EXHIBIT 10.13
EXECUTION COPY
1997 SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
LEVI XXXXXXX & CO.
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Senior Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
and
BANK OF AMERICA, N.A.,
as Agent for Banks
BANK OF AMERICA, N.A.,
as Collateral Agent for Banks
dated as of January 31, 2000
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Defined Terms...................................................... 1
1.2 Other Interpretive Provisions...................................... 25
1.3 Accounting Principles.............................................. 26
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; the Credit....................... 27
2.2 Notes; Loan Accounts............................................... 27
2.3 Procedure for Committed Borrowing.................................. 27
2.4 Conversion and Continuation Elections.............................. 27
2.5 Utilization of Aggregate Commitment in Offshore Currencies......... 29
2.6 Bid Borrowings..................................................... 29
2.7 Procedure for Bid Borrowing........................................ 29
2.8 Voluntary Prepayments.............................................. 29
2.9 Mandatory Prepayments and Reductions of Aggregate Commitment....... 29
2.10 Repayment; Scheduled Reductions of Aggregate Commitment............ 31
2.11 Interest........................................................... 32
2.12 Fees............................................................... 32
2.13 Computation of Fees and Interest................................... 33
2.14 Payments by the Company............................................ 34
2.15 Payments by the Banks to the Agent................................. 34
2.16 Sharing of Payments, etc........................................... 35
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.............................................................. 36
3.2 Illegality......................................................... 37
3.3 Increased Costs and Reduction of Return............................ 38
3.4 Funding Losses..................................................... 38
3.5 Inability to Determine Rates....................................... 39
3.6 Reserves on Offshore Rate Loans.................................... 39
3.7 Certificates of Banks.............................................. 39
3.8 Substitution of Banks.............................................. 39
3.9 Survival........................................................... 40
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(continued)
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ARTICLE IV
CONDITIONS PRECEDENT
4.1 Condition to Closing............................................... 40
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization, Powers, Good Standing, Business, Ownership of
Subsidiaries and Capitalization.................................... 44
5.2 Authorization of Borrowing, etc.................................... 44
5.3 Financial Condition................................................ 45
5.4 Title to Properties; Liens......................................... 46
5.5 Litigation; Adverse Facts.......................................... 46
5.6 Payment of Taxes................................................... 46
5.7 Materially Adverse Agreements; Performance......................... 46
5.8 Governmental Regulation............................................ 47
5.9 ERISA Compliance................................................... 47
5.10 Environmental Matters.............................................. 47
5.11 Compliance With Laws............................................... 48
5.12 Regulation U....................................................... 48
5.13 Disclosure......................................................... 48
5.14 Matters Relating to Collateral..................................... 48
5.15 Intangible Assets.................................................. 49
5.16 Insurance.......................................................... 49
5.17 Year 2000.......................................................... 49
5.18 Solvency........................................................... 50
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements and Other Reports............................. 50
6.2 Corporate Existence, etc........................................... 53
6.3 Compliance With Laws, etc.......................................... 54
6.4 Compliance with Agreements......................................... 54
6.5 Payment of Taxes and Claims........................................ 54
6.6 Maintenance of Properties; Insurance............................... 54
6.7 Inspection......................................................... 55
6.8 Use of Proceeds.................................................... 55
6.9 Execution of Guaranty and Collateral Documents by Additional
Subsidiaries....................................................... 55
6.10 Compliance with ERISA.............................................. 56
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TABLE OF CONTENTS
(continued)
Page
6.11 Post Closing Actions............................................... 57
6.12 Transfer of Receivables............................................ 59
ARTICLE VII
NEGATIVE COVENANTS
7.1 Indebtedness; Derivative/FX Contracts.............................. 59
7.2 Limitation on Liens and Negative Pledges........................... 61
7.3 Dispositions....................................................... 63
7.4 Fundamental Changes................................................ 64
7.5 Use of Proceeds.................................................... 65
7.6 Leverage Ratio..................................................... 66
7.7 Interest Coverage Ratio............................................ 66
7.8 Minimum Consolidated EBITDA........................................ 67
7.9 Change in Business................................................. 67
7.10 ERISA.............................................................. 67
7.11 Investments........................................................ 68
7.12 Restricted Payments................................................ 69
7.13 Operating Lease Obligations........................................ 69
7.14 Transactions with Affiliates....................................... 69
7.15 Amendments of Documents Relating to Indebtedness and Receivables... 69
7.16 Consolidated Capital Expenditures.................................. 70
7.17 Materially Adverse Agreements...................................... 70
7.18 Limitations on Upstreaming......................................... 70
7.19 Change in Auditors................................................. 70
7.20 Restricted Subsidiaries............................................ 71
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default................................................... 71
8.2 Remedies........................................................... 73
8.3 Rights Not Exclusive............................................... 74
ARTICLE IX
AGENT; COLLATERAL AGENT
9.1 Appointment and Authorization...................................... 74
9.2 Delegation of Duties............................................... 75
9.3 Liability of Agent or Collateral Agent............................. 75
9.4 Reliance by Agent and Collateral Agent............................. 75
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TABLE OF CONTENTS
(continued)
Page
9.5 Notice of Default.................................................. 76
9.6 Credit Decision; Disclosure of Information by Agent and Collateral
Agent.............................................................. 76
9.7 Indemnification of Agent and Collateral Agent...................... 77
9.8 Agent in Individual Capacity....................................... 77
9.9 Successor Agent.................................................... 78
9.10 Successor Collateral Agent......................................... 78
9.11 Withholding Tax.................................................... 79
9.12 Co-Agents; Managing Agents......................................... 80
9.13 Collateral Documents, Guaranties and Intercreditor Agreement....... 80
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers............................................. 81
10.2 Notices............................................................ 81
10.3 No Waiver; Cumulative Remedies..................................... 82
10.4 Costs and Expenses................................................. 82
10.5 Company's Indemnification.......................................... 83
10.6 Payments Set Aside................................................. 83
10.7 Successors and Assigns............................................. 84
10.8 Assignments, Participations, etc................................... 84
10.9 Designated Bidders................................................. 85
10.10 Confidentiality.................................................... 85
10.11 Set-off............................................................ 86
10.12 Notification of Addresses, Lending Offices, etc.................... 87
10.13 Counterparts....................................................... 87
10.14 Severability....................................................... 87
10.15 No Third Parties Benefited......................................... 87
10.16 Change in Accounting Principles.................................... 87
10.17 Governing Law and Jurisdiction..................................... 87
10.18 Interpretation..................................................... 88
10.19 Representation of Banks............................................ 88
10.20 Waiver of Jury Trial............................................... 88
10.21 Amendments and Waivers Regarding Collateral........................ 89
ARTICLE XI
GENERAL RELEASE
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EXHIBIT LIST
Exhibit I............................[FORM OF] NOTICE OF CONVERSION/CONTINUATION
Exhibit II........................................................[FORM OF] NOTE
Exhibit III.....................................[FORM OF] COMPLIANCE CERTIFICATE
Exhibit IV.........................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY
Exhibit V................................[FORM OF] PLEDGE AND SECURITY AGREEMENT
Exhibit VI....................................................[FORM OF] GUARANTY
Exhibit VII..................................[FORM OF] ASSIGNMENT AND ACCEPTANCE
Exhibit VIII......................................................PRIVITY LETTER
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1997 SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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This 1997 SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of January 31, 2000 among Levi Xxxxxxx & Co., a Delaware corporation
("Company"); the several financial institutions from time to time party to this
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Agreement (collectively "Banks" and individually a "Bank"); the several
----- ----
financial institutions party to this Agreement as Senior Managing Agents; the
several financial institutions party to this Agreement as Managing Agents; the
several financial institutions party to this Agreement as Co-Agents; Bank of
America, N.A. as Agent for Banks; and Bank of America, N.A. as Collateral Agent
for Banks.
