business (other than
trade accounts payable not overdue by 90 days except for ASCO Debt and
the Trade Credit Facility) incurred in the ordinary course of business
and constituting Current Liabilities, and all Obligations of such Person
under Capitalized Leases and finance leases and including, in any event,
without duplication, ASCO Debt and the Trade Credit Facility.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Initial Applicable Margin Period" has the meaning specified in
the definition of "Applicable Margin."
"Insufficiency" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Intercreditor Agreement" means the Intercreditor Agreement,
dated as of March 26, 1996, among ASCO International Sourcing Limited,
Soaring Force Limited, Asco General Supplies (Far East) Ltd. (Bahamas),
and Citicorp USA, Inc.
"Interest Expense" means, with respect to any Person for any
period, the excess, if any, of (i) interest expense (whether cash or
accretion) of such Person during such
18
period determined in accordance with GAAP, and shall include in any
event, without limitation, interest expense with respect to Indebtedness
for Borrowed Money and payments under Hedge Agreements with respect to
interest rates over (ii) interest income of such Person for such period,
including payments received under Hedge Agreements with respect to
interest rates.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date
of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice received
by the Paying Agent not later than 1:00 P.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(a) the Borrower may not select any Interest
Period that ends after the Termination Date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day,
unless the Borrower and the Paying Agent otherwise agree; and
(d) whenever the first day of any Interest Period occurs
on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds
such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month unless the Borrower and the Paying Agent otherwise agree.
19
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations, other securities or the assets
comprising a substantial part or all of a business of such Person, any
capital contribution to such Person or any other investment in such
Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clauses (i) and (j)
of the definition of "Debt" in respect of such Person.
"L/C Cash Collateral Account" has the meaning specified in the
Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.13(d).
"Lease Obligations" of any Person means obligations as lessee for
the rental or hire of real or personal property (other than Capitalized
Lease Obligations) as determined in accordance with GAAP and consistent
with all regular, periodic and special reports, and all registration
statements, that such Person or any of its Subsidiaries files with the
Securities and Exchange Commission, or any governmental authority that
may be substituted therefor, or with any national securities exchange.
"Lenders" means the Lenders listed on the signature pages hereof
and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07.
"Letter of Credit Advance" means an advance made by the Fronting
Bank, including, for purposes of Section 2.03(c), any such Advance (or
portion thereof) assigned to any Lender pursuant to Section 2.13(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.13(b).
"Letter of Credit Commitment" means, with respect to the Fronting
Bank at any time, the amount set forth opposite the Fronting Bank's name
on Schedule I hereto under the caption "Letter of Credit Commitment,"
which as of the date hereof is $50,000,000, or, in the case of any other
Lender approved by the Borrower, the Agents and the Paying Agent (such
approval not to be unreasonably withheld), set forth
20
for such Lender in the Register maintained by the Paying Agent pursuant
to Section 8.07(c) as such Lender's "Letter of Credit Commitment", as
such amount may be reduced at or prior to such time pursuant to Section
2.04.
"Letter of Credit Facility" means the amount of the Letter of
Credit Commitment of the Fronting Bank.
"Letters of Credit" has the meaning specified in Section 2.13(a).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"Loan Documents" means (a) for purposes of this Agreement, the
Notes and any amendments, supplements or other modifications hereof or
thereof and for all other purposes other than for purposes of the
Collateral Documents and the Guaranties, (i) this Agreement, (ii) the
Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) each
Letter of Credit Agreement and (vi) each L/C Related Document and (b)
for purposes of the Collateral Documents and the Guaranties, (i) this
Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral
Documents, (v) each Letter of Credit Agreement, (vi) each L/C Related
Document, (vii) the interest rate Hedge Agreements entered into by the
Borrower with Hedge Banks, and (viii) the Trade Refinancing Facility, in
the case of each of the foregoing agreements referred to in clause (a)
or (b) as it may be amended, supplemented or otherwise modified from
time to time and any facilities or agreements in replacement thereof.
"Loan Parties" means the Borrower and the Guarantors.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Parent and
its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or of Parent and
its Subsidiaries taken as a whole, (b) the rights and remedies of any
Facility Agent or Lender under any Loan Document or (c) the ability of
any
21
Loan Party to perform its Obligations under any Loan Document to which
it is or is to be a party.
"Material Contracts" means the Buying Agency Agreement, the
Speedo License Agreements and the Intercreditor Agreement.
"Material Subsidiary" means, at any time, a Subsidiary of Parent
(other than the Borrower) having (i) at least $1,000,000 in total assets
(determined as of the last day of the most recent Fiscal Quarter of such
Subsidiary) or (ii) EBITDA of at least $500,000 for the 12-month period
ending on the last day of the most recent Fiscal Quarter of such
Subsidiary.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of
its ERISA Affiliates is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of such Person or any of its ERISA Affiliates and at least
one Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any Asset Sale or
Capital Issuance, the aggregate amount of cash received from time to
time by or on behalf of Parent or any of its Subsidiaries in connection
with such transaction after deducting therefrom only (a) reasonable and
customary brokerage commissions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions, (b) the
amount of taxes payable in connection with or as a result of such
transaction, (c) appropriate amounts to be provided by such Loan Party
or Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such
transaction and retained by such Loan Party or Subsidiary after such
transaction, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations
associated with the assets sold or disposed of in such transaction and
(d) the amount of any Debt secured by a Lien on such asset that, by the
terms of
22
such transaction, is required to be repaid upon such disposition,
provided that (i) in each case, the amounts so deducted are, at the time
of receipt of such cash, properly attributable to such transaction or to
the asset that is the subject thereof and (ii) in each case (A) with
respect to clauses (a) and (d), the amounts so deducted are, at the time
of receipt of such cash, actually paid to a Person that is not an
Affiliate of Parent and (B) with respect to clause (c), to the extent,
but only to the extent, the amounts so deducted are in respect of
existing or potential liabilities or obligations, payable to a Person
that is not an Affiliate of Parent.
"Net Receivables" at any time of determination means gross
domestic trade receivables plus domestic accounts receivable-other
(trade related and insurance claims), less domestic allowance for
doubtful accounts, domestic reserves for allowances and domestic
accounts receivable returns, as of the date of determination.
"Net Worth" at any time means the excess of total assets of
Parent and its Subsidiaries at such time over total liabilities of
Parent and its Subsidiaries at such time, in each case as determined on
a Consolidated basis in accordance with GAAP.
"Note" means a Revolving Credit Note or a Term Note.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.13(b)(i).
"Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).
"Obligation" means, with respect to any Person, any obligation of
such Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to
in Section 6.01(f). Without limiting the generality of the foregoing,
the Obligations of the Loan Parties under the Loan Documents include (a)
the obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, attorneys' fees and disbursements, indemnities
and other amounts payable by any Loan Party under any Loan Document and
(b) the obligation to reimburse any amount in respect of
23
any of the foregoing that any Lender, in its sole discretion, may elect
to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Parent" has the meaning specified in the recital of parties to
this Agreement.
"Parent Guaranty" has the meaning specified in Section
3.01(f)(ii).
"Paying Agent" has the meaning specified in the recital of
parties to this Agreement.
"Paying Agent's Account" means the account of the Paying Agent
maintained by the Paying Agent with Scotiabank at its office at Xxx
Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Loan Management Account No.
1561-16, Reference: Authentic Fitness.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Foreign Debt Issuances" means any issuance of
Indebtedness for Borrowed Money by Foreign Subsidiaries owing to
non-Affiliates of Parent.
"Permitted Liens" means the following:
(a) Liens, other than in favor of the PBGC, arising out of
judgments or awards in respect of which Parent or any of its
Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review and in respect of which there shall not
have occurred a period of 10 consecutive days during which a stay
of enforcement of such judgment or award shall not have been in
effect pending such appeal or proceedings for review, provided it
shall have set aside on its books adequate reserves, in
accordance with GAAP, with respect to such judgment or award and
provided further that the aggregate amount secured by such Liens
does not exceed $1,000,000 in any one case or $2,000,000 in the
aggregate;
(b) Liens for taxes, assessments or governmental charges
or levies, provided payment thereof shall not at the time be
required in accordance with the provisions of Section 5.01(b);
(c) deposits, Liens or pledges to secure payments
of workmen's compensation and other payments,
24
unemployment and other insurance, old-age pensions or other
social security obligations, or the performance of bids, tenders,
leases, contracts (other than contracts for the payment of
money), public or statutory obligations, surety, stay or appeal
bonds, or other similar obligations arising in the ordinary
course of business;
(d) mechanics', workmen's, repairmen's, warehousemen's,
vendors' or carriers' Liens or other similar Liens arising in the
ordinary course of business and securing sums which are not past
due, or deposits or pledges to obtain the release of any such
Liens;
(e) statutory landlord's Liens under leases to which
Parent or any of its Subsidiaries is a party; and
(f) zoning restrictions, easements, rights of way,
licenses and restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair
the use of such property in the normal operation of the business
of Parent or any of its Subsidiaries or the value of such
property for the purpose of such business.
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon
any distribution of such corporation's assets, whether by dividend or
upon liquidation.
"Pro Rata Share" of any amount means, with respect to any Lender
at any time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Revolving Credit Commitment or
Term Loan Commitment, as the case may be, at such time and the
denominator of which is the Revolving Credit Facility or Term Loan
Facility, as the case may be, at such time.
"Redeemable" means, with respect to any capital stock, Debt or
other right or Obligation, any such right or Obligation that (a) the
issuer has undertaken to redeem at a
25
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"Register" has the meaning specified in Section 8.07(c).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Amount" has the meaning set forth in Section
2.05(b)(i).
"Required Lenders" means, at any time, Lenders owed, allocated or
holding more than 51% of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time, (b) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (c) the
aggregate Unused Revolving Credit Commitments at such time; provided,
however, if any Lender shall be a Defaulting Lender at such time, there
shall be excluded from the determination of Required Lenders at such
time (i) the aggregate principal amount of the Advances owed to such
Lender outstanding at such time, (ii) the aggregate Available Amount of
all Letters of Credit outstanding at such time which is allocable to
such Lender and (iii) the aggregate Unused Revolving Credit Commitments
of such Lender at such time. For purposes of this definition, the
Available Amount of each Letter of Credit shall be considered allocated,
and the outstanding principal amount of each Letter of Credit Advance
and each Swing Line Advance shall be considered to be owed, to the
Lenders ratably in accordance with their respective Revolving Credit
Commitments then outstanding or, if the Revolving Credit Commitments
shall have been terminated in their entirety, their respective Revolving
Credit Commitments outstanding immediately prior to such termination.
"Revolving Credit Advance" has the meaning specified in Section
2.01(a).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Lenders.
"Revolving Credit Commitment" means, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or, if
such Lender has entered into one or more Assignments and Acceptances,
the amount set forth for such Lender in the Register maintained by the
26
Paying Agent pursuant to Section 8.07(c) as such Lender's "Revolving
Credit Commitment," as such amount may be reduced at or prior to such
time pursuant to Section 2.04.
"Revolving Credit Facility" means, at any time, the aggregate
amount of the Lenders' Revolving Credit Commitments at such time, which
at the date hereof is $150,000,000.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Lender, in substantially the form
of Exhibit C-1 hereto, evidencing the aggregate indebtedness of the
Borrower to such Revolving Lender resulting from the Revolving Credit
Advances made by such Revolving Lender.
"Revolving Lenders" shall mean those Lenders having Revolving
Credit Commitments.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies.
"Scotiabank" has the meaning specified in the recital of parties
to this Agreement.
"Secured Parties" means the Facility Agents, the Lenders, the
Hedge Banks and the Trade Refinancing Lenders.
"Security Agreement" has the meaning specified in Section
3.01(f)(iv).
"Single Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of such Person or any of its ERISA Affiliates and no
Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature and (d) such Person is not engaged in business or a
transaction, and is not about to
27
engage in business or a transaction, for which such Person's property
would constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Speedo License Agreements" means (i) the License Agreement dated
May 10, 1990, as amended and assigned, among Speedo Holdings, B.V., a
company incorporated under the laws of the Netherlands ("SHBV"), as
successor-in-interest to Speedo International Limited and Speedo
International B.V., Warnaco, Inc., a Delaware corporation ("Warnaco"),
and Warnaco International Inc., a Delaware corporation ("WII"), and (ii)
the License Agreement dated May 10, 1990, as amended and assigned,
between SHBV, as successor-in-interest to Speedo Knitting Xxxxx Pty.
Limited, Warnaco and WII pursuant to which the Borrower (pursuant to an
assignment thereof from Warnaco and WII to the Borrower) has an
exclusive, in-perpetuity license to use the SPEEDO trademarks and trade
names (as defined therein) in the United States, Canada, Mexico and the
Caribbean Islands.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Documentary Letter of
Credit.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of
(a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or
profits of such partnership or joint venture or (c) the beneficial
interest in such trust or estate is at the time directly or indirectly
owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guaranty" has the meaning specified in Section
3.01(f)(iii).
"Supermajority of Lenders" means, at any time, Lenders owed,
allocated or holding more than 75% of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time and (c) the aggregate Unused Revolving Credit Commitments at such
time; provided, however, if any Lender shall be a Defaulting
28
Lender at such time, there shall be excluded from the determination of
Supermajority of Lenders at such time (i) the aggregate principal amount
of the Advances owed to such Lender outstanding at such time, (ii) the
aggregate Available Amount of all Letters of Credit outstanding at such
time which is allocable to such Lender and (iii) the aggregate Unused
Revolving Credit Commitments of such Lender at such time. For purposes
of this definition, the Available Amount of each Letter of Credit shall
be considered allocated, and the outstanding principal amount of each
Letter of Credit Advance and each Swing Line Advance shall be considered
to be owed, to the Lenders ratably in accordance with their respective
Revolving Credit Commitments then outstanding or, if the Revolving
Credit Commitments shall have been terminated in their entirety, their
respective Revolving Credit Commitments outstanding immediately prior to
such termination.
"Swing Line Advance" means an advance made by the Swing Line Bank
pursuant to Section 2.01(c).
"Swing Line Bank" means Scotiabank (and its successors and
assigns), provided that Scotiabank (and any such successors and assigns
as Swing Line Bank hereunder) may resign, and thereupon be released from
its obligations, as Swing Line Bank under this Agreement upon receipt by
the Borrower and the Agents, in writing and in a form reasonably
satisfactory to the Borrower, the Agents and the Paying Agent, of the
assumption by another Lender of the rights and obligations of the Swing
Line Bank hereunder.
"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section
2.01(c).
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the earlier of September 1, 2001 and the
date of termination in whole of all of the Commitments and the Swing
Line Facility pursuant to Section 2.04 or 6.01.
"Term Lenders" shall mean those Lenders having Term Loan
Commitments.
"Term Loan" has the meaning specified in Section 2.01(b).
"Term Loan Commitment" means, with respect to any Lender at any
time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term
29
Loan Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, the amount set forth for such Lender in the
Register maintained by the Paying Agent pursuant to Section 8.07(c) as
such Lender's "Term Loan Commitment," as such amount may be reduced at
or prior to such time pursuant to Section 2.04.
"Term Loan Facility" means, at any time, the aggregate amount of
the Lenders' Term Loan Commitments at such time, which as of the date
hereof is $50,000,000.
"Term Note" means a promissory note of the Borrower payable to
the order of any Term Lender, in substantially the form of Exhibit C-2
hereto, evidencing the aggregate indebtedness of the Borrower to such
Term Lender resulting from the Advance under the Term Loan Facility made
by such Term Lender.
"Total Debt" outstanding on any date means the aggregate
principal amount of all Debt of the Parent and its Subsidiaries on a
Consolidated basis, outstanding on such date, other than ASCO Debt and
the Trade Credit Facility and Debt of the type referred to in clauses
(f) and (h) of the definition of Debt (or in clauses (i) and (j) of the
definition of Debt to the extent that the underlying Debt of other
Persons in respect of which such Debt arises is Debt of the type
referred to in such clauses (f) and (h)).
"Trade Credit Facility" means a Trade L/C Facility and a Trade
Refinancing Facility entered into by the Borrower and one or more
Lenders party thereto.
"Trade Credit Intercreditor Agreement" means an intercreditor
agreement to be entered into between the Collateral Agent and the agent
under the Trade Credit Facility in form and substance satisfactory to
the Collateral Agent and the Paying Agent.
"Trade L/C Facility" means a letter of credit facility on terms
and conditions reasonably acceptable to the Collateral Agent and Paying
Agent between the Borrower and one or more Lenders pursuant to which one
or more issuing banks thereunder shall issue trade letters of credit for
the account of the Borrower for a period not to exceed three months.
"Trademark, Patent and Copyright Security Agreement"
has the meaning specified in Section 3.01(f)(iv)(B).
"Trade Refinancing Facility" means a revolving credit facility on
terms and conditions reasonably acceptable to the Collateral Agent and
Paying Agent between the Borrower and one or more Lenders pursuant to
which such Lenders shall
30
make advances with a maturity for any such advance not to exceed 120
days from time to time to finance outstanding reimbursement obligations
arising under the Trade L/C Facility.
"Trade Refinancing Lenders" means the lenders party to the Trade
Refinancing Facility.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unused Revolving Credit Commitment" means, with respect to any
Lender at any time, (a) the lesser of (i) such Lender's Revolving Credit
Commitment at such time and (ii) such Lender's Pro Rata Share of the
Revolving Credit Commitment times the Borrowing Base at such time minus
(b) the sum of (i) the aggregate principal amount of all outstanding
Revolving Credit Advances, Letter of Credit Advances and Swing Line
Advances made by such Lender (in its capacity as a Lender) plus (ii)
such Lender's Pro Rata Share of (A) the aggregate Available Amount of
all Letters of Credit outstanding at such time, (B) the aggregate
principal amount of all outstanding Letter of Credit Advances made by
the Fronting Bank pursuant to Section 2.13(c) and (C) the aggregate
principal amount of all outstanding Swing Line Advances made by the
Swing Line Bank pursuant to Section 2.01(c).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the
happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1)
of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with
31
those applied in the preparation of the audited and unaudited financial
statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. Revolving Credit Advances, Term Loan Advance and
Swing Line Advances. (a) The Revolving Credit Advances. Each Revolving Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the Effective Date until the
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Credit Commitment on such Business Day. Each Revolving Credit
Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances
made by the Lenders ratably according to their Revolving Credit Commitments.
Within the limits of each Lender's Unused Revolving Credit Commitment in effect
from time to time, the Borrower may borrow under this Section 2.01(a), prepay
pursuant to Section 2.05(a) and reborrow under this Section 2.01(a).
(b) Term Loan. (i) Subject to the terms and conditions hereof,
each Term Lender agrees to make a term loan on the Effective Date to Borrower
(the "Term Loan") in the original principal amount of its Term Loan Commitment.
The obligations of each Term Lender hereunder shall be several and not joint.
The Term Loan shall be evidenced by Term Notes, and Borrower shall execute and
deliver a Term Note to each Term Lender. Each Term Note shall represent the
obligation of Borrower to pay the amount of the applicable Term Lender's Term
Note Commitment, together with interest thereon as prescribed in Section 2.06.