WHEREAS, Banks and Company are parties to the 1997 Amended and Restated
Credit Agreement dated as of February 7, 1997, as amended by First Amendment to
1997 Amended and Restated Credit Agreement dated as of February 2, 1999, Second
Amendment to 1997 Amended and Restated Credit Agreement dated as of April 6,
1999 and Third Amendment to 1997 Amended and Restated Credit Agreement dated as
of August 31, 1999 (the "Existing Credit Agreement"); and
-------------------------
WHEREAS, pursuant to a Waiver dated as of November 12, 1999, Banks agreed
to waive certain provisions of the Existing Credit Agreement until February 3,
2000; and
WHEREAS, Company and Banks have agreed to amend and restate the Existing
Credit Agreement; and
WHEREAS, Company has agreed to secure its Obligations hereunder and under
the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a
Lien on substantially all of its personal property and certain of its real
property (other than Principal Property), including a pledge of 100% of the
Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital
Stock of certain of its Foreign Subsidiaries (other than Restricted
Subsidiaries); and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Collateral Agent, on behalf of Banks, a
Lien on substantially all of their respective personal property and certain of
their respective real property (other than Principal Property), including a
pledge of 100% of the Capital Stock of certain of their respective Domestic
Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign
Subsidiaries (other than Restricted Subsidiaries);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Defined Terms. In addition to the terms defined elsewhere in this
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Agreement, the following terms have the following meanings:
"Affected Bank" has the meaning specified in Section 3.8.
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1
"Affiliate" means, as to any Person, any other Person which,
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directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or indirectly,
(a) power to vote 10% or more of the Securities (on a fully diluted basis)
of the other Person having ordinary voting power for the election of
directors or managing general partners, or (b) to direct or cause the
direction of the management and policies of the other Person, whether
through the ownership of voting Securities, membership interests, by
contract, or otherwise.
"Affiliated Fund" means, with respect to any Bank, a fund that
---------------
invests in commercial loans and is managed by the same investment advisor
as such Bank, an Affiliate of such Bank or by an Affiliate of the same
investment advisor as such Bank.
"Agent" means Bank of America, in its capacity as agent for Banks
-----
hereunder, and any successor agent pursuant to Section 9.9.
"Agent-Related Persons" means Agent and any successor agent arising
---------------------
under Section 9.9, together with their respective Affiliates (including, in
the case of Bank of America, the Arranger), and the officers, directors,
employees, agents, counsel, and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set forth on
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the signature page hereto in relation to Agent or such other address as
Agent may from time to time specify in accordance with Section 10.2.
"Aggregate Bridge Commitment" means the combined Commitments (as
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defined therein) under the Bridge Credit Agreement.
"Aggregate Commitment" means the combined Commitments of Banks. The
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Aggregate Commitment as of the Closing Date is $584,728,765.58.
"Agreement" means this 1997 Second Amended and Restated Credit
---------
Agreement, as amended, supplemented, or modified from time to time.
"Amended and Restated 1997 364 Day Credit Agreement" means the
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Amended and Restated 1997 364 Day Credit Agreement dated as of January 31,
2000, between Company, Bank of America, as agent, Bank of America, as
collateral agent, and the other lenders parties thereto.
"Amended and Restated 1999 180 Day Credit Agreement" means the
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Amended and Restated 1999 180 Day Credit Agreement dated as of January 31,
2000, between Company, Bank of America, as administrative agent, Bank of
America, as collateral agent, and the other lenders parties thereto.
"Applicable Margin" has the meaning specified in Section 2.11.
-----------------
"Arranger" means BancAmerica Securities, Inc., a Delaware
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corporation.
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"Asset Disposition" means the sale by Company or any of its
-----------------
Subsidiaries to any Person other than Company or any of its Subsidiaries of
(a) any of the stock of any of Company's Subsidiaries, (b) substantially
all of the assets of any division or line of business of Company or any of
its Subsidiaries, or (c) any other assets (whether tangible or intangible)
of Company or any of its Subsidiaries other than Dispositions permitted by
Sections 7.3(a), 7.3(c), 7.3(e), 7.3(f), 7.3(g), 7.3(h), and 7.3(m).
"Assignee" has the meaning specified in Section 10.8(a).
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"Assignment and Acceptance" means an Assignment and Acceptance
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substantially in the form of Exhibit VII.
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"Bank" and "Banks" have the meanings specified in the introductory
----------------
clause hereto; provided that for purposes of any determination made with
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respect to Citicorp U.S.A., Inc. under Section 3.2, 3.3, 3.4, 3.5 or 3.6,
"Bank" shall be deemed to include Citibank, N.A.
"Bank of America" means Bank of America, N.A.
---------------
"Bankruptcy Code" means Title 11 of the United States Code, entitled
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"Bankruptcy" (11 U.S.C. (S)101, et seq.).
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"Base Rate" means, for any day, a fluctuating rate per annum equal
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to the higher of (a) the Federal Funds Rate plus 1/2 of 1%, and (b) the
----
rate of interest in effect for such day as publicly announced from time to
time by Bank of America as its "prime rate." Such rate is a rate set by
Bank of America based upon various factors including Bank of America's
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.
"Base Rate Committed Loans" [Intentionally Omitted]
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"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"Borrower Party" means Company and any of its Material Domestic
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Subsidiaries from time to time party to a Loan Document, and "Borrower
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Parties" means all such Persons, collectively.
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"Borrowing" [Intentionally Omitted]
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"Borrowing Date" [Intentionally Omitted]
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"Bridge Credit Agreement" means the Bridge Credit Agreement dated as
-----------------------
of January 31, 2000, between Company, Bank of America, as administrative
agent, Bank of America, as collateral agent, and the other lenders parties
thereto.
3
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City, New York or San Francisco,
California are authorized or required by law to close and with respect to
calculations, disbursements, and payments relating to Offshore Rate Loans,
a day on which dealings are carried on in the offshore Dollar interbank
market in London.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Capital Lease", as applied to any Person, means any lease of any
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property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capital Markets Transaction" means (a) an issuance or sale of
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Securities by Company, through a public offering or private placement, or
(b) a capital contribution to Company; provided, however, that in the case
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of debt Securities, any such Securities (i) shall be unsecured, and (ii)
shall not have a stated maturity date or required principal payments
earlier than five years from the date of issuance thereof.
"Capital Stock" means (a) in the case of a corporation, corporate
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stock, (b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (c) in the case of a partnership,
partnership interests (whether general or limited), (d) in the case of a
limited liability company, membership interests, and (e) any other interest
or participation that confers on a Person the right to receive a share of
the profits and losses of, or distribution of assets of, the issuing
Person.
"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.1 are satisfied or waived by Majority Banks, or in the
case of Section 4.1(d), waived by the Person entitled to obtain such
payment.
"Co-Agent" means each of the financial institutions party to this
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Agreement which is identified as a Co-Agent in its signature block.
"Co-Documentation Agent" means each of The Bank of Nova Scotia,
----------------------
Citicorp USA, Inc. and Xxxxxx Guaranty Trust Company of New York.
"Code" means the Internal Revenue Code of 1986 as amended and any
----
regulations promulgated thereunder.
"Collateral" means, collectively, all of the Property (including
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Capital Stock) in which Liens are purported to be granted pursuant to the
Collateral Documents as security for the Obligations.
"Collateral Agent" means Bank of America, in its capacity as
----------------
collateral agent for Banks hereunder, and any successor collateral agent.
4
"Collateral Agent-Related Person" means Collateral Agent and any
-------------------------------
successor collateral agent arising under Section 9.10, together with their
respective Affiliates (including, in the case of Bank of America, the
Arranger), and the officers, directors, employees, agents, counsel, and
attorneys-in-fact of such Persons and Affiliates.
"Collateral Documents" means the Pledge and Security Agreement, the
--------------------
Foreign Pledge Agreements, the Mortgages, and all other instruments or
documents delivered by any Borrower Party pursuant to this Agreement or any
of the other Loan Documents in order to grant to Collateral Agent, on
behalf of Banks, a Lien on any Property of that Borrower Party as security
for the Obligations.
"Commitment" means, for each Bank, the amount set forth opposite
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such Bank's name on Schedule 2.1, as such amount may be reduced or adjusted
------------
from time to time in accordance with the terms of this Agreement.
"Commitment Percentage" means, as to any Bank, the percentage set
---------------------
forth opposite such Bank's name on Schedule 2.1, as adjusted as
------------
contemplated herein.
"Committed Borrowing" [Intentionally Omitted]
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"Committed Loan" [Intentionally Omitted]
--------------
"Company" has the meaning specified in the introductory clause
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hereto.
"Compliance Certificate" means a certificate substantially in the
----------------------
form of Exhibit III properly completed and signed by a Responsible Officer
-----------
of Company.
"Consolidated Capital Expenditures" means, for any period, the sum
---------------------------------
of the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet of
Company and its Subsidiaries) by Company and its Subsidiaries during that
period that, in conformity with GAAP, are included in "additions to
property, plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries;
provided, however, that Consolidated Capital Expenditures shall not include
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software costs.
"Consolidated EBITDA" means, for any period, for Company and its
-------------------
Subsidiaries on a consolidated basis, an amount equal to (a) the sum,
without duplication, of (i) Consolidated Net Income, (ii) Consolidated
Interest Charges, (iii) the amount of taxes, based on or measured by
income, used or included in the determination of such Consolidated Net
Income, (iv) the amount of depreciation and amortization expense deducted
in determining such Consolidated Net Income, and (v) accruals for Company's
Global Success Sharing Plan, Long Term Performance Plan, Leadership Shares
and Long Term Incentive Payment Plan minus (b) Company's cash payments for
-----
Company's Global Success Sharing Plan, Long Term Performance Plan,
Leadership Shares and Long Term Incentive Payment Plan.
5
"Consolidated Excess Cash Flow" means, for any period, an amount (if
------------------------------
positive) equal to (a) the sum, without duplication, of the amounts for
such period of (i) Consolidated EBITDA plus (or minus) (ii) loss (gain) on
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sales of assets plus (iii) to the extent not otherwise included, all
----
noncash expenses plus (iv) the first $50,000,000 of proceeds from the
----
Pending IceHouse Disposition plus (or minus) (v) the Consolidated Working
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Capital Adjustment minus (b) the sum, without duplication, of the amounts
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for such period for (i) scheduled repayments of Consolidated Funded
Indebtedness (excluding repayments of revolving loans except to the extent
the corresponding commitments are permanently reduced in connection with
such repayments), (ii) Consolidated Capital Expenditures (net of any
proceeds of related financings with respect to such expenditures), (iii)
Consolidated Interest Charges paid in cash, (iv) taxes based on income of
Company and its Subsidiaries paid in cash, (v) the excess of bank fees paid
over bank fees amortized, and (vi) cash payments for long-term employee
benefits and other related liabilities (other than changes in accruals
under the Global Success Sharing Plan, Long Term Performance Plan,
Leadership Shares and Long Term Incentive Payment Plan).
"Consolidated Funded Indebtedness" means, as of any date of
--------------------------------
determination, for Company and its Subsidiaries on a consolidated basis,
the sum, without duplication, of (a) the outstanding principal amount of
all obligations and liabilities, whether current or long-term, for borrowed
money (including Obligations in respect of Loans hereunder), (b) that
portion of obligations with respect to Capital Leases that are capitalized
in the consolidated balance sheet of Company and its Subsidiaries, in each
case to the extent treated as debt in accordance with GAAP, and (c) the
outstanding amount of all obligations under any Receivables Purchase
Facility.
"Consolidated Interest Charges" means, for any period, for Company
-----------------------------
and its Subsidiaries on a consolidated basis, all interest (net of all
interest income), premium payments, fees, charges and related expenses
payable by Company and its Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in
accordance with GAAP.
"Consolidated Net Income" means, for any period, for Company and its
-----------------------
Subsidiaries on a consolidated basis, the net income (or loss) of Company
and its Subsidiaries determined in accordance with GAAP for that period.
"Consolidated Net Tangible Assets" means the aggregate amount of
--------------------------------
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities (excluding any indebtedness
for money borrowed having a maturity of less than 12 months from the date
of the most recent consolidated balance sheet of Company but which by its
terms is renewable or extendable beyond 12 months from such date at the
option of the borrower), and (b) all goodwill, trade names, patents,
unamortized debt discount and expense and any other like intangibles, all
as set forth on the most recent consolidated balance sheet of Company and
computed in accordance with generally accepted accounting principles.
6
"Consolidated Working Capital Adjustment" means, for any period, for
---------------------------------------
Company and its Subsidiaries on a consolidated basis, an amount equal to
(a) the sum of the decrease (increase) during that period in current
assets, excluding changes in cash and cash equivalents, and changes in
current tax assets plus (b) the sum of the increase (decrease) during that
----
period in current liabilities, excluding changes in short-term Indebtedness
or current maturities of long-term Indebtedness, changes in short-term tax
liabilities and changes in short-term interest liabilities.
"Contractual Obligation" means, as to any Person, any provision of
----------------------
any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which Company (a)
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converts Base Rate Loans to Offshore Rate Loans, or (b) converts Offshore
Rate Loans to Base Rate Loans, or (c) continues Offshore Rate Loans having
Interest Periods expiring on such date as Offshore Rate Loans but with a
new Interest Period.
"Debtor Relief Laws" means the Bankruptcy Code, and all other
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liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect affecting the rights
of creditors generally.
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means an interest rate equal to the Base Rate plus
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the Applicable Margin, if any, applicable to Base Rate Loans plus 2% per
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annum; provided, however, that with respect to an Offshore Rate Loan, the
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Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Margin) otherwise applicable to such Loan plus 2%
----
per annum, in each case to the fullest extent permitted by applicable laws;
provided further that with respect to an Offshore Rate Loan, upon the
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expiration of the Interest Period in effect at the time any such increase
in interest rate is effective, such Offshore Rate Loan shall thereupon
become a Base Rate Loan and shall thereafter bear interest at the Default
Rate applicable to Base Rate Loans.