(ii) Borrower shall pay the principal amount of the Term Loan in
ten (10) consecutive semi-annual installments on June 30 and December 31 of each
year and on the Termination Date, commencing on June 30, 1997, as follows:
Payment Installment
Date Amount
------- ------------
June 30, 1997 $2,500,000
December 31, 1997 $2,500,000
June 30, 1998 $3,750,000
December 31, 1998 $3,750,000
June 30, 1999 $5,000,000
December 31, 1999 $5,000,000
June 30, 2000 $6,250,000
32
December 31, 2000 $6,250,000
June 30, 2001 $7,500,000
September 1, 2001 $7,500,000
Notwithstanding the foregoing, the aggregate outstanding
principal balance of the Term Loan shall be due and payable in full in
immediately available funds in dollars on the Termination Date, if not sooner
paid in full.
(iii) Each payment of principal with respect to the Term Loan
shall be paid to the Paying Agent for the ratable benefit of each Term Lender,
ratably in proportion to each such Term Lender's respective Term Loan
Commitment.
(c) The Swing Line Advances. The Swing Line Bank agrees, on the
terms and conditions hereinafter set forth, to make Swing Line Advances to the
Borrower from time to time on any Business Day during the period from the
Effective Date until the Termination Date (i) in an aggregate amount for all
such Advances not to exceed at any time outstanding $10,000,000 (the "Swing Line
Facility") and (ii) in an amount for each such Advance not to exceed the
aggregate of the Unused Revolving Credit Commitments of the Lenders on such
Business Day. No Swing Line Advance shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance. Each Swing Line Borrowing
shall be in a minimum amount of $100,000 or an integral multiple of $10,000 in
excess thereof and shall be made as a Base Rate Advance. Within the limits of
the Swing Line Facility and within the limits referred to in clause (ii) above,
the Borrower may borrow under this Section 2.01(c), repay pursuant to Section
2.03 or prepay pursuant to Section 2.05(a) and reborrow under this Section
2.01(c).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.13, each Borrowing shall be made on notice,
given not later than 1:00 P.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of Eurodollar Rate
Advances, or on the Business Day prior to the date of the proposed Borrowing in
the case of Base Rate Advances, by the Borrower to the Paying Agent, which shall
give to each Appropriate Lender prompt notice thereof by telex, telecopier or
cable. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by
telephone, telex, telecopier or cable, confirmed immediately in writing, in
substantially the form of Exhibit A hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made,
(iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. In the case of a
proposed Borrowing comprised of Eurodollar Rate Advances, the Paying Agent shall
promptly notify
33
each Appropriate Lender of the applicable interest rate under Section
2.06(a)(ii). Each Appropriate Lender shall, before 2:00 P.M. (New York City
time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Paying Agent at the Paying Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in accordance
with the respective Commitments of such Lender and the other Appropriate
Lenders. After the Paying Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Paying Agent will make
such funds available to the Borrower by crediting the Borrower's Account;
provided, however, that, in the case of any Revolving Credit Borrowing, the
Paying Agent shall first make a portion of such funds equal to the aggregate
principal amount of any Swing Line Advances and Letter of Credit Advances made
by the Swing Line Bank or the Fronting Bank, as the case may be, and by any
other Lender and outstanding on the date of such Revolving Credit Borrowing,
plus interest accrued and unpaid thereon to and as of such date, available to
the Swing Line Bank or the Fronting Bank, as the case may be, and such other
Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.
(b) (i) Each Swing Line Borrowing shall be made on notice, given
not later than 1:00 P.M. (New York City time) on the date of the proposed Swing
Line Borrowing, by the Borrower to the Swing Line Bank and the Paying Agent.
Each such notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing")
shall be by telephone, telex or telecopier, confirmed immediately in writing,
specifying therein the requested (A) date of such Borrowing and (B) amount of
such Borrowing and shall constitute a representation and warranty by the
Borrower (upon which the Swing Line Bank may conclusively rely, in the absence
of prior receipt by the Swing Line Bank of written notice to the contrary from a
Facility Agent or Lenders holding at least 51% of the Revolving Credit
Commitments) that the conditions precedent to the making of Swing Line Advances
have been satisfied or duly waived. Upon fulfillment of the applicable
conditions set forth in Article III and to the extent the Swing Line Bank has
not received written notice from a Facility Agent or the Required Lenders that
the conditions to making such Swing Line Advances have not been satisfied or
duly waived, the Swing Line Bank will make the amount thereof available to the
Borrower by crediting the Borrower's Account.
(ii) (A)(1) Subject to clause (ii)(B) below, in the event that on
any Business Day the Swing Line Bank desires that all or any portion of one or
more Swing Line Advances be paid, the Swing Line Bank shall promptly notify the
Paying Agent to that effect and indicate the portion of the Swing Line Advances
to be paid.
(2) The Paying Agent agrees to promptly transmit to the
Lenders the information contained in each notice received by the
34
Paying Agent under clause (ii)(A)(1) above, and shall concurrently notify the
other Facility Agents and the Lenders of each Lender's Pro Rata Share of the
Swing Line Advances (or portion thereof) to be paid.
(3) Each Revolving Lender hereby unconditionally and irrevocably
agrees to fund to the Paying Agent for the benefit of the Swing Line Bank, in
lawful money of the United States and in same day funds, not later than 12:00
Noon (New York City time) on the Business Day immediately following the Business
Day of such Lender's receipt of such notice from the Paying Agent (provided that
if any Lender shall receive such notice at or prior to 1:00 P.M. (New York City
time) on a Business Day, such funding shall be made by such Lender on such
Business Day), a Revolving Credit Advance in the amount of such Lender's Pro
Rata Share of the payment of the Swing Line Advances to be made on such date,
regardless, however, of whether (x) the conditions precedent thereto set forth
in Article III are then satisfied, (y) the Borrower has provided a notice of
borrowing under Section 2.02(a) hereof and (z) the Revolving Credit Facility has
been terminated or all or any of the Notes have been accelerated, but subject to
clause (B) below and subject to the requirements contained in Section 2.01(a)
(except that such Lender shall be required to make such Advance notwithstanding
the fact that such Lender may not otherwise have an obligation to make Advances
hereunder). The proceeds of each such Revolving Credit Advance shall be
immediately paid over to the Paying Agent for the benefit of the Swing Line Bank
for application to the Swing Line Facility. Each such Revolving Credit Advance
shall initially be a Base Rate Advance and shall be deemed to have been timely
requested by the Borrower pursuant to Section 2.02(a).
(B) In the event that Commitments of the Lenders shall have
terminated pursuant to Section 6.01 following an Event of Default, no further
Revolving Credit Advances of the type described in clause (ii)(A) above shall be
made, and each of the Revolving Lenders (other than the Swing Line Bank) shall
be deemed to have irrevocably, unconditionally and immediately purchased from
the Swing Line Bank such Lender's Pro Rata Share of the principal amount of the
Swing Line Advances outstanding as of the date of the occurrence of such Event
of Default. Each such Lender shall effect such purchase by making available an
amount equal to its participation on the date of such purchase in U.S. dollars
in immediately available funds at the office of the Swing Line Bank located at
Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Swing
Line Bank may from time to time direct for the account of such office of the
Swing Line Bank.
(C) Each purchase made pursuant to clause (ii)(B) above by a
Lender shall be made without recourse to the Swing Line Bank, and, except as to
the absence of liens created by the Swing Line Bank on the Swing Line Advance
and the Swing Line Bank's
35
right to effect such sale, without representation or warranty of any kind, and
shall be effected and evidenced pursuant to documents reasonably acceptable to
the Swing Line Bank.
(D) The obligations of the Lenders under this Section 2.02(b)(ii)
shall be absolute, irrevocable and unconditional, shall be made under all
circumstances and shall not be affected, reduced or impaired for any reason
whatsoever, including (without limitation): (1) any Default, misrepresentation,
negligence, misconduct or other action or inaction of any kind by any of the
Loan Parties or any other Person, whether in, under or in connection with this
Agreement, the Guaranties or any of the other Loan Documents; (2) any extension,
renewal, release or waiver of the time of performance of or compliance with any
of the obligations or other provisions hereof or of any other Loan Document; (3)
any settlement, compromise or subordination of any or all of the obligations to
the claims of others, or any failure by any Facility Agent, the Swing Line Bank
or any other Lender to mitigate damages; (4) any amendment, modification or
other waiver of any one or more of the Loan Documents; (5) the insolvency,
bankruptcy, reorganization or cessation of existence of any of the Loan Parties;
(6) any impossibility or illegality of performance or the lack of genuineness,
validity, legality or enforceability of any of this Agreement or the other Loan
Documents, or any term thereof or any other agreement or instrument relating
thereto for any reason, or the lack of power or authority of any party to enter
into any of the Loan Documents; (7) any defect in the title to or lien on the
Collateral in favor of the Collateral Agent; (8) any dispute, setoff,
recoupment, counterclaim or other defense or right any Lender may have at any
time, whether against any Facility Agent, the Swing Line Bank, any other Lender
or any of the Loan Parties; (9) any merger or consolidation of any of the Loan
Parties or any Lender, or any sale, lease or transfer of any or all of the
assets of any such Person; or (10) any other circumstances whether similar or
dissimilar to any of the foregoing.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder or for any Borrowing if the aggregate amount of
such Borrowing is less than $5,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 and (ii) the Revolving Credit Advances made on any date plus the
number of Borrowings constituting part of the Term Loan may not be outstanding
as part of more than 10 separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing
shall be irrevocable and binding on the Borrower. In the case of any Borrowing
that the related Notice of Borrowing specifies is to comprise Eurodollar Rate
Advances, the Borrower shall indemnify each Appropriate Lender against any loss,
cost or
36
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date.
(e) Unless the Paying Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Paying Agent such Lender's ratable portion of such Borrowing, the Paying
Agent may assume that such Lender has made such portion available to the Paying
Agent on the date of such Borrowing in accordance with subsection (a) or (b) of
this Section 2.02 and the Paying Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Paying Agent, such Lender and the Borrower severally agree to
repay or pay to the Paying Agent forthwith on demand such corresponding amount
and to pay interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid or paid to the
Paying Agent, at (i) in the case of the Borrower, the interest rate applicable
at such time under Section 2.06 to Advances comprising such Borrowing and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to
the Paying Agent such corresponding amount, such amount so paid shall constitute
such Lender's Advance as part of such Borrowing for purposes of this Agreement.
(f) The failure of any Lender to make the Advance to be made by
it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Repayment. (a) Revolving Credit Advances. The
Borrower shall repay to the Paying Agent for the ratable account of the Lenders
on the Termination Date the aggregate outstanding principal amount of the
Revolving Credit Advances.
(b) Swing Line Advances. The Borrower shall repay to the Paying
Agent for the account of the Swing Line Bank and each other Lender which has
purchased a Swing Line Advance or portion thereof pursuant to Section 2.02(b)
the outstanding principal amount of each Swing Line Advance at the times and in
the manner
37
and amounts specified in Section 2.02(b) and on the Termination Date.
(c) Letter of Credit Advances. The Borrower shall, on demand,
repay to the Paying Agent for the account of the Fronting Bank and each Lender
that has purchased a Letter of Credit Advance or portion thereof in accordance
with Section 2.13(c) the outstanding principal amount of each Letter of Credit
Advance.
SECTION 2.04. Reduction of the Commitments. (a) Optional. The
Borrower may, upon at least three Business Days' notice to the Paying Agent,
terminate in whole or reduce in part the Unused Revolving Credit Commitments,
the unused portion of the Letter of Credit Commitments or the unused portion of
the Swing Line Facility; provided, however, that, except in the case of the
termination of a Facility, each partial reduction of a Facility (i) shall be in
an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, and (ii) with respect to the Revolving Credit Facility, shall be
made ratably among the Lenders in accordance with their Revolving Credit
Commitments; provided further that after giving effect to any such reduction,
each of the commitment of the Swing Line Bank pursuant to Section 2.01(c) and
the Letter of Credit Commitments shall be less than or equal to the Revolving
Credit Commitments.
(b) Mandatory. The Revolving Credit Commitments shall be
permanently reduced on the date of each prepayment required to be made in
accordance with Section 2.05(b)(i) and (iv) (other than amounts allocable to the
Term Loan) in an amount equal to the Required Amount of such prepayment and the
Letter of Credit Facility and the Swing Line Facility shall be permanently
reduced on such date in an amount, if any, such that after giving effect to such
reduction, the Letter of Credit Commitments and the Swing Line Facility,
respectively, shall not exceed the Revolving Credit Commitments.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may, upon
at least three Business Days' notice to the Paying Agent in the case of the
Eurodollar Rate Advances under the Revolving Credit Facility, and upon at least
one Business Day's notice to the Paying Agent in the case of Base Rate Advances
under the Revolving Credit Facility, upon ten Business Day's notice to the
Paying Agent in the case of the Term Loan Facility, and upon notice prior to
1:00 p.m. on the date of any prepayment in the case of the Swing Line Facility,
in each case such notice to state the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall prepay
the outstanding aggregate principal amount of the Advances comprising part of
the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the aggregate principal amount prepaid;
provided, however, that (x) each partial prepayment under the Revolving Credit
Facility or Term Loan Facility shall be in an
38
aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof, (y) each partial prepayment of the Term Loan Facility shall
be applied to prepay the scheduled installments of the Term Loan in inverse
order of maturity and (z) if any prepayment of a Eurodollar Rate Advance is made
other than on the last day of an Interest Period therefor, the Borrower shall
also pay any amounts owing pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, by 11:00 A.M. (New York
City time) on the Business Day immediately following the date of receipt of Net
Cash Proceeds (the "Required Prepayment Date") by Parent, the Borrower or any of
the Borrower's Subsidiaries from any Asset Sale or from the Capital Issuance of
any Debt by Parent, the Borrower or any of the Borrower's Subsidiaries (other
than Debt incurred or issued pursuant to Section 5.02(b)(i) through (xii) or
5.02(b)(xiv)), prepay an aggregate principal amount of the Advances comprising
part of the same Borrowings equal to 100% of such Net Cash Proceeds (such amount
of Net Cash Proceeds being the "Required Amount"). Each such prepayment shall be
applied first to the prepayment of the Term Loan and then to the permanent
reduction of the Revolving Credit Commitments and each such prepayment shall be
applied to prepay first, the scheduled installments of the Term Loan in inverse
order of maturity, until the Term Loan shall have been repaid in full; second,
the aggregate principal amount of outstanding Swing Line Advances; third, the
aggregate principal amount of outstanding Letter of Credit Advances; and fourth,
the aggregate principal amount of outstanding Revolving Credit Advances.
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Revolving Credit Advances comprising part of
the same Borrowings, the Letter of Credit Advances and the Swing Line Advances
equal to the amount by which (A) the aggregate principal amount of the Revolving
Credit Advances, Letter of Credit Advances and Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of Credit then
outstanding exceeds (B) the lesser of the Revolving Credit Commitments and the
Borrowing Base on such Business Day.
(iii) The Borrower shall, on each Business Day, pay to the
Collateral Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(iv) On the date of receipt by Parent, the Borrower or the
Collateral Agent of proceeds from the key person life insurance policy on Xxxxx
X. Xxxxxxx required pursuant to Section 5.01(d), such proceeds shall be applied
to prepay an aggregate principal amount of the Advances comprising part of the
same
39
Borrowings equal to the amount of such proceeds. Each such prepayment shall be
applied to the prepayment of the Term Loan and the permanent reduction of the
Revolving Credit Commitments in the same priority as set forth in Section
2.05(b)(i).
(v) The Borrower hereby irrevocably authorizes the Paying
Agent to apply on a daily basis all funds on deposit in the Cash Collateral
Account to the prepayment of Advances then outstanding in accordance with
Section 8 of the Security Agreement.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.06. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the sum
of (x) the Base Rate in effect from time to time plus (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
first day of each January, April, July and October during such periods
and on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x) the
Eurodollar Rate for such Interest Period for such Advance plus (y) the
Applicable Margin in effect from time to time, payable in arrears on the
last day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest
Period.
(b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder which is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum
40
equal at all times to 2% per annum above the rate per annum required to be paid
on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrower shall pay to
the Paying Agent for the account of the Revolving Lenders a commitment fee on
the average daily Unused Revolving Credit Commitment (determined without regard
to the Borrowing Base) of such Lender from the Effective Date in the case of
each Lender on the date hereof and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Revolving Lender in the
case of each other Revolving Lender until the Termination Date at a rate per
annum equal, as of any date, to a percentage determined by reference to the
ratio of (i) Average Debt as of such date to (ii) Consolidated EBITDA of Parent
and its Subsidiaries for the four Fiscal Quarters ended on or most recently
prior to such date as set forth below:
=========================================================================================
Average Debt to EBITDA
Ratio Commitment Fee
-----------------------------------------------------------------------------------------
Level I
less than or equal to
2.50 to 1.00 0.250%
-----------------------------------------------------------------------------------------
Level II
less than or equal to
3.50 to 1.00 but greater
than 2.50 to 1.00 0.375%
-----------------------------------------------------------------------------------------
Level III
greater than 3.50 to 1.00 0.500%
======
=========================================================================================
The commitment fee shall be determined by reference to such ratio in effect from
time to time; provided, however, that (A) such commitment fee shall be at Level
III during the Initial Applicable Margin Period, (B) no change in such fee shall
be effective until three Business Days after the date on which the Agents
receive financial statements pursuant to Section 5.03(b) or (c) and a
certificate of the chief financial officer of the Borrower demonstrating such
ratio and (C) if the Borrower has not submitted to the Agents the information
described in clause (B) of this proviso as and when required under Section
5.03(b) or (c), as the case may be, or if there is an Event of Default, the
commitment fee shall be at Level III for so long as such information has not
been received by the Agents or such Event of Default continues. Such commitment
fee shall in all cases be
41
payable in arrears quarterly on the first day of each January, April, July and
October, commencing October 1, 1996 and on the Termination Date; provided,
however, that any commitment fee accrued with respect to any of the Commitments
of a Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided further that no commitment fee shall accrue on
any of the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Facility Agents' Fees. The Borrower shall pay to the Facility
Agents for their respective accounts such fees as may from time to time be
agreed between the Borrower and the Facility Agents.
SECTION 2.08. Conversion of Advances. (a) Optional. The Borrower
may on any Business Day, upon notice given to the Paying Agent not later than
1:00 P.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Section 2.09, Convert
all or any portion of the Advances of one Type comprising the same Borrowing
into Advances of the other Type; provided, however, that (x) if any Conversion
of Eurodollar Rate Advances into Base Rate Advances is made other than on the
last day of an Interest Period for such Eurodollar Rate Advances, the Borrower
shall also pay any amounts owing pursuant to Section 8.04(c) and (y) any
Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an
amount not less than the minimum amount specified in Section 2.02(c) and (z) no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c). Each such notice of Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the Advances to be Converted and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Paying Agent will forthwith so notify the Borrower and the Appropriate Lenders,
whereupon each such Eurodollar Rate Advance will automatically,
42
on the last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost (other than in taxes, including
interest, additions to tax and penalties relating thereto, which shall be
governed by Section 2.11) to any Lender of agreeing to make or of making,
funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Paying
Agent), pay to the Paying Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided,
however, that, before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend or to issue Letters of Credit hereunder and other commitments of such
type or the issuance or maintenance of the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender (with a copy of such
demand to the Paying Agent), the Borrower shall pay to the Paying Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit; provided, however, that, before making any
such demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation
43
would avoid the need for, or reduce the amount of, the payment by the Borrower
of such amounts and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to such amounts submitted to
the Borrower by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, Lenders
owed at least a majority of the then aggregate unpaid principal amount thereof
notify the Paying Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost (other than in taxes,
including interest, additions to tax and penalties relating thereto, which shall
be governed by Section 2.11) to such Lenders of making, funding or maintaining
their Eurodollar Rate Advances for such Interest Period, the Paying Agent shall
forthwith so notify the Borrower and the Appropriate Lenders, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Paying Agent shall notify
the Borrower that such Lenders have determined that the circumstances causing
such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Paying Agent, (i) each Eurodollar Rate Advance will automatically,
upon such demand, Convert into a Base Rate Advance and (ii) the obligation of
such Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Paying Agent shall notify the Borrower that such Lender
has determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office if
the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
such Lender.
(e) Upon the occurrence and during the continuance of any Event
of Default, (i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest
44
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
SECTION 2.10. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes not later than 1:00 P.M. (New
York City time) on the day when due in U.S. dollars to the Paying Agent at the
Paying Agent's Account in same day funds. The Paying Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender,
to such Lenders for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lenders and (ii) if such payment by the Borrower is in respect
of any Obligation then payable hereunder to one Lender, to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date of
such Assignment and Acceptance, the Paying Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) If the Paying Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Paying Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
outstanding Advances and the Available Amount of all Letters of Credit then
outstanding, in repayment or prepayment of such of the outstanding Advances or
other Obligations owed to such Lender, and for application to such principal
installments, as the Paying Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time, to the extent permitted
under applicable law, against any or all of the Borrower's accounts with such
Lender any amount so due.
(d) All computations of interest, fees and Letter of Credit
commissions shall be made by the Paying Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in
45
the period for which such interest, fees or commissions are payable. Each
determination by the Paying Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees or
commissions hereunder, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(f) Unless the Paying Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that the Borrower will not make such payment in full, the Paying Agent may
assume that the Borrower has made such payment in full to the Paying Agent on
such date and the Paying Agent may, in reliance upon such assumption, cause to
be distributed to each such Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Paying Agent, each such Lender shall repay to
the Paying Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Paying Agent, at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and Facility Agent,
Excluded Taxes (all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities other than Excluded Taxes being hereinafter
referred to as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Lender or Facility Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.11) such Lender or
Facility Agent (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
46
(b) In addition, the Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and Facility Agent
for the full amount of Taxes and Other Taxes, and for the full amount of Taxes
imposed by any jurisdiction on amounts payable under this Section 2.11, paid by
such Lender or Facility Agent (as the case may be) and any liability (including
penalties, additions to Tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date
such Lender or Facility Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Paying Agent and the Documentation Agent, at their
respective addresses referred to in Section 8.02, the original receipt of
payment thereof or a certified copy of such receipt (to the extent that the
relevant governmental authority delivers such receipts). Within 30 days after
the written reasonable request of the Borrower, each Lender shall execute and
deliver to the Borrower such certificates, forms or other documents which can be
furnished consistent with the facts and which are reasonably necessary to assist
the Borrower in applying for refunds of Taxes paid by the Borrower hereunder or
making payment of Taxes hereunder; provided, however, that no Lender shall be
required to furnish to the Borrower any financial information with respect to
itself or other information which it considers confidential. In the case of any
payment hereunder or under the Notes by the Borrower through an account or
branch outside the United States or on behalf of the Borrower by a payor that is
not a United States person, if the Borrower determines that no Taxes are payable
in respect thereof, the Borrower shall furnish, or shall cause such payor to
furnish, to the Paying Agent and the Documentation Agent, at such address, an
opinion of counsel acceptable to such Agents stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender on the date hereof, and on
the date of the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender, and from time to time thereafter if requested
in writing by the Borrower or the Documentation Agent (but only so long
thereafter as such Lender remains lawfully able to do so), provide the
Documentation Agent and the
47
Borrower with two duly completed and signed copies of Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party that reduces
the rate of withholding tax on payments under this Agreement or the Notes or
certifying that the income receivable pursuant to this Agreement or the Notes is
effectively connected with the conduct of a trade or business in the United
States. Upon the reasonable request of the Borrower or the Documentation Agent,
each Lender that has not provided the forms or other documents, as provided
above, on the basis of being a United States person shall submit to the Borrower
and the Documentation Agent a certificate to the effect that it is such a
"United States person" (as defined in Section 7701(a)(30) of the Internal
Revenue Code). If any Lender which is not a "United States person" determines
that it is unable to submit to the Borrower or the Documentation Agent any form
or certificate that such Lender is requested to submit pursuant to this Section
2.11(e), or that it is required to withdraw or cancel any such form or
certificate, or that any such form or certificate previously submitted has
otherwise become ineffective or inaccurate, such Lender shall promptly notify
the Borrower and the Documentation Agent of such fact. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes for all purposes of this
Agreement unless and until such Lender subsequently provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for subsequent periods
governed by such subsequent form; provided, however, that, if at the date of the
Assignment and Acceptance pursuant to which a Lender assignee becomes a party to
this Agreement the Lender assignor was entitled to payments under subsection (a)
in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to and paid by or withheld with respect to the Lender assignee.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes that would not
have been imposed but for such failure; provided, however, that should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender
48
shall reasonably request to assist such Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant
to this Section 2.11 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(h) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.11 shall survive the payment in full of principal and interest
hereunder and under the Notes.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) (a) on account of Obligations due
and payable to such Lender hereunder and under the Notes at such time in excess
of its ratable share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii) the aggregate
amount of the Obligations due and payable to all Lenders hereunder and under the
Notes at such time) of payments on account of the Obligations due and payable to
all Lenders hereunder and under the Notes at such time obtained by all the
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender hereunder and under the Notes at such time in excess of
its ratable share (according to the proportion of (i) the amount of such
Obligations owing (but not due and payable) to such Lender at such time to (ii)
the aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time) of payments on account of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Notes at such time obtained by all the Lenders at such time, such
Lender shall forthwith purchase from the other Lenders such participations in
the Obligations due and payable or owing to them, as the case may be, as shall
be necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each other Lender shall be rescinded and such other Lender shall repay to the
purchasing Lender the purchase price to the extent of such other Lender's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender to (ii) the aggregate purchase price paid to all Lenders) of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the
49
amount of such other Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.12 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.13. Letters of Credit. (a) The Letter of Credit
Facility. Pursuant to the Existing Credit Agreement, the Fronting Bank has
issued Letters of Credit (such Letters of Credit as are outstanding on the date
hereof under the Existing Credit Agreement and set forth on Schedule II being
the "Existing Letters of Credit") for the account of the Borrower. Effective as
of the Effective Date, each Existing Letter of Credit shall be deemed to be a
Letter of Credit under this Agreement and each Lender on the date hereof will be
deemed to have purchased and received, without further action on the part of any
party, an undivided interest and participation in such existing Letters of
Credit, based upon such Lender's Pro Rata Share of its Revolving Credit
Commitment under this Agreement. Any such interest and participation so
purchased shall automatically become an undivided interest and participation in
such Letters of Credit. In addition, the Fronting Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (together with the
Existing Letters of Credit, the "Letters of Credit") for the account of the
Borrower or any of its Subsidiaries (it being understood that the Obligations
with respect to such Letters of Credit shall be Obligations of the Borrower
notwithstanding that such Letters of Credit shall be for the account of its
Subsidiaries) from time to time on any Business Day during the period from the
date of the initial Borrowing until 30 days before the Termination Date (i) in
an aggregate Available Amount for all Letters of Credit issued by the Fronting
Bank not to exceed at any time the Letter of Credit Facility and (ii) in an
Available Amount for each such Letter of Credit not to exceed the Unused
Revolving Credit Commitments of the Lenders on such Business Day. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or
the beneficiary to require renewal) later than the earlier of 30 days before the
Termination Date and, in the case of a Documentary Letter of Credit, 180 days
after the date of issuance thereof. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may request
the issuance of Letters of Credit under this Section 2.13(a), repay any Letter
of Credit Advances resulting from drawings thereunder pursuant to Section
2.13(c) and request the issuance of additional Letters of Credit under this
Section 2.13(a).
50
(b) Request for Issuance. (i) Each Letter of Credit shall be
issued upon notice, given not later than 1:00 P.M. (New York City time) on the
first Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Fronting Bank, which shall give to the Paying
Agent prompt notice thereof by telex, telecopier or cable. Each such notice of
issuance from the Borrower of a Letter of Credit (a "Notice of Issuance") shall
be by telex, telecopier or cable, confirmed immediately in writing, specifying
therein the requested (A) date of such issuance (which shall be a Business Day),
(B) Available Amount of such Letter of Credit, (C) expiration date of such
Letter of Credit, (D) name and address of the beneficiary of such Letter of
Credit and (E) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit (a "Letter of Credit Agreement")
as the Fronting Bank may specify to the Borrower for use in connection with such
requested Letter of Credit. If (x) the requested form of such Letter of Credit
is acceptable to the Fronting Bank in its sole discretion and (y) it has not
received written notice from a Facility Agent or the Required Lenders that the
conditions to issuing such Letter of Credit have not been satisfied or duly
waived, the Fronting Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 8.02 or as otherwise agreed with the
Borrower in connection with such issuance. In the event and to the extent that
the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern as among the parties to
the Loan Documents.
(ii) The Fronting Bank shall furnish (A) to the Paying Agent
and the Documentation Agent and each Lender on the first Business Day of each
month a written report summarizing issuance and expiration dates of Letters of
Credit issued during the preceding month and drawings during such month under
all Letters of Credit and (B) to the Paying Agent and the Documentation Agent
and each Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Fronting Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Fronting Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon written
demand by the Fronting Bank with an outstanding Letter of Credit Advance, with a
copy of such demand to the Paying Agent, each Revolving Lender shall purchase
from the Fronting Bank, and the Fronting Bank shall sell and assign to such
Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Paying Agent for the account
51
of the Fronting Bank, by deposit to the Paying Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. The Borrower
hereby agrees to each such sale and assignment. Each Revolving Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which demand therefor is made by the Fronting Bank, provided
notice of such demand is given not later than 1:00 P.M. (New York City time) on
such Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Fronting Bank to any Lender of a portion of a Letter of Credit Advance, the
Fronting Bank represents and warrants to such other Lender that the Fronting
Bank is the legal and beneficial owner of such interest being assigned by it,
free and clear of Liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Revolving Lender
shall not have so made the amount of such Letter of Credit Advance available to
the Paying Agent, such Lender agrees to pay to the Paying Agent forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Fronting Bank until the date such amount is paid to the Paying
Agent, at the Federal Funds Rate. If such Lender shall pay to the Paying Agent
such amount for the account of the Fronting Bank on any Business Day, such
amount so paid in respect of principal shall constitute a Letter of Credit
Advance made by such Lender on such Business Day, and the outstanding principal
amount of the Letter of Credit Advance made by the Fronting Bank shall be
reduced by such amount on such Business Day.
(d) Obligations Absolute. The Obligations of the Borrower under
this Agreement, any Letter of Credit Agreement and any other agreement or
instrument, in each case, relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
the Fronting Bank of any draft or the reimbursement by the Borrower thereof):
(i) any lack of validity or enforceability of this Agreement, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (this Agreement and all of the other foregoing
being, collectively, the "L/C Related Documents");
52
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, setoff, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Fronting Bank or any other Person, whether in
connection with the transactions contemplated by the L/C Related Documents or
any unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Fronting Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from the Guaranties or any other guaranty, for all or any of the
Obligations of the Borrower in respect of the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a Guarantor.
(e) Compensation. (i) The Borrower shall pay to the Paying Agent
for the account of each Revolving Lender a commission on such Lender's Pro Rata
Share of the average daily aggregate Available Amount of (A) all Documentary
Letters of Credit outstanding from time to time at a rate per annum as
determined, as of any date, by reference to the ratio of (i) Average Debt as of
such date to (ii) Consolidated EBITDA of Parent and its Subsidiaries for the
four Fiscal Quarters ended on or most recently prior to such date as set forth
below and (B) all Standby Letters of Credit outstanding from time to time at a
rate per annum as determined, as of any date, by reference to the ratio of (i)
Average Debt as of such date to (ii) Consolidated EBITDA of Parent and its
Subsidiaries for the four Fiscal Quarters ended on or most recently prior to
such date as set forth below:
53
==============================================================================================
Rate for Rate for Standby
Average Debt to EBITDA Documentary Letters of Credit
Ratio Letters of Credit
----------------------------------------------------------------------------------------------
Level I
less than or equal to
2.50 to 1.00 0.625% 0.750%
----------------------------------------------------------------------------------------------
54
Level II
less than or equal to
3.00 to 1.00 but greater than
2.50 to 1.00 0.750% 1.000%
----------------------------------------------------------------------------------------------
Level III
less than or equal to
3.50 to 1.00 but greater than
3.00 to 1.00 1.000% 1.250%
----------------------------------------------------------------------------------------------
Level IV
less than or equal to
4.00 to 1.00 but
greater than 3.50 to 1.00 1.250% 1.500%
----------------------------------------------------------------------------------------------
Level V
less than or equal to
4.50 to 1.00 but
greater than 4.00 to 1.00 1.500% 1.750%
----------------------------------------------------------------------------------------------
Level VI
greater than 4.50 to 1.00 1.750% 2.000%
==============================================================================================
The Letter of Credit rate shall be determined by reference to the ratio in
effect from time to time; provided, however, that (A) such Letter of Credit Rate
shall be at Level IV during the Initial Applicable Margin Period, (B) no change
in such rate shall be effective until three Business Days after the date on
which the Agents receive financial statements pursuant to Section 5.03(b) or (c)
and a certificate of the chief financial officer of the Borrower demonstrating
such ratio and (C) if the Borrower has not submitted to the Agents the
information described in clause (B) of this proviso as and when required under
Section 5.03(b) or (c), as the case may be, or if there is an Event of Default,
the Letter of Credit rate shall be at Level VI for so long as such information
has not been received by the Agents or such Event of Default continues. Such
letter of credit fees shall in all cases be payable in arrears quarterly on the
first day of each January, April, July and October, commencing October 1, 1996
and on the Termination Date.
(ii) The Borrower shall pay to the Fronting Bank, for its own
account, (A) for each Letter of Credit an amount equal to 0.250% per annum on
the Available Amount of each Letter of Credit, payable in arrears quarterly on
the first day of each January, April, July and October, commencing October 1,
1996 and on the Termination Date and (B) such standard commissions, issuance
fees, transfer fees and other fees, charges and expenses as the Fronting Bank
may impose, pay or incur in connection with the issuance, amendment,
administration, transfer or cancellation
55
of each Letter of Credit and in connection with any payment by the Fronting Bank
thereunder. Where such are determined on a per annum basis, the determination
thereof shall be made by the Fronting Bank on the basis of a year of 360 days
for the actual number of days elapsed.
(f) Any action taken or omitted to be taken by the Fronting Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not put the Fronting
Bank under any resulting liability to any Lender.
SECTION 2.14. Use of Proceeds. The proceeds of each of the Term
Loan, the Revolving Credit Advances, the Swing Line Advances and the Letter of
Credit Advances shall be available (and the Borrower agrees that it shall use
such proceeds) to (i) refinance the amounts outstanding under the Existing
Credit Agreement, (ii) pay transaction fees and expenses in connection with the
transactions contemplated hereunder, (iii) provide working capital for the
Borrower and its Subsidiaries and (iv) provide funds for other general corporate
purposes to the extent in the ordinary course of business, consistent with past
practices, and permitted by the Loan Documents, and including, without
limitation, permissible acquisitions and dividends or loans to Parent for the
repurchase of common stock of Parent subject to the terms and conditions of this
Agreement.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any
one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the Obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the Obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set off and otherwise apply the
Obligation of the Borrower to make any such payment against the Obligation of
such Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set off and otherwise applied by the Borrower shall constitute for all
purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01. Such Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01 and shall be
of the Type of Advance of such Borrowing and, if such Advance shall be a
Eurodollar Rate Advance, the Interest Period shall end on the date that the
56
Interest Period of such Borrowing shall end. The Borrower shall notify the
Paying Agent at any time the Borrower reduces the amount of the Obligation of
the Borrower to make any payment otherwise required to be made by it hereunder
or under any other Loan Document as a result of the exercise by the Borrower of
its right set forth in this subsection (a) and shall set forth in such notice
(A) the name of the Defaulting Lender and the Defaulted Advance required to be
made by such Defaulting Lender and (B) the amount set off and otherwise applied
in respect of such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by the Borrower to or for
the account of such Defaulting Lender which is paid by the Borrower, after
giving effect to the amount set off and otherwise applied by the Borrower
pursuant to this subsection (a), shall be applied by the Paying Agent as
specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Facility Agent or Lender and (iii) the Borrower shall make any payment
hereunder or under any other Loan Document to the Paying Agent for the account
of such Defaulting Lender, then the Paying Agent may, on its behalf or on behalf
of such other Facility Agents or Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by the Borrower to or for
the account of such Defaulting Lender to the payment of each such Defaulted
Amount to the extent required to pay such Defaulted Amount. In the event that
the Paying Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Paying Agent shall
constitute, as among the Lenders and the Paying Agent, for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Paying Agent
shall be retained by the Paying Agent or distributed by the Paying Agent to such
other Facility Agents or Lenders, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Paying Agent and
such other Facility Agents or Lenders and, if the amount of such payment made by
the Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Paying Agent and the other Lenders, in the following
order of priority:
(x) first, to the Facility Agents for any Defaulted Amount then
owing to the Facility Agents, ratably in accordance with such respective
Defaulted Amounts then owing to the Facility Agents; and
(y) second, to the Lenders for any Defaulted Amounts then owing
to the Lenders, ratably in accordance with such respective Defaulted
Amounts then owing to the Lenders.
57
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Paying Agent pursuant to this subsection (b), shall be applied by the Paying
Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance or
a Defaulted Amount and (iii) the Borrower, any Facility Agent or any Lender
shall be required to pay or distribute any amount hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the Borrower
or such other Lender shall pay such amount to the Paying Agent to be held by the
Paying Agent, to the fullest extent permitted by applicable law, in escrow or
the Paying Agent shall, to the fullest extent permitted by applicable law, hold
in escrow such amount otherwise held by it. Any funds held by the Paying Agent
in escrow under this subsection (c) shall be deposited by the Paying Agent in an
account with Scotiabank, in the name and under the control of the Paying Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Scotiabank's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Paying Agent in escrow under, and
applied by the Paying Agent from time to time in accordance with the provisions
of, this subsection (c). The Paying Agent shall, to the fullest extent permitted
by applicable law, apply all funds so held in escrow from time to time to the
extent necessary to make any Advances required to be made by such Defaulting
Lender and to pay any amount payable by such Defaulting Lender hereunder and
under the other Loan Documents to any Facility Agent or Lender, as and when such
Advances or amounts are required to be made or paid and, if the amount so held
in escrow shall at any time be insufficient to make and pay all such Advances
and amounts required to be made or paid at such time, in the following order of
priority:
(x) first, to the Facility Agents for any amount then due and
payable by such Defaulting Lender to the Facility Agents hereunder,
ratably in accordance with such respective amounts then due and payable
to the Facility Agents;
(y) second, to the Lenders for any amount then due and payable by
such Defaulting Lender to the Lenders hereunder, ratably in accordance
with such respective amounts then due and payable to the Lenders; and
(z) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
58
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Paying Agent in escrow at such time
with respect to such Defaulting Lender shall be distributed by the Paying Agent
to such Defaulting Lender and applied by such Defaulting Lender to the
Obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies which the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and which any Facility Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF EFFECTIVENESS
SECTION 3.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender to make an initial Advance (including the Term Loan)
is subject to the following conditions precedent having been satisfied or duly
waived:
(a) The Lenders shall be satisfied with the corporate and legal
structure, capitalization and Debt of each Loan Party, including,
without limitation, the terms and conditions of the charter, bylaws and
each class of capital stock of each Loan Party and each agreement or
instrument relating to such structure or capitalization.