"Derivative/FX Contract" means (a) any and all interest rate swaps,
----------------------
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions,
cap transactions, floor transactions, collar transactions, currency swaps,
cross-currency rate swaps, currency options, spot contracts or any other
similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject
7
to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions
of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., the International
Foreign Exchange Master Agreement, or any other master agreement, including
any such obligations or liabilities under any such agreement.
"Derivative/FX Lender" means a Bank party to the Bridge Credit
--------------------
Agreement or any of its Affiliates.
"Designated Bidders" [Intentionally Omitted]
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"Disposition" means the sale, transfer, license or other disposition
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(including any sale and leaseback transaction) of any Property by any
Person, including any sale, assignment, transfer or other disposal with or
without recourse of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollars", "dollars" and "$" each mean lawful money of the United
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States.
"Domestic Subsidiary" means any Subsidiary of Company that is
-------------------
incorporated or organized in the United States, any state thereof or in the
District of Columbia.
"Eligible Assignee" means (a) a financial institution organized
-----------------
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of any such country, and having a combined capital and surplus
of at least $100,000,000, provided that such bank is acting through a
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branch or agency located in the United States; (c) a Person that is
primarily engaged in the business of commercial banking and that is (i) a
Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a Bank is a
Subsidiary, or (iii) a Person of which a Bank is a Subsidiary; (d) another
Bank, any Affiliate of a Bank and any Affiliated Fund of any Bank; and (e)
any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act of 1933, as amended) which extends
credit or buys loans as one of its businesses, including but not limited
to, insurance companies, mutual funds and lease financing companies. No
Borrower Party or any Affiliate of a Borrower Party shall be an Eligible
Assignee.
"Environmental Claims" means all claims, however asserted, by any
--------------------
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
------------------
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters, but excluding routine zoning ordinances.
8
"Equipment Financing Transaction" means any financing arrangement
-------------------------------
with any Person of equipment pursuant to a lease intended as security which
will be treated as indebtedness under GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974
-----
and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
-----------
Plan; (b) a withdrawal by Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by Company or any
ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization, in each case which would
reasonably be expected to result in a liability to Company or any of its
Subsidiaries of more than $10,000,000; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the
PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Company
or any ERISA Affiliate.
"Event of Default" means any of the events or circumstances
----------------
specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
------------
regulations promulgated thereunder.
"Existing Credit Agreement" has the meaning specified in the
-------------------------
recitals hereto.
"Existing Receivables Purchase Agreement" means the Receivables
---------------------------------------
Purchase Agreement dated as of April 28, 1999 among LSFCC, Levi Xxxxxxx
Funding Corp., Xxxxxx X.X., Receivables Capital Corporation, the financial
institutions from time to time party thereto and Citicorp North America,
Inc., as agent.
"Exposure Factor" means 125%.
---------------
"FDIC" means the Federal Deposit Insurance Corporation and any
----
Governmental Authority succeeding to any of its principal functions.
9
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards to the nearest 1/100/th/ of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding
such day; provided that (a) if such day is not a Business Day, the Federal
--------
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged
to Bank of America on such day on such transactions as determined by Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System and any Governmental Authority succeeding to any of its
principal functions.
"FinServ" means Levi Xxxxxxx & Co. Europe Financial Services,
-------
S.C.A., a Belgian corporation.
"Flood Hazard Property" means real property located in an area
---------------------
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"Foreign Pledge Agreement" means each pledge agreement or similar
------------------------
instrument governed by the laws of a country other than the United States,
executed and delivered pursuant to Section 6.11 or from time to time
thereafter in accordance with Section 6.9 by Company or any Material
Domestic Subsidiary that owns Capital Stock of one or more Foreign
Subsidiaries organized in such country, in form and substance satisfactory
to Agent, as such Foreign Pledge Agreement may thereafter be amended,
supplemented, or modified from time to time.
"Foreign Subsidiary" means any Subsidiary of Company, other than a
------------------
Domestic Subsidiary.
"Four Facility Commitment Reduction Fraction" means, as of any date
-------------------------------------------
of determination, a fraction, the numerator of which is the Aggregate
Commitment and the denominator of which is the sum of (a) the Aggregate
Commitment plus (b) the Aggregate Bridge Commitment plus (c) the Aggregate
---- ----
180 Day Commitment (as defined therein) under the Amended and Restated 1999
180 Day Credit Agreement plus (d) the Aggregate Commitment (as defined
----
therein) under the Amended and Restated 1997 364 Day Credit Agreement.
"Funded Current Liability Percentage" means "funded current
-----------------------------------
liability percentage" within the meaning of Section 412(1)(8)(B) of the
Code.
"Further Taxes" means any and all present or future taxes, levies,
--------------
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant to Section 3.1.
10
"GAAP" means generally accepted accounting principles set forth from
----
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), or in such other statements by
such other entity as may be in general use by significant segments of the
U.S. accounting profession, which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or government, any state
----------------------
or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantor" means any Material Domestic Subsidiary that executes and
---------
delivers a counterpart of the Guaranty on the Subsequent Closing Date or
from time to time thereafter pursuant to Section 6.9.
"Guaranty" means the Guaranty executed and delivered by existing
--------
Material Domestic Subsidiaries on the Subsequent Closing Date and to be
executed and delivered by additional Material Domestic Subsidiaries from
time to time thereafter in accordance with Section 6.9, substantially in
the form of Exhibit VI, as such Guaranty may thereafter be amended,
----------
supplemented, or modified from time to time.
"Guaranty Obligation" means, as to any Person, any (a) guaranty by
-------------------
such Person of Indebtedness of, or other obligation payable or performable
by, any other Person, or (b) assurance, agreement, letter of
responsibility, letter of awareness, undertaking or arrangement given by
such Person to an obligee of any other Person with respect to the payment
or performance of an obligation by, or the financial condition of, such
other Person, whether direct, indirect or contingent, including any
purchase or repurchase agreement covering such obligation or any collateral
security therefor, any agreement to provide funds (by means of loans,
capital contributions or otherwise) to such other Person, any agreement to
support the solvency or level of any balance sheet item of such other
Person or any "keep-well" or other arrangement of whatever nature given for
the purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided, however, that the
-------- -------
term Guaranty Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof,
covered by such Guaranty Obligation or, if less, the amount to which such
Guaranty Obligation is specifically limited, or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof as determined by the person in good faith.
"Indebtedness" means, as to any Person at a particular time:
------------
11
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) any direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), banker's
acceptances, bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services (other than obligations under a long term supply
contract), which purchase price is (i) due more than 90 days from the date
of incurrence of the obligation in respect thereof, or (ii) evidenced by a
note or similar written instrument, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse;
(d) without duplication, lease payment obligations under Capital
Leases or Synthetic Lease Obligations; and
(e) without duplication, all Guaranty Obligations of such Person
in respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, unless such Indebtedness
is expressly made non-recourse to such Person except for customary
exceptions acceptable to Majority Banks.
"Indemnified Liabilities" has the meaning specified in Section 10.5.
-----------------------
"Indemnified Person" has the meaning specified in Section 10.5.
------------------
"Indentures" means that certain Indenture dated as of November 6,
----------
1996 between Company and Citibank, N.A., as trustee, and that certain
Fiscal Agency Agreement dated as of November 22, 1996 between Company and
Citibank, N.A., as fiscal agent.