(b) The Lenders shall be satisfied that all Obligations (other
than any Existing Letters of Credit which shall be treated as provided
in Section 2.13(a)) of the Borrower under the Existing Credit Agreement,
whether for principal, interest, fees, expenses or otherwise, have been
or, concurrently with the making of the initial Borrowing, will be paid
in full in cash and all Liens securing such Obligations released.
(c) The Borrower shall have paid all accrued fees and expenses of
the Facility Agents and the Lenders (including all invoiced fees and
expenses of counsel to the Facility Agents and of trademark counsel and
local counsel to the Lenders).
(d) There shall have occurred no Material Adverse Change since
March 31, 1996 except as described in the letter from the Borrower to
the Existing Lenders, dated August 23, 1996.
59
(e) There shall exist no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries
pending or threatened before any court, governmental agency or
arbitrator that would be reasonably likely to have a Material Adverse
Effect.
(f) The Documentation Agent shall have received on or before the
day of the initial Borrowing the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the
Documentation Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender:
(i) The Revolving Credit Notes to the order of
the Revolving Lenders and the Term Notes to the order of the
Term Lenders.
(ii) A parent guaranty in substantially the form
of Exhibit D-1 (as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Parent Guaranty"), duly executed by Parent.
(iii) A subsidiary guaranty in substantially the
form of Exhibit D-2 (together with each other guaranty
delivered pursuant to 5.01(o), in each case as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"), duly
executed by the Guarantors (other than Parent).
(iv) (A) A security agreement in substantially
the form of Exhibit E-1 (together with each other security
agreement delivered pursuant to 5.01(o), in each case as
amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Security Agreement"), duly
executed by each Loan Party, together with:
(1) certificates representing the Pledged Shares
referred to in the Security Agreement, accompanied by
undated stock powers executed in blank, and instruments
evidencing the Pledged Indebtedness referred to in the
Security Agreement, duly endorsed in blank,
(2) duly executed proper financing statements to be
filed under the Uniform Commercial Code of all
jurisdictions that the Collateral Agent may deem necessary
or desirable in order to maintain the perfection and
priority of the Liens existing under the Security
60
Agreement, covering the Collateral described in the
Security Agreement,
(3) evidence of the completion of all other
recordings and filings of or with respect to the Security
Agreement that the Collateral Agent may reasonably deem
necessary or desirable in order to perfect and protect the
Liens created thereby,
(4) evidence of the insurance required to be
maintained by the terms of the Security Agreement,
(5) evidence that the Lockbox Letters referred to
in the Security Agreement, have been duly executed by each
Lockbox Bank referred to in the Security Agreement,
(6) confirmation that such action that the
Collateral Agent may deem necessary or desirable in order
to maintain the perfection and priority of the Liens on
the capital stock held by any Loan Party in any of its
Foreign Subsidiaries has been taken, and
(7) evidence that all other action that the
Collateral Agent may reasonably deem necessary or
desirable in order to perfect and protect the Liens
created by the Security Agreement has been taken
(including, without limitation, receipt of duly executed
proper termination statements evidencing the release of
all Liens securing the Obligations under the Existing
Credit Agreement).
(B) A trademark, patent and copyright security agreement
in substantially the form of Exhibit E-2 (together with each
other trademark, patent and copyright security agreement
delivered pursuant to Section 5.01(o), in each case as amended,
supplemented or otherwise modified from time to time in
accordance with its terms, the "Trademark, Patent and Copyright
Security Agreement"), duly executed by each of the parties
indicated on the signature pages thereof, together with evidence
that all other action, if any, that the Collateral Agent may deem
necessary or desirable in order to perfect and protect the Liens
existing under the Trademark, Patent and Copyright Security
Agreement has been taken (including, without limitation, receipt
of duly executed proper releases evidencing the release of all
Liens securing the Obligations under the Existing Credit
Agreement).
(v) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan
61
Party approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, the Notes and
each other Loan Document.
(vi) A copy of a certificate of the Secretary of State
of the jurisdiction of incorporation of each Loan Party, dated
reasonably near the Effective Date listing the charter of such
Loan Party and each amendment thereto on file in his office and
certifying that (A) such amendments are the only amendments to
such Loan Party's charter on file in his office, (B) such Loan
Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated and in
good standing under the laws of such jurisdiction.
(vii) A certificate of the Borrower and each other Loan
Party, signed on behalf of the Borrower and such other Loan Party
by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the Effective Date (the statements
made in which certificate shall be true on and as of the
Effective Date), certifying as to (A) the absence of any
amendments to the charter of the Borrower or such other Loan
Party since the date of the Secretary of State's certificate
referred to in Section 3.01(f)(vi), (B) a true and correct copy
of the by-laws of the Borrower and such other Loan Party as in
effect on the date of the initial Borrowing, (C) the due
incorporation and good standing of the Borrower and such other
Loan Party as a corporation organized under the laws of the
applicable jurisdiction, and the absence of any proceeding for
the dissolution or liquidation of the Borrower or such other Loan
Party, (D) the truth of the representations and warranties
contained in the Loan Documents as though made on and as of the
Effective Date and (E) the absence of any event occurring and
continuing, or resulting from the initial Borrowing, that
constitutes a Default.
(viii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying
the names and true signatures of the officers of the Borrower and
such other Loan Party authorized to sign this Agreement and each
other Loan Document to which they are or are to be parties and
the other documents to be delivered hereunder and thereunder.
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(ix) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lenders
shall have requested, including, without limitation, a
calculation of the Borrowing Base as of the fiscal month ended on
or about July 31, 1996, a field examination report, information
as to possible contingent liabilities, tax matters, environmental
matters, obligations under ERISA and Welfare Plans, collective
bargaining agreements and other arrangements with employees, pro
forma financial statements and forecasts prepared by management
of the Borrower, in form and substance satisfactory to the
Lenders, of balance sheets, of operations and stockholders'
equity (deficit) and statements of cash flow on a monthly basis
for the first year following the day of the initial Borrowing and
on an annual basis for each year thereafter until the Termination
Date.
(x) Certificates, in substantially the form of
Exhibit G, attesting to the Solvency, after giving effect to the
transactions contemplated hereby, of each Loan Party, from the
chief financial officer or treasurer of such Loan Party.
(xi) Certified copies of all Material Contracts.
(xii) A favorable opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx, counsel for the Loan Parties, in substantially
the form of Exhibit H-1 hereto and as to such other matters as
any Lender through the Agents may reasonably request.
(xiii) A favorable opinion of Xxxxxxx Xxxxxxxxxxx, Esq.,
general counsel of each of the Loan Parties, in substantially the
form of Exhibit H-2 hereto and as to such other matters as any
Lender through the Agents may reasonably request.
(xiv) A favorable opinion of Xxxxxx, Xxxxxxxxx &
Xxxxxxxxx, intellectual property counsel to the Loan Parties, in
substantially the form of Exhibit H-3 hereto and as to such other
matters as any Lender through the Agents may reasonably request.
(xv) A favorable opinion of Weil, Gotshal & Xxxxxx
LLP, counsel for the Agents, in form and substance satisfactory
to the Agents.
(xvi) An Assignment of Life Insurance Policy, assigned
by the Borrower to the Collateral Agent for the benefit of the
Secured Parties.
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(g) The Lenders shall be satisfied with respect to the nature and
amount of all hazards, costs or liabilities under Environmental Laws to
which the Borrower or any of its Subsidiaries may be subject, and the
plans of the Borrower and its Subsidiaries with respect thereto.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance and other than a Revolving Credit Advance made by a Lender
pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
initial Borrowing), and the right of the Borrower to request a Swing Line
Borrowing or the issuance of Letters of Credit, shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, Notice of Swing Line Borrowing or Notice of Issuance and
the acceptance by the Borrower of the proceeds of such Borrowing or of such
Letter of Credit shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or
issuance, before and after giving effect to such Borrowing or issuance
and to the application of the proceeds therefrom, as though made on and
as of such date other than any such representations or warranties that,
by their terms, refer to a date other than the date of such Borrowing or
issuance;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
(iii) if the proceeds of such Advances are to be used to pay
dividends or make loans to Parent for purposes of repurchasing common
stock of Parent permitted hereunder, certificates in substantially the
form of Exhibit G, attesting to the Solvency of Parent, the Borrower and
each other Loan Party of the Borrower, from the chief financial officer
or treasurer of the Borrower or such subsidiary, as applicable, have
been delivered;
and (b) the Documentation Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender or the Fronting Bank through the
Documentation Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified
in Section 3.01, each Lender shall be deemed to have consented
64
to, approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Administrative Agent or the
Documentation Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender prior to the Effective
Date specifying its objection thereto and such Lender shall not have made
available to the Paying Agent such Lender's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Parent and the
Borrower. Each of Parent and the Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed
to be conducted. All of the outstanding capital stock of the Borrower
has been validly issued, is fully paid and non-assessable and is owned
by Parent free and clear of all Liens, except those created by the
Collateral Documents and, prior to the Effective Date, those securing
Obligations in respect of the Existing Credit Agreement.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
Effective Date (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the Effective Date and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the Effective Date. All of the outstanding capital
stock of all of such Subsidiaries has been validly issued, is fully paid
and non-assessable and is owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens, except those created by the
Collateral Documents and, prior to the Effective Date, those securing
65
Obligations in respect of the Existing Credit Agreement. Each such
Subsidiary (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
(ii) is duly qualified and in good standing as a foreign corporation in
each other jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Loan Party of
this Agreement, the Notes and each other Loan Document to which it is or
is to be a party, and the consummation of the transactions contemplated
hereby and thereby, are within such Loan Party's corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Loan Party's charter or by-laws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and
the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) so long as the conditions set forth in
Section 3.01(b) shall be satisfied prior to or simultaneously with the
making of the initial Advances hereunder, conflict with or result in the
breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on
or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created by the Collateral
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is or would be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes or any other Loan Document to which it is or is to
be a party, or for the consummation of the transactions
66
contemplated hereby and thereby, (ii) the grant by any Loan Party of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by any Facility Agent or Lender of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents.
(e) This Agreement has been, and each of the Notes and each other
Loan Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party which is a party thereto. This Agreement
is, and each of the Notes and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan
Party which is a party thereto, enforceable against such Loan Party in
accordance with its terms except to the extent that enforceability
thereof may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights generally.
(f) The Consolidated balance sheets of Parent and its
Subsidiaries as at July 1, 1995, and the related Consolidated statements
of operations, stockholders' equity (deficit) and cash flows of Parent
and its Subsidiaries for the fiscal year then ended, accompanied by an
opinion of Ernst & Young, independent public accountants, and the
Consolidated balance sheet of Parent and its Subsidiaries as at March
31, 1996, and the related Consolidated statements of operations,
stockholders' equity (deficit) and cash flows of Parent and its
Subsidiaries for the nine months then ended, duly certified by the chief
financial officer of Parent, copies of which have been furnished to each
Lender, present fairly, subject, in the case of said balance sheet as at
March 31, 1996, and said statements of operations, stockholders' equity
(deficit) and cash flows for the nine months then ended, to year-end
audit adjustments and any adjustments reflecting the matters reflected
in the letter from the Borrower to the Existing Lenders, dated August
23, 1996, the Consolidated financial position of Parent and its
Subsidiaries as at such dates and the Consolidated results of the
operations of Parent and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting principles
applied on a consistent basis, and since March 31, 1996, there has been
no Material Adverse Change except as described in the letter from the
Borrower to the Existing Lenders, dated August 23, 1996.
(g) The Consolidated forecasted balance sheets and
statements of operations, stockholders' equity (deficit) and
67
cash flows of Parent and its Subsidiaries delivered to the Lenders
pursuant to Section 5.03(e) were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were fair in the light
of conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower's best estimate of
its future financial performance, provided, however, that such forecasts
do not constitute a guaranty of future financial performance.
(h) No written information, exhibit or report furnished by any
Loan Party to any Facility Agent or Lender in connection with the
negotiation of the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or, when
taken together with all other such information, exhibits and reports so
furnished, omitted to state a material fact necessary to make the
statements made therein not misleading (after giving effect to any
supplemental information that is furnished to such Facility Agent or
Lender which updates, amends or modifies the information set forth
therein).
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) purports to affect the
legality, validity or enforceability of this Agreement, any Note or any
other Loan Document or the consummation of the transactions contemplated
hereby or (ii) except as set forth on Schedule 4.01(i) (the "Disclosed
Litigation"), is or would be reasonably likely to have a Material
Adverse Effect. There has been no adverse change in the status, or
financial effect on any Loan Party or any of their Subsidiaries, of the
Disclosed Litigation from that described on Schedule 4.01(i) on the
Effective Date or except as has been disclosed to the Facility Agents
and the Lenders.
(j) No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (other than (i) as permitted
in Section 5.02(g) and (ii) to the extent applicable, in connection with
an acquisition of a company, so long as (x) the board of directors of
such company shall have approved such acquisition at the time such
acquisition is first publicly announced, (y) if such company shall have
been soliciting bids for its acquisition, the board of directors of such
company shall not have determined either to accept no offer or to accept
an offer other than the Borrower's offer or (z) if such company shall
not have been soliciting bids for its acquisition or if the board of
directors of such company
68
shall have solicited bids for its acquisition but shall have initially
determined either to accept no offer or to accept an offer other than a
Borrower's offer, the existence, amount and availability for the
acquisition of such company of the Commitments hereunder shall not have
been disclosed, orally or in writing, to such company or its advisors,
provided, that the public filing of this Agreement shall not be deemed
to be disclosure of the Commitments hereunder to such company or its
advisors, until after such time as the board of directors of such
company shall have approved such acquisition by the Borrower and so long
as, in any case, such acquisition is otherwise permitted hereunder).
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock except as otherwise permitted in Section
4.01(j) and other than to pay dividends or make a loan by or from the
Borrower to Parent for the repurchase by Parent of common stock of
Parent as permitted hereunder.
(l) Following application of the proceeds of each Advance, not
more than 25% of the value of the assets (either of the Borrower only or
of the Borrower and its Subsidiaries on a Consolidated basis) subject to
the provisions of Section 5.02(a) or 5.02(e) will be Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans with
respect to any employees of any Loan Party or any of its Subsidiaries.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates.
(o) Schedule B (Actuarial Information) to the 1995 annual report
(Form 5500 Series) for each Plan of any Loan Party or any of its ERISA
Affiliates, copies of which have been filed with the Internal Revenue
Service and furnished to the Lenders, is complete and accurate and
fairly presents the funding status of such Plan as of the date of such
report, and since the date of such Schedule B there has been no material
adverse change in such funding status.
(p) Neither any Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
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(q) Neither any Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of any Loan Party
or any of its ERISA Affiliates that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(r) As of the Effective Date, the aggregate annualized cost
(including, without limitation, the cost of insurance premiums) with
respect to post-retirement benefits under Welfare Plans for which the
Loan Parties and their Subsidiaries are liable does not exceed
$1,000,000.
(s) Neither the business nor the properties of any Loan Party or
any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that is or would be reasonably
likely to have a Material Adverse Effect.
(t) Except as described on Schedule 4.01(t), the operations and
properties of each Loan Party and each of its Subsidiaries comply with
all applicable Environmental Laws and all Environmental Permits have
been obtained and are in effect for the operations and properties of
each Loan Party and its Subsidiaries and each Loan Party and its
Subsidiaries are in compliance with all such Environmental Permits,
except for such noncompliance or failure to have obtained Environmental
Permits as would not be reasonably likely to have a Material Adverse
Effect individually or in the aggregate. No circumstances exist that are
or would be reasonably likely to (i) form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law, that, in each case, could individually or in the
aggregate have a Material Adverse Effect.
(u) Except as described on Schedule 4.01(t), none of the
properties of any Loan Party or any of its Subsidiaries is listed or, to
the Borrower's knowledge, proposed for listing on the National
Priorities List under CERCLA or any analogous state list of sites
requiring investigation or cleanup or is adjacent to any such property,
and no underground storage tanks, as such term is defined in 42 U.S.C.
ss. 6991, are located on any property of any Loan Party or any of its
Subsidiaries.
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(v) Except as described on Schedule 4.01(t), neither any Loan
Party nor any of its Subsidiaries has transported or arranged for the
transportation of any Hazardous Materials to any location that is listed
or proposed for listing on the National Priorities List under CERCLA or
any analogous state list, Hazardous Materials have not been generated,
used, treated, handled, stored or disposed of on, or released or
transported to or from, any property of any Loan Party or any of its
Subsidiaries, except in material compliance with all applicable
Environmental Laws and Environmental Permits, and all other wastes
generated at any such properties have been disposed of in compliance
with all Environmental Laws and Environmental Permits.
(w) Neither any Loan Party nor any of its Subsidiaries is a party
to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that is or would be reasonably likely to have a Material
Adverse Effect.
(x) The Loan Parties are the legal and beneficial owners of the
Collateral free and clear of any Lien, except for the security interest
created by the Collateral Documents, Permitted Liens, such other Liens
as are described on Schedule 4.01(x) and, prior to the Effective Date,
Liens securing Obligations in respect of the Existing Credit Agreement.
The Collateral Documents and the pledge and assignment of the Collateral
pursuant thereto create a valid and perfected first priority security
interest in the Collateral, securing the payment of the Obligations of
the Loan Parties under the Loan Documents, and all filings and other
actions necessary or desirable to maintain the perfection and priority
of such security interest have been duly taken.
(y) Each of Parent and each of its Subsidiaries has filed all
income tax returns (federal, state, local and foreign) required to be
filed by it, and all other material tax returns (federal, state, local
and foreign), and has paid or caused to be paid all taxes shown thereon
to be due for the periods covered thereby, including interest and
penalties, or provided reserves for payment thereof to the extent
required under GAAP, other than taxes being contested in good faith and
by appropriate proceedings with respect to which adequate reserves in
accordance with GAAP have been established and except where failure to
so file or pay would not have a Material Adverse Effect.
(z) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any
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Advances, nor the issuance of any Letters of Credit, nor the application
of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate
any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(aa) Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
(bb) Set forth on Schedule 4.01(bb) hereto is a complete and
accurate list, as of the Effective Date, of all real property owned by
any Loan Party or any of its Subsidiaries, showing as of the Effective
Date the street address, county or other relevant jurisdiction, state,
record owner and book and estimated fair value thereof. Each such Loan
Party or Subsidiary has good, marketable and insurable fee simple title
to such real property, free and clear of all Liens, other than Liens
created or permitted by the Loan Documents and, prior to the Effective
Date, those securing Obligations in respect of the Existing Credit
Agreement.
(cc) Set forth on Schedule 4.01(cc) hereto is a complete and
accurate list, as of the Effective Date, of all leases of real property
under which any Loan Party or any of its Subsidiaries is the lessee and,
showing as of the Effective Date the street address, county or other
relevant jurisdiction, state, lessor, lessee and expiration date
thereof. Each such lease is the legal, valid and binding obligation of
the lessor thereof, enforceable in accordance with its terms.
(dd) Set forth on Schedule 4.01(dd) hereto is a complete and
accurate list, as of the Effective Date, of all United States patents,
trademarks, trade names, service marks and registered copyrights, and
all applications therefor and licenses thereof, of each Loan Party or
any of its Subsidiaries, showing as of the Effective Date the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
ARTICLE V
COVENANTS OF PARENT AND THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, Parent and the Borrower will, unless the Required
Lenders shall otherwise consent in writing:
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(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with
ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of
the Organized Crime Control Act of 1970, except where the failure so to
comply would not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained in accordance with
generally accepted accounting principles from time to time in effect,
unless and until any Lien resulting therefrom attaches to its property
and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons occupying its
properties to comply, in all material respects, with all Environmental
Laws and Environmental Permits applicable to its operations and
properties; obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing,
and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up all Hazardous Materials from any of its
properties, to the extent required by applicable Environmental Laws;
provided, however, that neither the Borrower nor any of its Subsidiaries
shall be required to undertake any action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates, and naming the Collateral Agent as
loss payee or additional insured, as appropriate; and maintain key
person life insurance on Xxxxx
73
X. Xxxxxxx in an amount not less than $10,000,000, for the period from
the Effective Date until the Termination Date, with insurance carriers
and pursuant to insurance policies reasonably satisfactory to the
Collateral Agent, which policies shall at all times be subject to an
Assignment of Life Insurance Policy to the Collateral Agent for the
benefit of the Secured Parties.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises,
provided, however, that the Borrower and its Subsidiaries may consummate
any merger, liquidation or consolidation permitted under Section 5.02(d)
or 8.13.
(f) Visitation Rights. At any reasonable time and from time to
time, permit the Facility Agents or any of the Lenders or any agents or
representatives thereof, upon reasonable notice to the Borrower, to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants; and
at least once during each Fiscal Year, permit the Collateral Agent, at
the Borrower's expense, to conduct a field examination of all Inventory
and Accounts, and of the Borrower's books and records, accounting and
inventory systems and related matters. Upon the occurrence and during
the continuance of a Default, the Facility Agents shall have such rights
at any time and without any requirement of prior notice.
(g) Preparation of Environmental Reports. During the continuance
of a Default or upon the reasonable belief of the Collateral Agent that
a potential material environmental risk may exist with respect to any
properties of the Borrower or any of its Subsidiaries, at the request of
the Collateral Agent from time to time, provide to the Lenders within 60
days after such request, at the expense of the Borrower, (i) in the
event of a Default, an environmental site assessment report for all of
its and its Subsidiaries' properties or (ii) in the event of a potential
material environmental risk, a report on the risk described in such
request, prepared by an environmental consulting firm acceptable to the
Agents, indicating the presence or absence of Hazardous Materials and
the estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; provided
that if such report is not provided within the time referred to above,
the Collateral Agent may retain an environmental
74
consulting firm to prepare such report at the expense of the Borrower,
and the Borrower hereby grants and agrees to cause any Subsidiary which
owns any property described in such request to grant at the time of such
request, to the Agents, the Lenders, such firm and any agents or
representatives thereof an irrevocable non-exclusive license, subject to
the rights of tenants, to enter onto their respective properties to
undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or cancelled, notify the Agents of any default by any party
with respect to such leases and cooperate with the Agents in all
respects to cure any such default, and cause each of its Subsidiaries to
do so, in each case except where failure to do so would not be
reasonably likely to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, (i) other than with respect to transactions
among Parent and its Subsidiaries, all transactions otherwise permitted
under the Loan Documents with any of their Affiliates on terms that are
fair and reasonable and no less favorable to Parent, the Borrower or
such Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate and (ii) with respect to
transactions among Parent and its Domestic Subsidiaries, on the one
hand, and the Foreign Subsidiaries, on the other hand, all transactions
otherwise permitted under the Loan Documents on terms that are no less
favorable to Parent and its Domestic Subsidiaries than they would obtain
in a comparable arm's-length transaction with a Person not an
Affiliate, provided, however, that Parent and its Subsidiaries shall not
engage in any such transaction that would render Parent or any such
Subsidiary insolvent or cause a default under, or a breach
75
of, any material contract to which Parent or such Subsidiary
is a party.
(l) Performance of Material Contracts. Perform and observe in all
material respects the terms and provisions of each Material Contract to
be performed or observed by it, maintain each such Material Contract in
full force and effect (except to the extent such Material Contract
lapses or expires by its terms), enforce each such Material Contract in
all material respects in accordance with its terms, take all such action
to such end as may be from time to time requested by the Agents and,
upon the request of the Agents, make to each other party to each such
Material Contract such demands and requests for information and reports
or for action as Parent or the Borrower is entitled to make under such
Material Contract, and cause each of its Subsidiaries to do so.
(m) Cash Concentration Accounts. Maintain main cash concentration
accounts with Citibank, N.A. ("Citibank") and Lockbox Accounts into
which proceeds of Collateral are paid in accordance with the terms of
the Security Agreement with Citibank, N.A. ("Citibank") or one or more
substitute or additional banks acceptable to the Agents that have
accepted the assignment of such accounts, including such Citibank
accounts, to the Collateral Agent pursuant to the Security Agreement.
(n) Implied Debt Rating. From and after the date on which it
shall have obtained an Implied Debt Rating, no less frequently than once
during every Fiscal Year, obtain from S&P (or, if unavailable, from
Xxxxx'x) an update of the Implied Debt Rating and deliver a letter to
the Agents from S&P (or Xxxxx'x, as the case may be) advising the Agents
of the current Implied Debt Rating.
(o) Covenant to Guarantee Obligations and to Give Security. (i)
At such time as any new direct or indirect Domestic Subsidiary is formed
or acquired, cause such new Subsidiary to (A) within 10 days thereafter
or such later time as the Borrower and the Collateral Agent shall agree
(but in any event no later than 30 additional days thereafter), duly
execute and deliver to the Collateral Agent guarantees, in substantially
the form of Exhibit D-2 and otherwise in form and substance reasonably
satisfactory to the Collateral Agent, guaranteeing the Borrower's
Obligations under the Loan Documents and (B) within 30 days thereafter
or such later time as the Borrower and the Collateral Agent shall agree
(but in any event no later than 30 additional days thereafter), deliver
to the Collateral Agent a signed copy of a favorable opinion, addressed
to the Collateral Agent, of counsel for the Loan Parties acceptable to
the Collateral Agent as to the documents contained in
76
clause (A) above, as to such guarantees being legal, valid and binding
obligations of such Subsidiaries enforceable in accordance with their
terms and as to such other matters as the Collateral Agent may
reasonably request.
(ii) Prior to the Collateral Release Date, and at the expense of
the Borrower, at such time as any new direct or indirect Subsidiary is
formed or acquired (A) within 10 days thereafter or such later time as
the Borrower and the Collateral Agent shall agree (but in any event no
later than 30 additional days thereafter), furnish, or cause such new
Subsidiary to furnish, as the case may be, to the Collateral Agent a
description of the real and personal properties of such new Subsidiary
in detail satisfactory to the Collateral Agent, (B) within 30 days
thereafter or at such later time as the Borrower and the Collateral
Agent shall agree (but in any event no later than 30 additional days
thereafter), duly execute and deliver or cause such new Subsidiary or
the Person acquiring such assets to duly execute and deliver, as the
case may be, to the Collateral Agent pledges, assignments and other
security agreements, in substantially the form of Exhibits E-1 and E-2
or otherwise in form and substance reasonably satisfactory to the
Collateral Agent, securing payment of all the Obligations of the Loan
Parties under the Loan Documents and constituting Liens on all such
properties, (C) within 45 days thereafter or at such later time as the
Borrower and the Collateral Agent shall agree (but in any event no later
than 30 additional days thereafter), take, or cause such new Subsidiary
to take, as the case may be, whatever action (including, without
limitation, the filing of Uniform Commercial Code financing statements,
the giving of notices and the endorsement of notices on title documents)
may be necessary or advisable in the reasonable opinion of the
Collateral Agent to vest in the Collateral Agent (or in any
representative of the Collateral Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
security agreements delivered pursuant to this Section 5.01(o),
enforceable against all third parties in accordance with their terms,
(D) within 60 days thereafter or at such later time as the Borrower and
the Collateral Agent shall agree (but in any event no later than 30
additional days thereafter), deliver, or cause such new Subsidiary to
deliver, as the case may be, to the Collateral Agent a signed copy of a
favorable opinion, addressed to the Collateral Agent, of counsel for the
Loan Parties acceptable to the Collateral Agent as to the matters
contained in clauses (B) and (C) above, as to such security agreements
being legal, valid and binding obligations of the Borrower and its
Subsidiaries enforceable in accordance with their terms and as to such
other matters as the Collateral Agent may reasonably request and (E) at
any time and from time to time, promptly execute and deliver, or cause
such new
77
Subsidiary to execute and deliver, as the case may be, any and all
further instruments and documents and take all such other action as the
Collateral Agent may deem desirable in obtaining the full benefits of,
or in preserving the Liens of, such security agreements, subject,
however, to the provisions of clause (iii) below; provided, however,
that no Foreign Subsidiary of Parent shall be required to comply with
this Section 5.01(o); provided further that neither Parent nor any of
its Subsidiaries shall be required to pledge to the Collateral Agent for
the benefit of the Secured Parties more than 66-2/3% of the shares of
capital stock held by it in any of its Foreign Subsidiaries.
(iii) Prior to the Collateral Release Date, with respect to the
shares of capital stock of any Foreign Subsidiary that have been pledged
to the Collateral Agent for the benefit of the Secured Parties, within
60 days after such shares are pledged to the Collateral Agent (or such
later time as the Borrower and the Collateral Agent shall agree), take,
and cause each of its Subsidiaries to take, such action as may be
necessary (in addition to delivery to the Collateral Agent of the
certificates, if any, representing such shares) under the laws of the
jurisdiction under which such Foreign Subsidiary is organized to perfect
and protect the security interest granted to the Collateral Agent in
such shares, provided, however, that if such action would require undue
expense, such action shall only be required to be taken at such time as
the Investment by Parent, the Borrower and any of their respective
Subsidiaries in such Foreign Subsidiary equals or exceeds $1,000,000.
(iv) Upon the request of the Collateral Agent, prior to the
Collateral Release Date, and at the expense of the Borrower, (A) within
30 days after such request, duly execute and deliver or cause its
Subsidiaries to duly execute and deliver to the Collateral Agent
mortgages on real property owned by the Parent or its Subsidiaries
having a book value of $1,000,000 or more, as specified by and in form
and substance satisfactory to the Collateral Agent, securing payment of
all the Obligations of the Loan Parties under the Loan Documents and
constituting Liens on all such properties, (B) within 45 days after such
request, take, or cause its Subsidiaries to take, whatever action
(including, without limitation, the recording of mortgages, the filing
of Uniform Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) may be necessary or
advisable in the opinion of the Collateral Agent to vest in the
Collateral Agent (or in any representative of the Collateral Agent
designated by it) valid and subsisting Liens on the properties purported
to be subject to the mortgages delivered pursuant to this Section
5.01(o), enforceable against all third parties in accordance
78
with their terms, (C) within 60 days after such request, deliver to the
Collateral Agent a signed copy of a favorable opinion, addressed to the
Collateral Agent, of counsel for the Loan Parties acceptable to the
Collateral Agent as to the matters contained in clauses (A) and (B)
above, as to such mortgages being legal, valid and binding obligations
of Parent and its Subsidiaries enforceable in accordance with their
terms and as to such other matters as the Collateral Agent may
reasonably request, (D) as promptly as practicable after such request,
deliver to the Collateral Agent American Land Title Association surveys
in form and substance, and by a land surveyor, acceptable to the
Collateral Agent and American Land Title Association lender's extended
title insurance policies, in form and substance, with endorsements and
in amount, and issued by insurers, acceptable to the Collateral Agent,
as to each parcel of real property subject to such request and (E) at
any time and from time to time, promptly execute and deliver any and all
further instruments and documents and take all such other action as the
Collateral Agent may deem desirable in obtaining the full benefits of,
or in preserving the Liens of, such mortgages.
(p) Local Counsel Opinions. Within 30 days after the Effective
Date, the Borrower shall deliver to the Agents an opinion of Nevada
counsel confirming the perfection of the Liens on the Collateral located
in Nevada. The Borrower further agrees that within 30 days after the
date on which the value of Inventory located in any state other than New
York, California or Nevada equals $5,000,000 or more, the Borrower shall
deliver a similar opinion with respect to such state.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, neither Parent nor the Borrower will, at any
time, without the written consent of the Required Lenders or, if required under
Section 8.01, of all of the Lenders (other than any Lender which is, at such
time, a Defaulting Lender):
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file, or permit any of its Subsidiaries
to sign or file, under the Uniform Commercial Code of any jurisdiction,
a financing statement that names Parent or any of its Subsidiaries as
debtor, or sign, or permit any of its Subsidiaries to sign, any security
agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to
assign, any
79
accounts or other right to receive income, excluding, however, from the
operation of the foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) existing Liens set forth in Schedule 4.01(x)
hereof and any renewals, extensions or replacements thereof, but
not any increase in the amount of Debt secured thereby and not
any extension thereof to other property;
(iv) purchase money mortgages or other purchase money
Liens (including, without limitation, Capitalized Leases) in
favor of non-Affiliates of Parent and its Subsidiaries upon any
fixed or capital assets hereafter acquired by the Borrower or any
other Loan Party constituting real property interests or related
machinery and equipment, or purchase money mortgages (including,
without limitation, Capitalized Leases) on any such assets
hereafter acquired or existing at the time of acquisition of such
assets by the Borrower or any such other Loan Party, whether or
not assumed, so long as (A) any such Lien does not extend to or
cover any other asset of Parent or any of its Subsidiaries, (B)
such Lien secures the obligation to pay the purchase price of
such asset (or the obligation under such Capitalized Leases),
interest thereon and other customary incidental obligations
relating thereto only and (C) the principal amount outstanding
from time to time (or in the case of Capitalized Leases, notional
principal amount) of the aggregate Debt secured by all such
purchase money Liens (and Capitalized Leases) shall not exceed
the amounts specified in Section 5.02(b)(iii);
(v) Liens in favor of non-Affiliates of Parent
covering the assets of Foreign Subsidiaries (other than
Canadian Subsidiaries) solely to secure Permitted
Foreign Debt Issuances;
(vi) Liens securing Obligations of the Borrower under
the Trade L/C Facility; provided, however, such Liens shall cover
only the goods and documents for which a trade letter of credit
has been issued under the Trade L/C Facility, and shall not
extend to cover any other assets of any Loan Party or any of its
Subsidiaries; and
(vii) Liens on property of a Person existing at the
time such Person is merged into or consolidated with
80
the Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower; provided, that such Liens were not
created in contemplation of such merger, consolidation or
investment and do not extend to any assets other than those of
the Person merged into or consolidated with the Borrower or such
Subsidiary or acquired by the Borrower or such Subsidiary.
(b) Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:
(i) Debt under the Loan Documents;
(ii) unsecured Current Liabilities incurred in the
ordinary course of business other than unsecured Current
Liabilities for Indebtedness for Borrowed Money or which are
evidenced by bonds, debentures, notes or other similar
instruments;
(iii) Debt secured by Liens permitted by (A) Section
5.02(a)(ii), the outstanding principal amount of which shall not
exceed $10,000,000 outstanding at any time and (B) Section
5.02(a)(iv), the outstanding principal amount of which Debt shall
not exceed at any time (i) $25,000,000 from the Effective Date
until September 30, 1997, (ii) $30,000,000 from September 30,
1997 until September 30, 1998, (iii) $35,000,000 from September
30, 1998 until September 30, 1999, (iv) $40,000,000 from
September 30, 1999 until September 30, 2000 and (v) $45,000,000
from September 30, 2000 until the Termination Date;
(iv) Debt to the extent expressly permitted by
Section 5.02(c) hereof;
(v) Debt of the Borrower in respect of (A) interest
rate Hedge Agreements in an aggregate notional amount not to
exceed $150,000,000 at any time outstanding provided that the
maximum term of such Hedge Agreements shall not exceed five years
and that the aggregate notional amount of Debt in respect of such
interest rate Hedge Agreements does not exceed the aggregate
amount of Debt under the Loan Documents at the time the Borrower
enters into such interest rate Hedge Agreement and (B) foreign
exchange Hedge Agreements in an aggregate notional amount not to
exceed $50,000,000 at any time outstanding;
(vi) Debt of (A) the Borrower owed to any
Guarantor to the extent permitted by Section
5.02(f)(i), (ii), (iii) and (iv), provided that such
81
Debt owed shall have been pledged to the Lenders pursuant to the
Security Agreement, and (B) Parent, any other Guarantor or
Foreign Subsidiary owing to the Borrower or any other Guarantor
to the extent permitted by Section 5.02(f)(i), (ii), (iii) and
(iv), provided that such Debt of any Guarantor shall have been
pledged to the Lenders pursuant to the Security Agreement;
(vii) Debt of Foreign Subsidiaries in respect of
Permitted Foreign Debt Issuances; provided, however, that the
aggregate outstanding principal amount of all such Debt owed by
all Foreign Subsidiaries to non-Affiliates of Parent after
giving effect to such issuance shall not exceed at any time (i)
$25,000,000 from the Effective Date until September 30, 1997,
(ii) $30,000,000 from September 30, 1997 until September 30,
1998, (iii) $35,000,000 from September 30, 1998 until September
30, 1999, (iv) $40,000,000 from September 30, 1999 until
September 30, 2000 and (v) $45,000,000 from September 30, 2000
until the Termination Date (or, at the time of issuance of such
Debt, the foreign currency equivalent thereof for any such
issuance in a foreign currency (net of any foreign currency hedge
coverage available to the Borrower or such Foreign Subsidiary and
which can be netted in accordance with GAAP) at such time);
(viii) Debt of the Borrower under any revolving credit
or similar facility that constitutes ASCO Debt; provided,
however, that the aggregate principal amount of all such Debt
shall not exceed $50,000,000 at any time outstanding; provided
further, however, that the aggregate principal amount of such
Debt, together with the aggregate amount of Debt of the Borrower
pursuant to Section 5.02(b)(xiv) shall not exceed at any time
outstanding (i) from the Effective Date until September 30, 1997,
$70,000,000 and (ii) thereafter, $80,000,000;
(ix) unsecured Debt of the Borrower or any Domestic
Subsidiary incurred in the ordinary course of business for the
deferred purchase price of property or services, maturing within
one year from the date created; provided, however, that the
aggregate amount of all such Debt under this clause (ix) shall
not exceed $10,000,000 at any one time outstanding for the
Borrower and such Domestic Subsidiaries;
(x) Debt of any Canadian Subsidiary owing to the
Borrower in an aggregate principal amount outstanding
at any time not to exceed $10,000,000;
82
(xi) indorsements of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business;
(xii) existing Debt listed on Schedule 5.02(b) hereto
and any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, any such existing Debt,
provided that the terms of any such extending, refunding or
refinancing Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are otherwise
permitted by the Loan Documents and provided further that the
principal amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed, as a result of
or in connection with such extension, refunding or refinancing;
(xiii) Debt (except for Guarantee Obligations) of the
Parent in an amount not to exceed $100,000,000; provided,
however, that (A) the Net Cash Proceeds thereof are used promptly
to prepay the Facilities in accordance with Section 2.05(b)(i)
hereof and (B) such Debt shall be unsecured and subordinated to
the repayment in full of the Facilities, shall not have a
maturity date nor any scheduled amortization of principal earlier
than September 31, 2001 and shall be under terms reasonably
acceptable to the Required Lenders;
(xiv) Debt of the Borrower (A) under the Trade L/C
Facility in an aggregate principal amount not to exceed at any
time outstanding (i) from the Effective Date until September 30,
1997, $20,000,000 and (ii) thereafter, $25,000,000 and (B) under
the Trade Refinancing Facility in an aggregate amount not to
exceed (i) from the Effective Date until September 30, 1997,
$20,000,000 and (ii) thereafter, $25,000,000; provided, however,
that the aggregate principal amount of such Debt, together with
the aggregate amount of Debt of the Borrower pursuant to Section
5.02(b)(viii) shall not exceed at any time outstanding (i) from
the Effective Date until September 30, 1997, $70,000,000 and (ii)
thereafter, $80,000,000; provided further, that the Trade Credit
Intercreditor Agreement shall have been duly executed and
delivered by the Trade Refinancing Lenders or their authorized
representatives and by the Collateral Agent with the consent of
the Required Lenders prior to the creation, assumption or
incurrence of such Debt;
83
(xv) Guarantee Obligations of the Borrower or
Parent in an aggregate amount not to exceed $25,000,000
at any time outstanding; and
(xvi) Debt of any Person that becomes a Subsidiary of
the Borrower after the date hereof in accordance with the terms
of Section 5.02(f) that is existing at the time such Person
becomes a Subsidiary of the Borrower; provided that the aggregate
amount of such Debt shall not exceed that amount permitted under
Section 5.02(f)(ii).