"Ineligible Securities" means securities which may not be
---------------------
underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. (S) 24, Seventh), as
amended.
"Insolvency Proceeding" means (a) any case, action or proceeding
---------------------
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case covered by subsections
(a) and (b) undertaken under U.S. Federal, State or foreign law, including
the Bankruptcy Code.
12
"Intellectual Property" means all patents, trademarks, tradenames,
---------------------
copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Company and its Subsidiaries
as currently conducted that are material to the condition (financial or
otherwise), business or operations of Company and its Subsidiaries, taken
as a whole.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
-----------------------
of January 31, 2000 between the respective lenders under this Agreement,
the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit
Agreement, and the Amended and Restated 1997 364 Day Credit Agreement.
"Interest Coverage Ratio" means, as of any date of determination,
-----------------------
the ratio of (a) Consolidated EBITDA for the period specified to (b)
Consolidated Interest Charges during such period.
"Interest Payment Date" means, as to any Loan other than a Base Rate
---------------------
Loan, the last day of each Interest Period applicable to such Loan and, as
to any Base Rate Loan, the last Business Day of each fiscal quarter;
provided, however, that if any Interest Period for an Offshore Rate Loan
-------- -------
exceeds three months, interest shall also be paid on last day of each
successive three-month period (commencing with the beginning of such
Interest Period) and each such day will be an Interest Payment Date.
"Interest Period" means, with respect to any Offshore Rate Loan, the
---------------
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date of such Loan, as applicable, and ending on the
date one, two, three, or six months thereafter (and if consented to by
Majority Banks in the given instance, nine months), as selected by Company
in its Notice of Conversion/Continuation;
provided that:
--------
(a) if any Interest Period pertaining to an Offshore Rate Loan
would otherwise end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Maturity Date; and
(d) unless Agent otherwise consents, there may not be more than 24
Interest Periods for Offshore Rate Loans in effect at any time under this
Agreement, the Bridge Credit Agreement, the Amended and Restated 1999 180
Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit
Agreement.
13
"Investment" means, as to any Person, any acquisition or any
----------
investment by such Person, whether by means of the purchase or other
acquisition of stock or other Securities of any other Person or by means of
a loan, creating a debt, capital contribution, guaranty or other debt or
equity participation or interest in any other Person, including any
partnership and joint venture interests in such other Person. For purposes
of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases
in the value of such Investment.
"IP Collateral" means, collectively, the Intellectual Property owned
-------------
by Company or any of its Material Domestic Subsidiaries that constitutes
Collateral under the Pledge and Security Agreement.
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Lender Derivative/FX Contract" means any Ordinary Course
-----------------------------
Derivative/FX Contract entered into by Company or FinServ and a
Derivative/FX Lender that is subject to a legally enforceable netting
agreement between Company or FinServ, as the case may be, and such
Derivative/FX Lender with respect to all Ordinary Course Derivative
FX/Contracts between such parties.
"Lender Letters of Credit" means letters of credit issued or
------------------------
outstanding under the Bridge Credit Agreement or the Amended and Restated
1999 180 Day Credit Agreement.
"Lending Office" means, with respect to any Bank, the office or
--------------
offices of the Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, below its name on
the signature pages hereto, or such other office or offices of such Bank as
it may from time to time specify to Company and Agent.
"Leverage Ratio" means, as of any date of determination, for Company
--------------
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date to (b) (i) as of the end of the first
fiscal quarter of fiscal year 2000, Consolidated EBITDA for such fiscal
quarter times 4; (ii) as of the end of the second fiscal quarter of fiscal
-----
year 2000, Consolidated EBITDA for the first two fiscal quarters of fiscal
year 2000 times 2; (iii) as of the end of the third fiscal quarter of
-----
fiscal year 2000, Consolidated EBITDA for the first three fiscal quarters
of fiscal year 2000 times 1.333; and (iv) as of the end of any fiscal
-----
quarter thereafter, Consolidated EBITDA for the four fiscal quarter period
then ended.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease, any financing lease having substantially the same economic effect as
any of the foregoing, or
14
the filing of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the UCC of any jurisdiction or any
comparable law, or the interest of the Person other than Company or any of
its Subsidiaries in connection with any Equipment Financing Transaction)
and any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease or the
interest of a purchaser of Permitted Receivables under any Permitted
Receivables Purchase Facility.
"Loan" means a loan by a Bank to Company under Section 2.1, and may
----
be an Offshore Rate Loan or a Base Rate Loan.
"Loan Documents" means this Agreement, any Notes, the fee letters
--------------
referred to in Section 2.12, the Guaranty, the Collateral Documents, and
all other instruments, documents and agreements delivered to Agent or any
Bank in connection herewith.
"LOS/DOS Business" means the ownership and operation by Company or a
----------------
Subsidiary of Company, whether directly or through joint ventures with
third parties in partnership, corporate or other form, of businesses
engaged solely in selling apparel and accessories and related products
including, without limitation, selling through retail stores, outlet
stores, telephone sales, catalog or other mail orders, and electronic
sales. LOS/DOS Business shall not include any business engaging in
manufacturing or in selling and in manufacturing.
"LSFCC" means Levi Xxxxxxx Financial Center Corporation, a
-----
California corporation, formerly Levi Xxxxxxx Credit Corp., a California
corporation.
"LSFLLC" means Levi Xxxxxxx Funding, LLC, a Delaware limited
------
liability company.
"Majority Banks" means, at any time, (a) Banks holding more than 50%
--------------
of the Aggregate Commitment, or (b) if the Commitments have been
terminated, Banks holding more than 50% of the then aggregate unpaid
principal amount of the Loans.
"Managing Agent" means each of the financial institutions party to
--------------
this Agreement which is identified as a Managing Agent in its signature
block.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation U of the Federal Reserve Board.
"Material Adverse Effect" means any set of circumstances or events
-----------------------
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise), business, assets, operations or
prospects of Company and its Subsidiaries, taken as a whole, or (c)
materially impairs or could reasonably be expected to materially impair the
ability of any Borrower Party to perform the Obligations.
15
"Material Domestic Subsidiary" means any Domestic Subsidiary that
----------------------------
is a Material Subsidiary.
"Material Foreign Subsidiary" means any Foreign Subsidiary that is a
---------------------------
Material Subsidiary.
"Material Subsidiary" means (a) any Subsidiary of Company, (i) the
-------------------
net book value of which is $5,000,000 or more or (ii) the annual gross
revenue of which is $15,000,000 or more and (b) any other Subsidiary of
Company designated by Company to be a "Material Subsidiary" for purposes of
this Agreement.
"Maturity Date" means January 31, 2002.
-------------
"Mortgage" means a security instrument (whether designated as a deed
--------
of trust or a mortgage or by any similar title) containing standard and
customary terms and provisions executed and delivered by any Borrower
Party, in such form as may be approved by Co-Agents in their sole
discretion after consultation with Company, in each case with such changes
thereto as may be recommended by Agent's local counsel based on local laws
or customary local mortgage or deed of trust practices. "Mortgages" means
---------
all such instruments, collectively.
"Multiemployer Plan" means a "multiemployer plan", within the
------------------
meaning of Section 4001(a)(3) of ERISA, to which Company or any ERISA
Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to
make, contributions.
"Negative Pledge" means a Contractual Obligation that restricts
---------------
Liens on property.
"Net Asset Disposition Proceeds" means cash payments (including cash
------------------------------
received by way of deferred payment pursuant to, or by monetization of, a
note receivable or otherwise, but only as and when so received) received
for an Asset Disposition, net of any bona fide direct costs incurred in
connection with such Asset Disposition including (a) income taxes
reasonably estimated to be actually payable within one year of the date of
such Asset Disposition as a result of any gain recognized in connection
with such Asset Disposition, (b) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness
(other than the Loans and Indebtedness under the Bridge Credit Agreement,
the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and
Restated 1997 364 Day Credit Agreement) that is secured by a Lien on the
stock or assets in question that is required to be repaid under the terms
thereof as a result of such Asset Disposition, and (c) brokers' fees and
legal fees incurred in connection with such Asset Disposition; provided,
--------
however, that the first $50,000,000 of proceeds from the Pending IceHouse
-------
Disposition shall not constitute Net Asset Disposition Proceeds.
"Net Equipment Financing Proceeds" means any cash proceeds received
--------------------------------
in connection with an Equipment Financing Transaction, net of (a) all
reasonable costs payable to Persons not Affiliates of Company in connection
with such Equipment
16
Financing Transaction and (b) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans and Indebtedness under the Bridge Credit Agreement, the
Amended and Restated 1999 180 Day Credit Agreement, and the Amended and
Restated 1997 364 Day Credit Agreement) that is secured by a Lien on the
equipment in question that is required to be repaid under the terms thereof
as a result of such Equipment Financing Transaction.
"Net Insurance Proceeds" means any cash payments or proceeds
----------------------
received by Company or any of its Subsidiaries with respect to Collateral
under (a) any business interruption policy in respect of a covered loss
thereunder, or (b) under any property insurance policy in respect of a
covered loss thereunder, in each case, net of any actual and reasonable
documented costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or
such Subsidiary in respect thereof.
"Net Real Estate Financing Proceeds" means any cash proceeds
----------------------------------
received in connection with a Real Estate Financing Transaction, net of all
reasonable costs payable to Persons not Affiliates of Company in connection
with such Real Estate Financing Transaction.
"Net Securities Proceeds" means (a) the cash proceeds (net of
-----------------------
underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and
expenses) from the issuance of Securities of Company or any of its
Subsidiaries, or (b) any cash capital contribution to Company.
"Notes" has the meaning specified in Section 2.2.
-----
"Notice of Conversion/Continuation" means a notice, signed by
---------------------------------
Company, and given to Agent pursuant to Section 2.4, in substantially the
form of Exhibit I.
---------
"Obligations" means all advances to, and debts, liabilities,
-----------
obligations, covenants and duties of, any Borrower Party arising under any
Loan Document, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest that accrues after the
commencement of any proceeding under any Debtor Relief Laws by or against
any Borrower Party or any Subsidiary or Affiliate of any Borrower Party.
"Offshore Currency" [Intentionally Omitted]
-----------------
"Offshore Currency Loan" [Intentionally Omitted]
----------------------
"Offshore Rate" means for any Interest Period with respect to any
-------------
Offshore Rate Loan, a rate per annum determined by Agent pursuant to the
following formula:
Offshore Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
17
Where,
"Offshore Base Rate" means, for such Interest Period:
------------------
(a) the rate per annum equal to the rate determined by Agent to be
the offered rate that appears on the page of the Telerate Screen that
displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(b) in the event that the rate referenced in the preceding
subsection (a) does not appear on such page or service or such page or
service shall cease to be available, the rate per annum equal to the rate
determined by Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) in the event that the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum determined by
Agent as the rate of interest at which Dollar deposits (for delivery on the
first day of such Interest Period) in same day funds in the approximate
amount of the applicable Offshore Rate Loan and with a term equivalent to
such Interest Period would be offered by Bank of America's London Branch to
major banks in the offshore Dollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any
-----------------------------
Interest Period, the reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day, whether or not
applicable to any Bank, under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The Offshore Rate
for each outstanding Offshore Rate Loan shall be adjusted automatically as
of the effective date of any change in the Eurodollar Reserve Percentage.
The determination of the Eurodollar Reserve Percentage and the Offshore
Base Rate by Agent shall be conclusive in the absence of manifest error.
"Offshore Rate Loan" means a Loan that bears interest based on the Offshore
------------------
Rate.
18
"Operating Lease" means, as applied to any Person, any lease
---------------
(including leases that may be terminated by the lessee at any time) of any
Property that is not a Capital Lease, other than any such lease under which
that Person is the lessor.
"Ordinary Course Derivative/FX Contracts" means any and all interest
---------------------------------------
rate swaps, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity
contracts, interest rate options, forward foreign exchange transactions,
cap transactions, floor transactions, collar transactions, currency swaps,
cross-currency rate swaps, currency options, spot contracts or any other
similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, in each case
that are (or were) entered into by any Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or
reasonably anticipated by such Person, or changes in the value of
securities issued by such Person and not for purposes of speculation or
taking a "market view" and that do not contain any provision ("walk-away"
provision) exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party.
"Organization Documents" means, (a) with respect to any corporation,
----------------------
the certificate or articles of incorporation and the bylaws; (b) with
respect to any limited liability company, the articles of formation and
operating agreement; and (c) with respect to any partnership, joint
venture, trust or other form of business entity, the partnership or joint
venture agreement and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation with the secretary
of state or other department in the state of its formation, in each case as
amended from time to time.
"Originator" has the meaning specified in Section 10.8(d).
----------
"Other Taxes" means any present or future stamp, court or
-----------
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"Overnight Rate" [Intentionally Omitted]
--------------
"Participant" has the meaning specified in Section 10.8(d).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Pending IceHouse Disposition" means the proposed sale of the
----------------------------
property located at 000 Xxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which Company or any ERISA Affiliate
sponsors, maintains, or to which it makes, is making, or is obligated to
make contributions, or in the
19
case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five
plan years.
"Permitted Receivables" means all obligations of any obligor
---------------------
(whether now existing or hereafter arising) under a contract for sale of
goods or services by Company or any of its Subsidiaries, which includes any
obligation of such obligor (whether now existing or hereafter arising) to
pay interest, finance charges or amounts with respect thereto, and, with
respect to any of the foregoing receivables or obligations, (a) all of the
interest of Company or any of its Subsidiaries in the goods (including
returned goods) the sale of which gave rise to such receivable or
obligation after the passage of title thereto to any obligor, (b) all other
Liens and property subject thereto from time to time purporting to secure
payment of such receivables or obligations, (c) all guaranties, insurance,
letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
receivables or obligations, (d) all books and records relating to the
foregoing, lockbox accounts containing primarily proceeds of the foregoing,
and other similar related assets customarily transferred (or in which
security interests are customarily granted) to purchasers in receivables
purchase transactions that are treated as sales under GAAP, (e) all rights
of Foreign Subsidiaries to refunds on account of value added tax in respect
of goods sold to an obligor, any receivable from whom is or becomes a
defaulted receivable, and (f) proceeds of or judgments relating to any of
the foregoing, any debts represented thereby and all rights of action
against any Person in connection therewith.