(c) Lease Obligations. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lease Obligations, other than pursuant to (i) leases existing
on the date hereof and any extensions, renewals or replacements thereof
or (ii) leases (including all leases described in clause (i) above) that
do not in the aggregate require the Borrower and its Subsidiaries to
make payments in any Fiscal Year in excess of the amounts set forth
below:
Fiscal Year Annual Payments
----------- ---------------
1997 $35,000,000
1998 $40,000,000
1999 $45,000,000
2000
and thereafter $45,000,000
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that (i) any Domestic Subsidiary of the Borrower may merge
into or consolidate with any other Domestic Subsidiary of the Borrower;
provided that, in the case of any such consolidation, the Person formed
by such consolidation shall be a wholly owned Domestic Subsidiary of the
Borrower, (ii) any Foreign Subsidiary (other than a Canadian Subsidiary)
of the Borrower may merge into or consolidate with any other Foreign
Subsidiary (other than a Canadian Subsidiary) of the Borrower; provided
that, in the case of any such consolidation, the Person formed by such
consolidation shall be a wholly owned Foreign Subsidiary of the
Borrower, (iii) any of the Borrowers' Domestic Subsidiaries may merge
into the Borrower; provided, however, that in each case, immediately
after giving effect thereto, no event shall
84
occur and be continuing that constitutes a Default and, in the case of
any such merger to which the Borrower is a party, the Borrower is the
surviving corporation and (iv) after the Collateral Release Date, and
subject to the provisions of Section 8.13, Parent may consolidate with
or merge into the Borrower or the Borrower may consolidate with or merge
into Parent.
(e) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets,
or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of
its business;
(ii) sales of assets and properties of the Borrower
and its Subsidiaries no longer used or useful in the proper
conduct of their respective businesses having a value, together
with the value of all other such property of the Borrower and its
Subsidiaries so sold in the same Fiscal Year, of not greater than
$1,000,000;
(iii) sales of other assets, the higher of book value
and fair market value of which at the time of such sale does not
in the aggregate exceed the lesser of (A) 10% of the aggregate
amount of the book value of assets of the Borrower and its
Subsidiaries at any time of determination and (B) $50,000,000
(less, in each case, the trade-in value of all such other assets
traded in for replacement assets during such Fiscal Year and less
the amount of the proceeds from such other dispositions that are
expected to be and are used within ninety (90) days to acquire
replacement assets);
(iv) sales at not less than fair market value of the
assets identified on Schedule 5.02(e), such amount not to exceed
$2,000,000 (such assets being the "Checotah Assets");
(v) the sale or other disposition of assets to
Parent or any of its Subsidiaries to the extent
permitted by Sections 5.01(k) and 5.02(f);
(vi) the sale or discount of accounts (A) owing by
Persons incorporated, residing or having their principal place of
business in the United States in an aggregate amount not
exceeding $5,000,000 in face amount per calendar year or (B) that
are past due by more than 90 days in an aggregate amount not
exceeding $5,000,000 in face amount per calendar year, provided
85
that the sale or discount of such accounts shall be in the
ordinary course of the Borrower's business and consistent with
prudent business practices; provided further, that the Borrower
may make a one time sale of accounts in an aggregate amount not
to exceed $15,000,000 during the period from the Effective Date
to the Termination Date, provided that such sale shall be
consistent with prudent business practices;
(vii) (A) the licensing by the Borrower of trademarks
and trade names with respect to those lines of business in which
the Borrower is engaged as of the date hereof for consideration
consisting of an upfront payment with respect thereto and (B) all
other licensing by the Borrower of trademarks and trade names,
provided in each case, that such licensing shall take place on an
arm's-length basis, consistent with the provisions of the
Trademark, Patent and Copyright Security Agreement;
(viii) the sale or other disposition of assets for fair
value to entities in the business of arranging barter
transactions for consideration consisting of trade credits for
goods and services to be used by the Borrower and its
Subsidiaries in the ordinary course of business; and
(ix) the sale at not less than fair market value
of the assets comprising the Borrower's skiwear and
outlet divisions.
(f) Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment with respect to
any Person other than:
(i) Investments by the Borrower and the
Guarantors in any Person that (prior to such
Investment) is the Borrower or a Guarantor; provided,
however, that:
(A) each such Investment which shall be made other
than in the form of equity shall be evidenced by a
promissory note that constitutes part of the Collateral,
(B) such Investments shall not be made after the
continuance of a Default or if a Default would result
therefrom,
(C) the aggregate amount of loans and advances made
to Parent, other than those made pursuant to clause (D)
below, together with the aggregate amount of dividends
paid to Parent
86
pursuant to Section 5.02(g)(iii), shall not exceed those
amounts set forth in Section 5.02(g)(iii) and shall be for
those purposes set forth in Section 5.02(g)(iii), and
(D) the aggregate amount of loans and advances made
to Parent, other than those made pursuant to clause (C)
above, shall be made only to the extent that the proceeds
of such loans and advances are applied to the making of
Investments permitted pursuant to Section 5.02(f)(ii).
(ii) Investments by Parent and its Subsidiaries in
Parent and its Subsidiaries outstanding on the date hereof and
additional Investments, together with Debt permitted under
Section 5.02(b)(xvi), in an aggregate amount invested from the
date hereof not to exceed the sum of (x) $50,000,000 and (y)
$10,000,000 less the amount of dividends and loans paid to Parent
for the repurchase of its common stock as permitted hereunder;
provided that the amount of any one such additional Investment
(together with any Guarantee Obligations of the Borrower or
Parent in connection therewith) shall not exceed $25,000,000;
provided, however, that:
(A) in the case of any such Investment by a Person
in another Person, each such additional Investment shall
be made by means of a loan or advance (and, if such
additional Investment shall be in a Domestic Subsidiary,
shall be evidenced by a promissory note that constitutes a
part of the Collateral) or in equity up to an aggregate
amount of all such additional equity Investments equal to
$10,000,000 (it being understood that for purposes of this
clause (A), an Investment shall not include the purchase
or acquisition of any capital stock, warrants, rights,
options, obligations, other securities or the assets
comprising a substantial part or all of a business),
(B) immediately before and after giving effect
thereto, Parent and the Borrower shall be in pro forma
compliance, based on historical financial statements, with
the covenants contained in the Loan Documents (including,
without limitation, Section 5.04 (other than Section
5.04(e) to the extent (1) Capital Expenditures were made
by the Person in whom the Investment permitted hereunder
was made at a time when such Person was not a Subsidiary
of Parent and (2) such Capital Expenditures were not
otherwise made in connection with such Investment)),
taking into account such adjustments as may reasonably be
87
required to reflect expenses not reasonably
expected to be incurred after such Investment is
made,
(C) such additional Investments shall not be made
during the continuance of a Default or if a Default would
result therefrom,
(D) such additional Investments shall be in
activewear apparel manufacturing or wholesaling or
activewear apparel accessories manufacturing or
wholesaling businesses (or in related retail businesses on
a basis consistent with past practices),
(E) in the case of any such Investment by a Person
in a Foreign Subsidiary or by any Person in a joint
venture, each such additional Investment, together with
any Guarantee Obligations of the Borrower or Parent in
connection therewith, shall not exceed the sum of (i)
$25,000,000 and (ii) $10,000,000 less the amount of
dividends and loans paid to Parent for the repurchase of
its common stock as permitted hereunder,
(F) the amount of Capital Expenditures permitted in
Section 5.04(e) plus the aggregate amount of such
additional Investments shall not exceed $50,000,000 in any
Fiscal Year of the Borrower;
(iii) Investments made with common stock of Parent or
from the Net Cash Proceeds of any Capital Issuance of common
stock of Parent in activewear apparel manufacturing or
wholesaling or activewear apparel accessories manufacturing or
wholesaling businesses (or in related retail businesses on a
basis consistent with past practices), provided, however, that:
(A) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing
or would result therefrom,
(B) immediately before and after giving effect
thereto, Parent and the Borrower shall be in pro forma
compliance, based on historical financial statements, with
the covenants contained in the Loan Documents (including,
without limitation, Section 5.04 (other than Section
5.04(e) to the extent (1) Capital Expenditures were made
by the Person in whom the Investment permitted hereunder
was made at a time when such
88
Person was not a Subsidiary of Parent and (2) such Capital
Expenditures were not otherwise made in connection with
such Investment)), taking into account such adjustments as
may reasonably be required to reflect expenses not
reasonably expected to be incurred after such Investment
is made, and
(C) the business acquired shall be acquired
directly by Parent or one of its existing Subsidiaries or
shall become a new Subsidiary of Parent,
(iv) Investments by Parent and its Subsidiaries in
their Subsidiaries consisting of the Net Cash Proceeds of any
Capital Issuance of common stock by Parent solely to the extent
necessary to effectuate the Investments permitted by clause (iii)
above;
(v) endorsement of negotiable instruments for
deposit or collection in the ordinary course of
business;
(vi) Investments in Cash Equivalents;
(vii) Investments representing stock or obligations
issued to Parent or any of its Subsidiaries in settlement of
claims against any other Person by reason of a composition or
readjustment of debt or a reorganization of any debtor of Parent
or such Subsidiary;
(viii) the Guaranties;
(ix) Investments represented by the Cash
Collateral Account, the L/C Cash Collateral Account and
the other bank accounts permitted hereunder;
(x) loans or advances, not to exceed $2,000,000 in
the aggregate at any one time outstanding, to (A) employees of
the Borrower and its Subsidiaries as travel advances, short-term
loans or relocation expenses, and (B) to employees and
independent sales representatives as commission advances;
(xi) Investments representing the Debt of any Person owing
as a result of the sale by Parent or any of its Subsidiaries in
the ordinary course of business of its products or services (on
customary trade terms); and
(xii) Investments evidenced by promissory notes
representing the unpaid purchase price of assets and
89
property of the Borrower and its Subsidiaries permitted to be
sold (and so sold) under Section 5.02(e); and provided, however,
that for each such sale, the original principal amount of the
promissory note or notes representing the unpaid purchase price
for such sale shall not exceed fifteen percent (15%) of the total
purchase price therefor, with the remaining purchase price
therefor to be paid in cash.
(g) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any capital stock
of any Loan Party or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to the
stockholders of any Loan Party as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or securities to
stockholders of any Loan Party as such or issue or sell any capital
stock or any warrants, rights or options to acquire capital stock of any
Loan Party, or permit any of its Subsidiaries to do so, except that:
(i) any Subsidiary of the Borrower may declare or
pay cash dividends to the Borrower or to any other
wholly owned Subsidiary of the Borrower which is its
stockholder;
(ii) so long as no Default shall have occurred and be
continuing, or would result therefrom, Parent may (A) declare and
make any dividend payment or other distribution payable in its
common stock (including, without limitation, a stock split); (B)
at any time after (I) the Effective Date, declare and make in any
Fiscal Quarter any dividend payment or other distribution in cash
on its common stock or retire common stock in an aggregate amount
for all dividends, other distributions and retirements for such
Fiscal Quarter, together with all dividends, other distributions
and retirements made in the immediately preceding three Fiscal
Quarters, not to exceed 15% of the cumulative Consolidated net
income of Parent and its Subsidiaries during the four Fiscal
Quarters immediately preceding the Fiscal Quarter in which such
dividend payment or other distribution is made or (II) the date
on which the Implied Debt Rating shall be BBB-, declare and make
in any Fiscal Quarter any dividend payment or other distribution
payable in cash on its common stock or retire common stock in an
aggregate amount for all dividends, other distributions and
retirements for such Fiscal Quarter, together with all dividends,
other distributions and retirements made in the immediately
preceding three Fiscal Quarters, not to exceed 25% of the
cumulative Consolidated net income
90
of Parent and its Subsidiaries during the period beginning with
the Fiscal Quarter ended immediately prior to the date that is
one year prior to such date on which the Implied Debt Rating
shall be BBB- and ending with the Fiscal Quarter immediately
preceding the Fiscal Quarter in which such dividend payment or
other distribution is made; (C) after and subject to its
achieving the minimum EBITDA covenant for the three Fiscal
Quarter period ending on or about March 31, 1997 as set forth in
Section 5.04(d) hereof, repurchase shares of its common stock in
an aggregate amount not to exceed $10,000,000; (D) repurchase
shares of its common stock held by employees of the Borrower and
its Subsidiaries, provided that upon reissuance for cash of any
shares so repurchased to any employee of the Borrower, the cash
proceeds of such issuance shall immediately be contributed by
Parent to the common equity of the Borrower, and provided further
that the aggregate amount so used for the repurchase of shares
(X) from any one employee of the Borrower or any of its
Subsidiaries shall not exceed $100,000 and (Y) from all employees
shall not exceed $200,000 (less any amounts contributed by Parent
to the Borrower in respect of shares previously repurchased by
Parent); (E) issue common stock for cash; (F) issue stock to
effect acquisitions permitted by and subject to Section
5.02(f)(iii); and (G) pay dividends during fiscal 1997 in an
amount not to exceed the lesser of $.05 per share of its common
stock outstanding and $1,200,000; and
(iii) so long as no Default shall have occurred and be
continuing, or would result therefrom, the Borrower may (A)
declare and pay dividends to Parent (I) to be used by Parent
solely to pay (x) reasonable and customary directors' fees of
Parent, (y) operating and administrative expenses of Parent
incurred in the ordinary course of business and (z) taxes
required to be paid by Parent and (II) to be used by Parent to
repurchase its common stock in an aggregate amount not to exceed
$10,000,000; provided, however, that as at the date any such
dividend is paid, the Parent and Borrower shall each deliver to
the Lenders a certificate dated as of such date, of the type
required by Section 3.01(f)(x), and (B) in addition to the
dividends permitted by clause (A) above, declare and pay
dividends to Parent solely to the extent necessary to pay
dividends permitted to be paid by Parent under clause (ii)(B) or
(G) above or to purchase shares of stock of Parent permitted to
be purchased by Parent under clause (ii)(D) above; provided,
however, that the aggregate amount of dividends declared and paid
pursuant to this clause (iii) together with any loans or advances
made to Parent by the Borrower or any of
91
the Guarantors pursuant to Section 5.02(f)(i)(C) shall be for the
purposes set forth in this clause (iii) and shall not exceed the
amount set forth in this clause (iii).
(h) Change in Nature of Business. Make, or permit any
of its Subsidiaries to make, any change in the nature of its
business as carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its Subsidiaries
to amend, its certificate of incorporation or by-laws in a manner
adverse to the Facility Agents and the Lenders except that Parent or any
of its Subsidiaries may change its name, provided that, in the case of
Parent or the Borrower, the Agent shall have received 30 days' prior
notice from the Borrower and, in the case of any Domestic Subsidiary
(other than the Borrower), the Agents shall have received 10 days' prior
notice from the Borrower, provided further that, on or prior to the
effectiveness of any such change, Parent and its Subsidiaries shall
execute all documentation reasonably requested by the Collateral Agent
or otherwise required under the Loan Documents in order (A) so long as
the Collateral Release Date shall not have occurred, to protect the
Liens created under the Collateral Documents and (B) to protect the
other interests of the Agents and the Lenders under the Loan Documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies
(except as required or permitted by the Financial Accounting Standards
Board or generally accepted accounting principles), reporting practices
or Fiscal Year.
(k) Negative Pledge. Enter into or suffer to exist, or permit any
of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Facility
Agents and the Lenders or (ii) in connection with any Debt listed on
Schedule 5.02(b), any Debt under Capitalized Leases permitted under
Section 5.02(b)(iii), any Debt outstanding on the date such Subsidiary
first becomes a Subsidiary and any Permitted Foreign Debt Issuance by a
Foreign Subsidiary other than a Canadian Subsidiary.
(l) Partnerships. Become a general partner in any general or
limited partnership, or permit any of its Subsidiaries to do so, other
than any Subsidiary the sole assets of which consist of its interest in
such partnership.
(m) Amendment, Etc. of Material Contracts. Cancel or
terminate any Material Contract or consent to or accept any
92
cancellation or termination thereof or, where a Material Adverse Change
would result, amend or otherwise modify any Material Contract or give
any consent, waiver or approval thereunder, waive any default under or
any breach of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any
Material Contract or take any other action in connection with any
Material Contract that would impair the value of the interest or rights
of the Borrower thereunder or that would impair the rights or interests
of any Facility Agent or any Lender, or permit any of its Subsidiaries
to do any of the foregoing.
(n) Margin Stock. Permit at any time the value (as
determined in accordance with Regulation U) of the Margin
Stock owned by any Loan Party or any Loan Party and its
Subsidiaries, as the case may be, to exceed 25% of the value
(as determined in accordance with Section 221.2(g)(2) of
Regulation U) of the assets of such Loan Party, or such Loan
Party and its Subsidiaries, as the case may be.
SECTION 5.03. Reporting Requirements. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, Parent will, unless the Required Lenders
shall otherwise consent in writing, furnish to the Agents and each Lender:
(a) Monthly Financials; Borrowing Base Certificate. As soon as
available and in any event within 45 days after the end of any fiscal
month of Parent, (i) a copy of the unaudited Consolidated and
consolidating balance sheets of Parent and its Subsidiaries as of the
end of such month and the related Consolidated and consolidating
statements of operations and cash flows (but with respect to the
statement of cash flows, only on a Consolidated basis) for that portion
of the Fiscal Year ending as of the end of such month, (ii) a copy of
the unaudited Consolidated and consolidating statements of operations
and cash flows (but with respect to the statement of cash flows, only on
a Consolidated basis) of Parent and its Subsidiaries for such month and
(iii) a copy of the unaudited Consolidated and consolidating statements
of operations of Parent and its Subsidiaries setting forth the actual
year to date figures on a monthly basis combined with the budgeted
figures for each of the remaining months of that Fiscal Year, setting
forth in comparative form in each case referred to in clauses (i), (ii)
and (iii) above, actual figures for such period as against budgeted
figures (including variances in dollars and percent) for such period in
the current Fiscal Year (such budgeted figures for the Fiscal Year
ending on or about June 30, 1997 to be comprised of projections
previously delivered to the Agents and thereafter, as delivered pursuant
to clause (e) below) and actual figures
93
as against actual figures (including variances in dollars and percent)
for the comparable period during the prior Fiscal Year and accompanied
by (A) management letters prepared by Designated Officers of Parent and
the Borrower explaining the variances in the corresponding budgets and
prior Fiscal Years' figures related to the foregoing and (B) the
certification of Designated Officers of Parent and the Borrower
certifying that (i) all such financial statements are complete and
correct and present fairly in all material respects the Consolidated and
consolidating financial position and the Consolidated and consolidating
results of operations and cash flows (but with respect to cash flows,
only on a Consolidated basis) of Parent and its Subsidiaries as at the
end of such month, and (ii) no Default exists as of such time or, if any
Default then exists, specifying the details and anticipated effect
thereof. Upon the Collateral Agent's request and in no event less
frequently than 15 days after the end of each fiscal month of Parent, or
sooner if available, the Borrower shall deliver to the Agents a
Borrowing Base Certificate as of the end of such fiscal month or such
other additional date as the Collateral Agent shall request.
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each Fiscal Quarter of Parent, (i) a
copy of the unaudited Consolidated and consolidating balance sheets of
Parent and its Subsidiaries as of the end of such quarter and the
related Consolidated and consolidating statements of operations and cash
flows (but with respect to the cash flows, only on a Consolidated basis)
for that portion of the Fiscal Year ending as of the end of such
quarter, each prepared in accordance with GAAP (subject to normal year
end adjustments and without footnotes), (ii) a copy of the unaudited
Consolidated and consolidating statements of operations and cash flows
(but with respect to the cash flows, only on a Consolidated basis) of
Parent and its Subsidiaries for such quarter, prepared in accordance
with GAAP (subject to normal year end adjustments and without footnotes)
and (iii) a copy of the unaudited Consolidated and consolidating
statements of income of Parent and its Subsidiaries setting forth the
actual year to date figures on a quarterly basis combined with the
budgeted figures for each of the remaining quarters of that Fiscal Year,
setting forth in comparative form in each case referred to in clauses
(i), (ii) and (iii) above, actual figures for such period as against
budgeted figures (including variances in dollars and percent) for such
period in the current Fiscal Year (such budgeted figures for the Fiscal
Year ending on or about June 30, 1997 to be comprised of projections
previously delivered to the Agents and thereafter, as delivered pursuant
to clause (e) below) and actual figures as against actual figures
(including variances in dollars and percent) for the comparable period
94
during the prior Fiscal Year and accompanied by (A) management letters
prepared by Designated Officers of Parent and the Borrower explaining
the variances in the corresponding budgets and prior Fiscal Years'
figures related to the foregoing, (B) the certification of Designated
Officers of Parent and the Borrower certifying that (i) all such
financial statements are complete and correct and present fairly in all
material respects in accordance with GAAP (subject to normal year end
adjustments and without footnotes), the Consolidated and consolidating
financial position and the Consolidated and consolidating results of
operations and cash flows (but with respect to the cash flows, only on a
Consolidated basis) of Parent and its Subsidiaries as at the end of such
quarter and (ii) no Default exists as of such time or, if any Default
then exists, specifying the details and anticipated effect thereof and
(C) a schedule showing in reasonable detail the calculations used in
determining compliance with the covenants under Sections 5.02(b) and
5.04.
(c) Annual Financials. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
audited Consolidated financial statements of Parent and its
Subsidiaries, consisting of the annual Consolidated balance sheet,
statement of operations, stockholders' equity (deficit) and cash flows,
setting forth in comparative form, in each case, Consolidated figures
for the prior Fiscal Year, which financial statements shall be prepared
in accordance with GAAP, certified without qualification (other than a
qualification approved by the Agents) by Ernst & Young or other
independent certified public accountants of recognized national standing
selected by Parent and acceptable to the Agents, and accompanied by (i)
a schedule prepared by the chief financial officer, showing in
reasonable detail the calculations used in determining compliance with
the financial covenants under Sections 5.02(b) and 5.04 hereof, (ii) a
report from such accountants to the effect that in connection with their
audit examination, nothing has come to their attention to cause them to
believe that a Default had occurred or, if they believe a Default has
occurred, specifying the details thereof; provided that such report
shall not, and shall not be deemed to, contain any conclusion by such
accountants with respect to (x) whether any event, act or condition has
or is expected to have a Material Adverse Effect or (y) any Default the
existence of which is subject to the determination or opinion of the
Agents, the Lenders or the Required Lenders, provided further, however,
that such report shall describe in reasonable detail any event, act or
condition that is, or is reasonably expected to be, required under
generally accepted auditing standards to be mentioned in an auditor's
opinion on the financial statements of Parent and its Subsidiaries,
taken as a whole, and (iii) a
95
certification of Designated Officers of Parent and the Borrower
certifying that (A) all such financial statements are complete and
correct and present fairly in all material respects in accordance with
GAAP the Consolidated financial position and the Consolidated results of
operations and cash flows of Parent and its Subsidiaries as at the end
of such Fiscal Year and (B) no Default exists as of such time or, if any
Default then exists, specifying the details and anticipated effect
thereof.
(d) Default Notices. As soon as practicable, but in any event not
later than two Business Days after any officer of any Loan Party becomes
aware of the existence of any Default, or any development or other
information which might reasonably be expected to have a Material
Adverse Effect, telephonic or telegraphic notice specifying the nature
of such Default or development or information, including the anticipated
effect thereof, and the action that the Loan Parties have taken or
propose to take in respect thereof which notice shall be promptly
confirmed in writing within five days.
(e) Annual Business Plan. Not later than 45 days after the
beginning of each Fiscal Year, an annual business plan for Parent and
its Subsidiaries for such Fiscal Year, in form, scope and substance
reasonably satisfactory to the Agents, setting forth:
(i) projected Consolidated and consolidating
balance sheets of Parent and its Subsidiaries for such
Fiscal Year, on a monthly basis;
(ii) projected Consolidated and consolidating
statements of income of Parent and its Subsidiaries for
such Fiscal Year, on a monthly and quarterly basis; and
(iii) projected Consolidated statements of cash flows
of Parent and its Subsidiaries, including summary details of cash
disbursements, including Capital Expenditures, projected
operating profit of Parent and its Subsidiaries and summary of
personnel and physical plant requirements, for such Fiscal Year,
on a monthly basis;
together with (x) projections of the nature requested in clauses (i)
through (iii) above, computed on an annual basis for each Fiscal Year
remaining until the Termination Date and (y) appropriate supporting
details as reasonably requested by any Lender. The annual business plan
delivered in connection with this Section 5.03(e) shall be accompanied
by evidence satisfactory to the Agents that such plan shall have been
approved by the board of directors of Parent.
96
(f) Tax Returns. Promptly upon request by the Agents, copies of
all federal, state, local and foreign tax returns and reports in respect
of income, franchise or other taxes on or measured by income (excluding
sales, use or like taxes) filed by Parent or any of its Subsidiaries.
(g) ERISA Events. Promptly and in any event within 10 days after
any Loan Party or any of its ERISA Affiliates knows or has reason to
know that any ERISA Event with respect to any Loan Party or any of its
ERISA Affiliates has occurred, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and proposes
to take with respect thereto.
(h) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any of its
ERISA Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan of any Loan Party or any of its ERISA
Affiliates or to have a trustee appointed to administer any such Plan.
(i) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) with respect to each Plan of each Loan Party or any of its ERISA
Affiliates.
(j) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any of its
ERISA Affiliates from the sponsor of a Multiemployer Plan of any Loan
Party or any of its ERISA Affiliates, copies of each notice concerning
(i) the imposition of Withdrawal Liability by any such Multiemployer
Plan, (ii) the reorganization or termination, within the meaning of
Title IV of ERISA, of any such Multiemployer Plan or (iii) the amount of
liability incurred, or that may be incurred, by such Loan Party or any
of its ERISA Affiliates in connection with any event described in clause
(i) or (ii).
(k) Litigation. Promptly after the commencement thereof, notice
of all actions, suits, investigations, litigation and proceedings before
any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, affecting any Loan Party or any
of its Subsidiaries of the type described in Section 4.01(i), and
promptly after the occurrence thereof, notice of any adverse change in
the status or the financial effect on any Loan Party or any of its
Subsidiaries of the
97
Disclosed Litigation from that described on Schedule 4.01(i).
(l) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that Parent sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements,
that any Loan Party or any of its Subsidiaries files with the Securities
and Exchange Commission or any governmental authority that may be
substituted therefor, or with any national securities exchange.
(m) Agreement Notices. Promptly upon receipt thereof, copies of
all material notices, requests and other documents received by any Loan
Party or any of its Subsidiaries under or pursuant to any Material
Contract and such information and reports regarding the Material
Contracts as the Agents from time to time may reasonably request.
(n) Environmental Conditions. Promptly after the occurrence
thereof, notice of any condition or occurrence on any property of any
Loan Party or any of its Subsidiaries that results in a material
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit or would be reasonably likely
to (i) form the basis of an Environmental Action against any Loan Party
or any of its Subsidiaries or such property that could have a Material
Adverse Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(o) Auditor Reports. Within 15 days after receipt thereof but in
no event later than September 30 of each year, a copy of all management
reports and management letters prepared for Parent and its Subsidiaries
(other than those management reports and management letters which deal
solely with Foreign Subsidiaries) by Ernst & Young or other independent
certified public accountants of recognized national standing selected by
Parent and acceptable to the Agents.
(p) Implied Debt Rating. Within two Business Days after receipt
thereof by any Loan Party, copies of each notice from S&P (or Xxxxx'x,
if S&P has ceased to provide Implied Debt Ratings) indicating any change
in the Implied Debt Rating.
(q) Owned Real Property. Within 45 days of the end of
each Fiscal Quarter, a complete and accurate list of all
real property having a book value of $1,000,000 or more,
98
owned by any Loan Party or any of their Domestic Subsidiaries, showing
as of the end of such Fiscal Quarter the street address, county or other
relevant jurisdiction, state, record owner and book and estimated fair
value thereof.
(r) Other Information. Promptly upon request, such other
information respecting the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party or
any of its Subsidiaries as any Lender through the Documentation Agent or
the Paying Agent may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, Parent and the Borrower will, unless the Required
Lenders, or in the case of Section 5.04(c), the Supermajority of Lenders,
otherwise consent in writing:
(a) Interest and Lease Expense Coverage Ratio. Maintain, as of
the end of each period of four Fiscal Quarters, a ratio of (i) the sum
of Consolidated EBITDA of Parent and its Subsidiaries plus payments on
Consolidated Lease Obligations of Parent and its Subsidiaries to (ii)
the sum of Cash Interest Expense plus payments on Consolidated Lease
Obligations of Parent and its Subsidiaries of not less than the amount
set forth below for each period set forth below:
Four Fiscal Quarter
Period Ending On or About Ratio
------------------------- -----
June 30, 1997 2.40:1.00
September 30, 1997 2.50:1.00
December 31, 1997 2.50:1.00
March 31, 1998 2.50:1.00
June 30, 1998 2.50:1.00
September 30, 1998 2.50:1.00
December 31, 1998 2.50:1.00
March 31, 1999 2.50:1.00
June 30, 1999 2.50:1.00
September 30, 1999 2.75:1.00
December 31, 1999 2.75:1.00
March 31, 2000 2.75:1.00
June 30, 2000 2.75:1.00
September 30, 2000 2.75:1.00
December 31, 2000
and thereafter 3.00:1.00
99
(b) Minimum Adjusted Net Worth. Maintain at all times Adjusted
Net Worth of not less than $100,000,000 plus 85% of the Consolidated net
income (if any) of the Parent and its Subsidiaries for each Fiscal
Quarter beginning with the Fiscal Quarter ending on or about September
30, 1996 plus the aggregate amount of any additions to the Consolidated
stockholders' equity of the Parent made after the Effective Date as a
result of any Capital Issuance of common stock or Preferred Stock by
Parent.
(c) Maximum Total Debt to EBITDA Ratio. Maintain, as of the end
of each period of four Fiscal Quarters, a ratio of Total Debt to
Consolidated EBITDA of Parent and its Subsidiaries for such period of
four Fiscal Quarters of not greater than the amount set forth below for
each period set forth below:
Four Fiscal Quarter
Period Ending On or About Ratio
------------------------- -----
June 30, 1997 3.25:1.00
September 30, 1997 3.00:1.00
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 3.00:1.00
September 30, 1998
and thereafter 2.75:1.00
(d) Minimum EBITDA. Maintain, as of the end of each Fiscal
Quarter, Consolidated EBITDA of Parent and its Subsidiaries for the
number of Fiscal Quarters then ended of not less than the amount set
forth below for such Fiscal Quarter:
One Fiscal Quarter Minimum
Period Ending On or About EBITDA
------------------------- -----
September 30, 1996 $(9,300,000)
Two Fiscal Quarter
Period Ending On or About
-------------------------
December 31, 1996 $(1,900,000)
Three Fiscal Quarter
Period Ending On or About
--------------------------
March 31, 1997 $23,000,000
100
Four Fiscal Quarter Minimum
Ending On Or About EBITDA
------------------- -------
June 30, 1997 $43,500,000
September 30, 1997 $43,500,000
December 31, 1997 $50,000,000
March 31, 1998 $55,000,000
June 30, 1998 $55,000,000
September 30, 1998
and thereafter $66,000,000
(e) Capital Expenditures. Not make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures (other than those Capital
Expenditures which shall otherwise be considered to be Investments to
the extent permitted by 5.02(f)) made by Parent and its Subsidiaries
during any Fiscal Year to exceed the amount set forth below for such
Fiscal Year:
Fiscal Year Amount
----------- ------
1997 $25,000,000
1998 $20,000,000
1999 $12,500,000
and thereafter
provided that 50% of the amount of Capital Expenditures permitted
hereunder to be made in any Fiscal Year that are not made in such Fiscal
Year may be carried forward to the next (but not any subsequent) Fiscal
Year and provided further that for purposes of this subsection (e),
Capital Expenditures made in any Fiscal Year shall be deemed to be made
first as a use of Capital Expenditures permitted to be made pursuant to
the first proviso of this subsection (e) and thereafter as a use of the
limit of Capital Expenditures set forth above for such Fiscal Year;
provided, however, that the aggregate amount of Capital Expenditures
during any Fiscal Year after giving effect to the first proviso of this
subsection (e) shall not exceed $25,000,000.
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(f) Total Assets. Not permit at any time Parent and its
Subsidiaries (other than the Borrower) to own more than 25% in the
aggregate of the total assets of Parent and its Subsidiaries (without
regard to the ownership of capital stock by Parent and its Subsidiaries
in any Subsidiary of Parent) determined on a Consolidated basis in
accordance with GAAP.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Advance
as the same becomes due and payable, or the Borrower or any other Loan
Party shall fail to pay any interest on any Advance or make any other
payment under any Loan Document within three Business Days after the
same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any
of its officers) under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made or,
pursuant to Section 3.02, deemed made; or
(c) any Loan Party shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(e), 5.01(g), 5.01(o),
5.02, 5.03 (other than Sections 5.03(e) and 5.03(o)) or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant
or agreement contained in any Loan Document on its part to be performed
or observed, if such failure shall remain unremedied for 10 days and, in
the case of any term, covenant or agreement contained in Section
5.03(e), if such failure shall remain unremedied for 15 days, (i) after
written notice thereof shall have been given to the Borrower by any
Facility Agent or Lender or (ii) after any officer of the Borrower
obtains knowledge thereof; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay
any principal of, premium or interest on, or any other amount payable in
respect of, any Debt that is outstanding in a principal or notional
amount of at least $2,000,000 in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration,
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demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to
the stated maturity thereof; or
(f) Parent, the Borrower, any other Loan Party or any of its
Subsidiaries having EBITDA in excess of $500,000 for the most recent
period of four consecutive Fiscal Quarters then ended shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any such Loan Party or Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it) that is being diligently contested by it in
good faith, either such proceeding shall remain undismissed or unstayed
for a period of 30 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) shall
occur; or any such Loan Party or Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this
subsection (f); or
(g) any judgment or order for the payment of money in excess of
$3,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless the payment of such
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judgment or order is covered by insurance and such insurance
coverage is not in dispute; or
(h) any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that is reasonably likely to
have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(i) any provision of any Loan Document, after delivery thereof
pursuant to Section 3.01 or 5.01(o), shall for any reason cease to be
valid and binding on or enforceable against any Loan Party which is
party to it, or any such Loan Party shall so state in writing; or
(j) any Collateral Document, after delivery thereof pursuant to
Section 3.01 or 5.01(o), shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
Lien on the Collateral purported to be covered thereby; or
(k) (i) Parent shall at any time cease to have legal and
beneficial ownership of 100% of the capital stock of the Borrower; or
(ii) any Person (other than Xxxxx X. Xxxxxxx), which Persons shall not
be acting in concert with any other Person, or two or more Persons
acting in concert, shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934), directly or indirectly, of Voting
Stock of Parent (or other securities convertible into such Voting Stock)
representing 25% (or in the case of Pentland Ventures Limited, 23%
(without taking into account any Voting Stock of Parent purchased
pursuant to the Amended and Restated Right of First Offer Letter
Agreement, dated July 2, 1992, between GE Capital and Pentland Ventures
Limited)) or more of the combined voting power of all Voting Stock of
Parent; or (iii) any Person (other than Xxxxx X. Xxxxxxx), which Persons
shall not be acting in concert with any other Person, or two or more
Persons acting in concert shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, the power to
exercise, directly or indirectly, a controlling influence over the
management or policies of Parent, or control over Voting Stock of Parent
(or other securities convertible into such securities) representing 25%
(or in the case of Pentland Ventures Limited, 23% (without taking into
account any Voting Stock of Parent purchased pursuant to the Amended and
Restated Right of First Offer Letter Agreement, dated July 2, 1992,
between GE Capital and Pentland Ventures Limited)) or more of combined
voting power
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of all Voting Stock of Parent; or (iv) Xxxxx X. Xxxxxxx (or, in the case
of her death or disability, another officer or officers of comparable
experience and ability selected by the Borrower within 180 days
thereafter after consultation with the Facility Agents) shall cease to
be Chairman and Chief Executive Officer of Parent and the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan of
any Loan Party or any of its ERISA Affiliates, and the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency
of such Plan and the Insufficiency of any and all other Plans of the
Loan Parties and their ERISA Affiliates with respect to which an ERISA
Event shall have occurred and then exist (or the liability of the Loan
Parties and their ERISA Affiliates related to such ERISA Event) exceeds
$3,000,000; or
(m) any Loan Party or any of its ERISA Affiliates shall be in
default, as defined in Section 4219(c)(5) of ERISA, with respect to any
payment of Withdrawal Liability, and the sum of the outstanding balance
of such Withdrawal Liability and the outstanding balance of any other
Withdrawal Liability that any Loan Party or any of its ERISA Affiliates
has incurred exceeds $3,000,000; or
(n) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any
of its ERISA Affiliates, that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and, as a result of such reorganization or termination, the
aggregate annual contributions of the Loan Parties and their ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans, for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs, by an amount exceeding $3,000,000;
then, and in any such event, the Agents (i) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Appropriate Lender (other than a Lender in accordance with
Section 2.02(b) or 2.13(c)) to make Advances, of the Fronting Bank to issue
Letters of Credit and of the Swing Line Bank to make Swing Line Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, (A) by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without
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presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; provided, however, that upon the occurrence of an Event of
Default under subparagraph (f) above, (x) the obligation of each Lender (other
than a Lender in accordance with Section 2.02(b) or 2.13(c)) to make Advances,
of the Fronting Bank to issue Letters of Credit and of the Swing Line Bank to
make Swing Line Advances shall automatically be terminated and (y) the Notes,
all such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Paying Agent may, irrespective of whether it is taking any of the actions
described in Section 6.01 or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower will, pay to the Collateral Agent on
behalf of the Lenders, in same day funds at the Collateral Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Agents and the Lenders or that the total amount of such funds is less
than the aggregate Available Amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the Facility Agents, pay to the Collateral Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Facility Agents determine to be free and clear of any such right and claim.