"Permitted Receivables Purchase Facility" means any agreement of
---------------------------------------
Company or any of its Subsidiaries providing for sales, transfers or
conveyances of, or granting of security interests in, Permitted Receivables
that do not provide, directly or indirectly, for recourse against the
seller of such Permitted Receivables (or against any of such seller's
Affiliates) by way of a guaranty or any other support arrangement, with
respect to the amount of such Permitted Receivables (based on the financial
condition or circumstances of the obligor thereunder), other than such
limited recourse as is reasonable given market standards for receivables
purchase transactions that are treated as sales under GAAP, taking into
account such factors as historical bad debt loss experience and obligor
concentration levels.
"Permitted Transferees" has the meaning specified in the
---------------------
Stockholders Agreement dated as of April 15, 1996 between Company and the
stockholders of Company party thereto as in effect as of the Closing Date,
except that transferees pursuant to Section 2.2(a)(A) thereof shall not be
deemed to be Permitted Transferees for purposes of this Agreement.
"Person" means an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which Company or any of its Subsidiaries sponsors or maintains or to
which Company or
20
any of its Subsidiaries makes, is making, or is obligated to make
contributions and includes any Pension Plan.
"Pledge and Security Agreement" means the Pledge and Security
-----------------------------
Agreement executed and delivered by Company on the Closing Date and
existing Material Domestic Subsidiaries on the Subsequent Closing Date and
to be executed and delivered by additional Material Domestic Subsidiaries
from time to time thereafter in accordance with Section 6.9, substantially
in the form of Exhibit V, as such Pledge and Security Agreement may
---------
thereafter be amended, supplemented, or modified from time to time.
"Pledged Collateral" means the "Pledged Collateral" as defined in
------------------
the Pledge and Security Agreement.
"Pledged Foreign Subsidiary" means a Foreign Subsidiary no more than
--------------------------
65% of the Capital Stock of which is pledged to Collateral Agent.
"Principal Property" means any contiguous or proximate parcel of
------------------
real property owned by, or leased to, Company or any of its Restricted
Subsidiaries, and any equipment located at or comprising a part of any such
property, having a gross book value (without deduction of any depreciation
reserves), as of the date of determination, in excess of 1% of Consolidated
Net Tangible Assets; provided, however, that in the event that the
-------- -------
Indentures, or the limitations regarding Liens granted by Company or
Restricted Subsidiaries contained in the Indentures, are no longer binding
on Company, no Property shall be a Principal Property.
"Professional Costs" means and includes all reasonable fees and
------------------
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all disbursements of internal counsel and
the reasonable fees and costs of financial advisors, accountants,
appraisers, consultants, etc.
"Property" means any estate or interest in any kind of property or
--------
asset, whether real, personal or mixed, and whether tangible or intangible.
"Real Estate Financing Transaction" means any arrangement with any
---------------------------------
Person pursuant to which Company or any of its Subsidiaries incurs
Indebtedness secured by a Lien on real property of Company or any of its
Subsidiaries and related personal property.
"Receivables Purchase Facility" means any agreement providing for
-----------------------------
sales, transfers or conveyances of, or granting of security interests in,
accounts receivable that do not provide, directly or indirectly, for
recourse against the seller of such accounts receivable (or against any of
such seller's Affiliates) by way of a guaranty or any other support
arrangement, with respect to the amount of such accounts receivable (based
on the financial condition or circumstances of the obligor thereunder),
other than such limited recourse as is reasonable given market standards
for receivables purchase transactions that are treated as sales under GAAP,
taking into account such factors as historical bad debt loss experience and
obligor concentration levels.
21
"Receivables Transfer Agreements" means that certain Receivables
-------------------------------
Purchase and Sale Agreement dated as of January 28, 2000 among Company,
LSFCC, Levi Xxxxxxx Funding Corp. and LSFLLC and that certain Third Amended
and Fully Restated Receivables Purchase and Sale Agreement between LSFCC
and Company effective January 28, 2000.
"Released Matters" has the meaning specified in Section 11.1.
----------------
"Releasees" has the meaning specified in Section 11.1.
---------
"Releasors" has the meaning specified in Section 11.1.
---------
"Replacement Bank" means an Eligible Assignee satisfactory to
----------------
Company which acquires and assumes all or a ratable part of all of a Bank's
Loans and Commitment pursuant to Section 3.8. Each designation of a
Replacement Bank shall be subject to the prior written consent of Agent
(which consent shall not be unreasonably withheld).
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Requisite Banks" means, at any time, (a) Banks holding more than
---------------
90% of the Aggregate Commitment, or (b) if the Commitments have been
terminated, Banks holding more than 90% of the then aggregate unpaid
principal amount of the Loans.
"Responsible Officer" of Company means the chief executive officer,
-------------------
the president, the chief financial officer, or the treasurer of Company, or
any other officer having substantially the same authority and
responsibility.
"Restatement Date" [Intentionally Omitted]
----------------
"Restricted Payment" means:
------------------
(a) the declaration or payment of any dividend or other
distribution by Company or any of its Subsidiaries, directly or indirectly,
either in cash or property, on any shares of the Capital Stock of any class
of Company or any of its Subsidiaries (except dividends or other
distributions payable solely in shares of Capital Stock of Company or any
of its Subsidiaries or payable by any Subsidiary to Company or to a wholly-
owned Subsidiary of Company);
(b) the purchase, redemption or retirement by Company or any of
its Subsidiaries of any shares of its Capital Stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
Capital Stock, whether directly or
22
indirectly (except the purchase, redemption or retirement of Capital Stock
(or any such warrants, rights or options) held by Company or any wholly-
owned Subsidiary of Company); and
(c) the prepayment, repayment, redemption, defeasance or other
acquisition or retirement for value prior to any scheduled maturity,
scheduled repayment or scheduled sinking fund payment, of any Indebtedness
not otherwise permitted under any Loan Document to be so paid.
"Restricted Subsidiary" means any Subsidiary of Company which owns
---------------------
or leases a Principal Property; provided, however, that in the event that
-------- -------
the Indentures, or the limitations regarding Liens granted by or on the
Capital Stock or Indebtedness of Restricted Subsidiaries contained in the
Indentures, are no longer binding on Company, no Subsidiary of Company
shall be a Restricted Subsidiary.
"SEC" means the Securities and Exchange Commission, or any successor
---
thereto.
"Securities" means any stock, shares, partnership interests, voting
----------
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"Senior Managing Agent" means each of the financial institutions
---------------------
party to this Agreement which is identified as a Senior Managing Agent in
its signature block.
"Solvent" means, with respect to any Person, that as of the date of
-------
determination both (a)(i) the then fair saleable value of the property of
such Person is (A) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (B) not less than the amount
that will be required to pay the probable liabilities on such Person's then
existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (b) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become
an actual or matured liability.
"Subsequent Closing Date" means the date on which all conditions
-----------------------
precedent set forth in Section 4.2 are satisfied or waived by all Banks.
23
"Subsidiary" of a Person means a corporation, partnership, joint
----------
venture, limited liability company or other business entity of which a
majority of the shares of Securities or other interests having ordinary
voting power for the election of directors or other governing body (other
than Securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person.
"Synthetic Lease Obligations" means all monetary obligations of a
---------------------------
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be
characterized as the Indebtedness of such Person (without regard to
accounting treatment).
"Taxes" means any and all present or future taxes, levies,
-----
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case
of each Bank and Agent, respectively, taxes imposed on or measured by its
net income by the jurisdiction (or any political subdivision thereof) under
the laws of which such Bank or Agent, as the case may be, is organized or
maintains a lending office.