ARTICLE VII
THE FACILITY AGENTS
SECTION 7.01. Authorization and Action. Each Lender (in its
capacities as a Lender and as a Hedge Bank) hereby appoints and authorizes each
Facility Agent to take such action as agent on behalf of such Lender and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to such Facility Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without
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limitation, enforcement or collection of the Notes), no Facility Agent shall be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Facility Agent shall be required to take any action
that exposes such Facility Agent to personal liability or that is contrary to
this Agreement or applicable law. Each Facility Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 7.02. Facility Agents' Reliance, Etc. None of the
Facility Agents nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their own
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction. Without limitation of the generality of the foregoing,
each Facility Agent: (i) may treat the payee of any Note as the holder thereof
until the Paying Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants
and other experts selected by it, and shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with the Loan Documents;
(iv) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any Loan Document on
the part of any Loan Party or to inspect the property (including the books and
records) of any Loan Party; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Scotiabank, GE Capital and Affiliates. With respect
to its Commitments and the Advances made by it and the Notes issued to it, each
of Scotiabank and GE Capital shall have the same rights and powers under the
Loan Documents as any other Lender and may exercise the same as though it were
not an
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Facility Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Scotiabank and GE Capital in their individual
capacities. Each of Scotiabank and GE Capital and their respective affiliates
may accept deposits from, lend money to, act, to the extent permitted under
applicable law, as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries and any Person who may do business with or own
securities of any Loan Party or any such Subsidiary, all as if Scotiabank and GE
Capital were not Facility Agents and without any duty to account therefor to the
Lenders. GE Capital owns shares of common stock of Parent. Each Lender
acknowledges the potential conflict of interest between GE Capital as a
stockholder of Parent and GE Capital as an Agent and Lender.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Facility Agent or
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Facility
Agent or Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. Each Lender severally agrees to
indemnify each Facility Agent (to the extent not promptly reimbursed by the
Borrower), from and against such Lender's ratable share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
reasonable costs, expenses or disbursements, of any kind or nature whatsoever,
that may be imposed on, incurred by, or asserted against such Facility Agent in
any way relating to or arising out of the Loan Documents or any reasonable
action taken or omitted by such Facility Agent under the Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Facility Agent's gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction. Without limitation of the foregoing, each Lender agrees to
reimburse each Facility Agent promptly upon demand for such Lender's ratable
share of any reasonable costs and expenses payable by the Borrower under Section
8.04, to the extent that such Facility Agent is not promptly reimbursed for such
costs and expenses by the Borrower or Parent. For purposes of this Section 7.05,
the Lenders' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders, (b) their
respective
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Pro Rata Shares of the aggregate Available Amount of all Letters of Credit
outstanding at such time, plus (c) their respective Unused Revolving Credit
Commitments at such time. In the event that any Defaulted Advance shall be owing
by any Defaulting Lender at any time, such Lender's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been made
shall be considered to be unused for purposes of this Section 7.05, to the
extent of the amount of such Defaulted Advance. The failure of any Lender to
reimburse any Facility Agent promptly upon demand for such Lender's ratable
share of any amount required to be paid by the Lenders to such Facility Agent as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse such Facility Agent for such other Lender's ratable share of such
amount, but no Lender shall be responsible for the failure of any other Lender
to reimburse such Facility Agent for such other Lender's ratable share of such
amount.
SECTION 7.06. Successor Facility Agents. Any Facility Agent may
resign as to any or all of the Facilities at any time by giving written notice
thereof to the other Facility Agents, the Lenders and the Borrower and may be
removed as to all of the Facilities at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Facility Agent as to such of the
Facilities as to which such Facility Agent has resigned or been removed,
provided that so long as no Default has occurred and is continuing, in the case
of a successor Facility Agent that was not prior to such appointment a Lender
hereunder, such appointment shall be subject to the approval of the Borrower,
such approval not to be unreasonably withheld. If no successor Facility Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Facility Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring Facility
Agent, then the retiring Facility Agent may, on behalf of the Lenders, appoint a
successor Facility Agent, which shall be a Lender hereunder or a commercial bank
organized or licensed under the laws of the United States, or of any State
thereof, and having a combined capital and surplus of at least $250,000,000,
subject to the proviso contained in the immediately preceding sentence. Upon the
acceptance of any appointment as Facility Agent hereunder by a successor
Facility Agent as to all of the Facilities and upon the execution and filing or
recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor Facility
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Facility Agent, and the
retiring Facility Agent shall be discharged from its duties and obligations
under the Loan
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Documents. After any retiring Facility Agent's resignation or removal hereunder
as Facility Agent as to all of the Facilities, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Facility Agent as to any Facilities under this Agreement.
SECTION 7.07. Co-Agents. Each of the Co-Agents, if any, has been
or may hereafter be designated a Co-Agent in recognition of its respective
Commitment, and the use of such title does not impose on such Co-Agent any
duties or obligations greater than those of any other Lender.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower or Parent therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders (other than any
Lender which is, at such time, a Defaulting Lender), do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01 or, in the
case of the initial Borrowing, Section 3.02, (ii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Lenders, that shall be required for the Lenders or any of them to take
any action hereunder, (iii) release all or substantially all of the Collateral
(other than pursuant to Section 8.12 hereof), (iv) permit the creation,
incurrence, assumption or existence of any Lien on any material portion of
Collateral to secure any Obligations other than (A) Obligations owing to the
Lenders and the Facility Agents under the Loan Documents and (B) other Debt
secured thereby pursuant to the terms of the Collateral Documents as in effect
on the date of the initial Borrowing, (v) release any Guaranty of any Guarantor
other than in connection with the sale of such Guarantor as permitted under this
Agreement or permitted by a duly executed waiver or consent hereunder or (vi)
amend this Section 8.01 or Section 8.12, (b) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and each Lender
affected by such amendment, waiver or consent, (i) reduce the principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender, (ii) postpone any date fixed for any payment of
principal of, or interest on, the Notes held by such Lender or any fees or other
amounts payable hereunder to such Lender or (iii) change the order of
application of any prepayment set forth in Section 2.05 in any manner that
materially affects
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such Lender, (c) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and, for each Facility directly affected by such
amendment, waiver or consent, each Lender that has a Commitment under such
Facility, (i) increase the Commitments of such Lender or subject such Lender to
any additional obligations or (ii) amend Section 2.03(c) or 2.05(b)(ii) and (d)
no amendment, waiver or modification of Section 5.04(c) shall be effective
unless in writing and signed by a Supermajority of Lenders; provided further
that no amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Bank or the Fronting Bank, as the case may be, in addition to the
Lenders required above to take such action, affect the rights or obligations of
the Swing Line Bank or of the Fronting Bank, as the case may be, under this
Agreement; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by a Facility Agent in addition to the Lenders
required above to take such action, affect the rights or duties of such Facility
Agent under this Agreement or any Note. Any request by any Loan Party for an
amendment or waiver of any provision of any Loan Document shall be made by such
Loan Party by giving a written request therefor to the Documentation Agent.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to either of Parent or the Borrower, at its address at
00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Financial Officer; if
to any Lender or Facility Agent, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed, telecopied, telexed
or cabled, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to a
Facility Agent pursuant to Article II, III or VII shall not be effective until
received by such Facility Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or Facility Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
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SECTION 8.04. Costs and Expenses. (a) Parent and the Borrower
agree to pay on demand (i) all reasonable costs and expenses (other than taxes,
including interest, additions to tax and penalties relating thereto, except to
the extent that the same are required to be paid pursuant to Section 2.11
hereof) of the Facility Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and all other out-of-pocket expenses and (B) the reasonable fees
and expenses of counsel for the Facility Agents with respect thereto, with
respect to advising the Facility Agents as to their respective rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally, and any proceeding ancillary thereto and (ii) all
reasonable costs and expenses (other than taxes, including interest, additions
to tax and penalties relating thereto, except to the extent that the same are
required to be paid pursuant to Section 2.11 hereof) of the Facility Agents and
the Lenders in connection with the enforcement of the Loan Documents, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally or otherwise (including,
without limitation, the reasonable fees and expenses of counsel for the Facility
Agents and each Lender with respect thereto).
(b) Parent and the Borrower agree to indemnify and hold harmless
each Facility Agent and each Lender and each of its respective Affiliates,
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel, but other than taxes, including interest, additions to tax and
penalties relating thereto, except to the extent that the same are required to
be paid pursuant to Section 2.11 hereof) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related
to or in connection with (i) the Facilities and any of the transactions
contemplated by this Agreement or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries, or any Environmental Action relating in any way to any Loan Party
or any of its Subsidiaries, in each case whether or not such
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investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto, and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. Each of the Borrower and Parent also
agrees, to the fullest extent permitted under applicable law, not to assert any
claim against any Facility Agent, any Lender, any of their respective
Affiliates, or any of their respective directors, officers, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein or in any other Loan Document or the actual or proposed use
of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a prepayment pursuant to Section 2.05, a payment or Conversion
pursuant to Section 2.08(b)(i) or 2.09(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason, or by an Eligible
Assignee to a Lender other than on the last day of the Interest Period for such
Advance upon an assignment of rights and obligations under this Agreement
pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to
Section 8.07(a), the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Paying Agent), pay to the Paying Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment, including, without limitation, any loss (including loss of anticipated
profits, but excluding taxes, including interest, additions to tax and penalties
relating thereto, which shall be governed by Section 2.11), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses
or other amounts payable by it under any Loan Document, including, without
limitation, reasonable fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by any Facility Agent or Lender, in its
sole discretion and the Facility Agents may in their discretion treat such
payments as an Advance under the Revolving Credit Facility.
SECTION 8.05. Right of Setoff. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agents to
declare the
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Notes due and payable pursuant to the provisions of Section 6.01, each Lender
and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes held by such Lender, irrespective of whether
such Lender shall have made any demand under this Agreement or such Note or
Notes and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such setoff and application; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender and its Affiliates under
this Section 8.05 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) that such Lender and its Affiliates
may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, Parent and the
Facility Agents and when the Agents shall have been notified by each Lender that
such Lender has executed it and the Effective Date shall have occurred and
thereafter shall be binding upon and inure to the benefit of the Borrower,
Parent, each Facility Agent and each Lender and its respective successors and
assigns, except that neither the Borrower nor Parent shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
assign, and, if (i) demanded by the Borrower following (x) a payment by the
Borrower of Taxes with respect to such Lender in accordance with Section 2.11,
(y) the occurrence of an event that would, upon payment to such Lender of
amounts hereunder, require a payment by the Borrower of Taxes with respect to
such Lender in accordance with Section 2.11 or (z) a demand by such Lender
pursuant to Section 2.09(a), (b) or (d) and (ii) upon at least 30 Business Days'
notice to such Lender and the Paying Agent, will assign, to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it (including accrued interest) and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a fixed and the same percentage of all rights and obligations of the
assigning Lender under and in respect of each Facility under which it has a
Commitment, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
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Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the effective date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $15,000,000, and
the amount of the Commitment of the assigning Lender being retained by such
Lender immediately after giving effect to such assignment (determined as of the
effective date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $15,000,000, (iii) each such assignment shall be
to an Eligible Assignee, (iv) each such assignment made as a result of a demand
by the Borrower pursuant to this Section 8.07(a) shall be arranged by the
Borrower after consultation with the Agents and shall be either an assignment of
all of the rights and obligations of the assigning Lender under this Agreement
or an assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that together cover all
of the rights and obligations of the assigning Lender under this Agreement, (v)
no Lender shall be obligated to make any such assignment as a result of a demand
by the Borrower pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement and (vi) the parties
to each such assignment shall execute and deliver to the Paying Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and, for each Assignment and
Acceptance other than an Assignment and Acceptance between a Lender and an
assignee which satisfies the requirements of clause (i) of the definition of
"Eligible Assignee", a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no
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representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
such documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon any Facility Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes each Facility Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement and the other
Loan Documents as are delegated to such Facility Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.
(c) The Paying Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Facility Agents and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Paying Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained
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therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Paying Agent in exchange for the
surrendered Note or Notes a new Note or Notes to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it under a Facility
pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment under such Facility, a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit C.
(e) Each Lender may sell participations in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Facility Agents and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release (other than as
provided by the terms of this Agreement and other Loan Documents) all or
substantially all of the Collateral.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower or any other Loan Party
furnished to such Lender by or on behalf of the Borrower or any other Loan
Party; provided, however, that prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.
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(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
(h) In the event that S&P, Xxxxx'x or Xxxxxxxx'x BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not rated
by InsuranceWatch Ratings Service)) shall, after the date that any Lender
becomes a Lender, downgrade the long-term certificate of deposit ratings of such
Lender, and the resulting ratings shall be below BBB- by S&P, Baa3 by Xxxxx'x
and B by Xxxxxxxx'x BankWatch (or BB, in the case of a Lender that is an
insurance company (or, in the case of an insurance company not rated by
InsuranceWatch Ratings Service, B by Best's Insurance Reports)), then the
Fronting Bank or the Borrower shall have the right, but not the obligation, upon
notice to such Lender, to replace (or, in the case of a request by the Fronting
Bank, to request the Borrower to use its reasonable efforts to replace) such
Lender with an assignee Lender (in accordance with and subject to the
restrictions contained in Section 8.07(a)), and such affected Lender hereby
agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 8.07(a)) all of its interests, rights
and obligations in respect of its Commitment, Advances and other Obligations
owing to it, together with the obligations of such affected Lender hereunder, to
such assignee Lender; provided, however, that (i) no such assignment shall
conflict with any law, rule and regulation or order of any governmental
authority and (ii) such assignee Lender shall pay to such affected Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Advances made by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to it
hereunder.
SECTION 8.08. Governing Law and Consent to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York. Each Loan Party hereby irrevocably submits to
the jurisdiction of any New York State or Federal court sitting in the Borough
of Manhattan, The City of New York, in any action or proceeding arising out of
or relating to this Agreement, and each Loan Party hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. Each Loan Party hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. Each
Loan Party also irrevocably consents to the service of copies of the summons and
complaint
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and any other process which may be served in any such action or proceeding by
the mailing or delivery of a copy of such process to such Loan Party at its
address specified in Section 8.02.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. No Liability of the Fronting Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Fronting Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Fronting Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Fronting Bank, and the Fronting Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) the Fronting Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Fronting Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, the
Fronting Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.11. Confidentiality. Neither any Facility Agent nor any
Lender shall disclose any Confidential Information to any Person without the
consent of Parent or the Borrower, other than (a) to such Facility Agent's or
Lender's Affiliates and its officers, directors, employees, agents and advisors
and to actual or prospective Eligible Assignees and participants, and then only
on a confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) as requested or
119
required by any state, federal or foreign authority or examiner regulating banks
or banking and (d) in connection with the enforcement or exercise of any of its
rights or remedies under any of the Loan Documents.
SECTION 8.12. Release of Collateral. Provided that no Default has
occurred and is continuing, within three Business Days after the date on which
the Documentation Agent receives evidence reasonably satisfactory to it from
Parent or the Borrower that an Implied Debt Rating of (i) BBB- from S&P and Baa3
from Moody's or (ii) BBB from S&P or (iii) Baa2 from Xxxxx'x is currently in
effect, the Documentation Agent shall so notify the Collateral Agent and the
Lenders, and upon receipt of such notice, the Collateral Agent shall, as soon as
practicable, release all of the Collateral from the lien of the Collateral
Documents (the date on which the Collateral Agent receives such notice being the
"Collateral Release Date"); provided, however, that such release shall not be
effective as to Collateral which constitutes Inventory unless and until all
Liens on any of the assets of Parent or any of its Subsidiaries securing
obligations under or created in connection with that portion of ASCO Debt
representing refinancing obligations thereunder and the Trade Refinancing
Facility shall have been released.
SECTION 8.13. Merger or Consolidation of Parent and the Borrower.
From and after the Collateral Release Date, Parent may consolidate with or merge
into the Borrower or the Borrower may consolidate with or merge into Parent,
provided that the corporation formed by such consolidation or into which the
Borrower or Parent shall be merged shall, at the effective time of such
consolidation or merger, assume the Borrower's Obligations on the Notes and
under the other Loan Documents to which it is a party and assume the performance
of the Borrower's covenants under the Loan Documents to which it is a party in a
writing satisfactory in form and substance to the Required Lenders, provided
further that the Loan Documents shall at the effective time of such
consolidation or merger be amended, supplemented or otherwise modified as
necessary to provide for such consolidation or merger on terms and conditions
consistent with the Loan Documents and satisfactory to the Required Lenders,
provided, however, that immediately prior to and after giving effect thereto, no
event shall occur and be continuing that constitutes a Default.
SECTION 8.14. Waiver of Jury Trial. EACH OF THE BORROWER, PARENT,
THE FACILITY AGENTS AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY FACILITY AGENT OR LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
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SECTION 8.15. Press Releases. Parent and the Borrower agree that
neither they nor their Affiliates will in the future issue any press releases or
other public disclosure using the name of GE Capital or its affiliates or
referring to this Agreement or the other Loan Documents without at least two (2)
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) Parent or the Borrower or
such Affiliate is required to do so under law and then, in any event, Parent or
the Borrower will consult with GE Capital before issuing such press release or
other public disclosure. Parent and the Borrower consent to the publication by
either Agent or any Lender of a tombstone or similar advertising material
relating to the financing transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AUTHENTIC FITNESS PRODUCTS INC.
By [SIGNATURE]
______________________________________
Title:
AUTHENTIC FITNESS CORPORATION
By [SIGNATURE]
______________________________________
Title:
THE BANK OF NOVA SCOTIA,
as Agent, Administrative Agent, Paying
Agent, Swing Line Bank and Fronting
Bank
By
______________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent, Documentation Agent
and Collateral Agent
By
______________________________________
Title:
Lenders and Hedge Banks
THE BANK OF NOVA SCOTIA
By
______________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By
______________________________________
Title:
[NAMES OF OTHER LENDERS]
CREDIT AGREEMENT
122
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
AUTHENTIC FITNESS PRODUCTS INC.
By
______________________________________
Title:
AUTHENTIC FITNESS CORPORATION
By
______________________________________
Title:
THE BANK OF NOVA SCOTIA,
as Agent, Administrative Agent, Paying
Agent, Swing Line Bank and Fronting
Bank
By [SIGNATURE]
______________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION, as
Agent, Documentation Agent
and Collateral Agent
By [SIGNATURE]
______________________________________
Title:
Lenders and Hedge Banks
THE BANK OF NOVA SCOTIA
By [SIGNATURE]
______________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By [SIGNATURE]
______________________________________
Title:
[NAMES OF OTHER LENDERS]
122