"Termination Value" means, in respect of any Derivative/FX Contract,
-----------------
after taking into account the effect of any legally enforceable netting
agreement relating to such Derivative/FX Contract, the termination value,
expressed in Dollars, as determined by Company; provided, however, that in
-------- -------
the event that two Banks determine that the xxxx-to-market value, expressed
in Dollars, for any Derivative/FX Contract, as determined based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Derivative/FX Contract, is greater than the
termination value for such Derivative/FX Contract determined by Company,
the Termination Value of such Derivative/FX Contract shall be the amount
determined by such Banks.
"Three Facility Commitment Reduction Fraction" means, as of any date
--------------------------------------------
of determination, a fraction, the numerator of which is the Aggregate
Commitment and the denominator of which is the sum of (a) the Aggregate
Commitment plus (b) the Aggregate 180 Day Commitment (as defined therein)
----
under the Amended and Restated 1999 180 Day Credit Agreement plus (c) the
----
Aggregate Commitment (as defined therein) under the Amended and Restated
1997 364 Day Credit Agreement.
"Two Facility Commitment Reduction Fraction" means, as of any date
------------------------------------------
of determination, a fraction, the numerator of which is the Aggregate
Commitment and the denominator of which is the sum of (a) the Aggregate
Commitment plus (b) the Aggregate Commitment (as defined therein) under the
----
Amended and Restated 1997 364 Day Credit Agreement.
24
"UCC" means the Uniform Commercial Code (or any similar or
---
equivalent legislation) as in effect in any applicable jurisdiction.
"United States" and "U.S." each means the United States of America.
------------- ----
"Unpledged Foreign Subsidiaries" means Foreign Subsidiaries none of
------------------------------
the Capital Stock of which is pledged to Collateral Agent.
"Voting Trust Agreement" means the Voting Trust Agreement entered
----------------------
into as of April 15, 1996 by and among Xxxxxx X. Xxxx; Xxxxx X. Xxxx, Xx.;
Xxxxx X. Xxxx, Xx.; and F. Xxxxxx Xxxxxxx as the Voting Trustees and the
stockholders of LSAI Holding Corp. who are parties thereto.
"Voting Trustees" means the persons entitled to act as voting
---------------
trustees under the Voting Trust Agreement.
1.2 Other Interpretive Provisions.
-----------------------------
(a) Defined Terms. Except as provided in Section 1.1, unless
-------------
otherwise specified herein or therein, all terms defined in this Agreement shall
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto. The meaning of defined terms shall be equally
applicable to the singular and plural forms of the defined terms. Terms
(including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC of California shall have the meanings therein described.
(b) The Agreement. The words "hereof", "herein", "hereunder" and
-------------
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
section and exhibit references are to this Agreement unless otherwise specified.
(c) Certain Common Terms.
--------------------
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Whenever any performance obligation
-----------------
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including". If any
provision of this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.
25
(e) Contracts. Unless otherwise expressly provided herein,
---------
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be
----
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(g) Captions. The captions and headings of this Agreement are
--------
for convenience of reference only and shall not affect the construction of this
Agreement.
(h) Independence of Provisions. The parties acknowledge that this
--------------------------
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
1.3 Accounting Principles.
---------------------
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed in accordance with GAAP,
consistently applied; except that, subject to Section 10.16, all financial
computations required under this Agreement shall be made in accordance with GAAP
as in effect on the Closing Date.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of Company. The fiscal quarters of Company end on the
last Sunday in February, May, August, and November of each year. Each fiscal
year of Company ends on the last Sunday in November of such year.
(c) References herein to "consolidated" and "consolidated basis"
with reference to Company are to Company and its Subsidiaries on a consolidated
basis.
26
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms of Commitments; the Credit. Each Bank severally
--------------------------------------------
agrees, on the terms and conditions set forth herein, that all loans outstanding
on the Closing Date under the Existing Credit Agreement shall be deemed to be
Loans hereunder on the Closing Date and each Bank shall be deemed to have made a
Loan to Company in an amount equal to the product of the aggregate principal
amount of such outstanding loans times the percentage set forth opposite such
-----
Bank's name on Schedule 2.1 under the heading "Commitment Percentage" (such
------------
amount, as the same may be reduced pursuant to the terms of this Agreement or as
a result of one or more assignments under Section 10.8, the Bank's
"Commitment").
----------
2.2 Notes; Loan Accounts.
--------------------
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business. The loan accounts or records maintained by Agent and each Bank shall
be conclusive evidence, absent manifest error, of the amount of the Loans made
by Banks to Company and the interest and payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of Company hereunder to pay any amount owing with respect to the
Loans.
(b) Upon the request of any Bank made through Agent, the Loans
made by such Bank may be evidenced by one or more notes, as applicable
("Notes"), instead of or in addition to loan accounts. Each such Note shall be
in the form of Exhibit II. Each such Bank shall endorse on the schedules annexed
----------
to its Note the date, amount, and maturity of each Loan made by it and the
amount of each payment of principal made by Company with respect thereto. Each
such Bank is irrevocably authorized by Company to endorse its Note and each
Bank's record shall be conclusive absent manifest error; provided, however, that
-------- -------
the failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of
Company hereunder or under any such Note to such Bank.
2.3 Procedure for Committed Borrowing. [Intentionally Omitted]
---------------------------------
2.4 Conversion and Continuation Elections.
-------------------------------------
(a) Company may upon irrevocable notice to Agent in accordance
with Section 2.4(b):
(i) elect to convert on any Business Day, any Base Rate
Loans (or any part thereof in an amount not less than $10,000,000 or that
is in an integral multiple of $1,000,000 in excess thereof) into Offshore
Rate Loans; or
(ii) elect to convert on any Interest Payment Date any
Offshore Rate Loans maturing on such Interest Payment Date (or any part
thereof in an amount not less than $10,000,000 or that is in an integral
multiple of $1,000,000 in excess thereof) into Base Rate Loans; or
27
(iii) elect to renew on any Interest Payment Date any
Offshore Rate Loans maturing on such Interest Payment Date (or any part
thereof in an amount not less than $10,000,000 or that is in an integral
multiple of $1,000,000 in excess thereof);
provided that if the Aggregate Commitment shall have been reduced to less than
--------
$10,000,000, on and after such reduction the right of Company to elect to
continue such Loans as, and convert such Loans into, Offshore Rate Loans shall
terminate.
(b) Company shall deliver in writing (or by facsimile transmission
confirmed immediately by a telephone call or by a telephone call confirmed
immediately by a facsimile transmission), an irrevocable Notice of
Conversion/Continuation to be received by Agent not later than 9:00 a.m., San
Francisco, California time, at least three Business Days in advance of the
Conversion/Continuation Date, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the nature of the proposed conversion or continuation;
and
(iv) with respect to Offshore Rate Loans, the duration of
the requested Interest Period.
(c) (i) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans, Company has failed to select a new
Interest Period to be applicable to such Offshore Rate Loans, and if no
Event of Default shall then exist, Company shall be deemed to have elected
to continue such Offshore Rate Loans as Offshore Rate Loans with an
Interest Period of one month.
(ii) If an Event of Default exists at the time any Interest
Period applicable to Offshore Rate Loans expires, Company shall be deemed
to have elected to convert Offshore Rate Loans into Base Rate Loans
effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation (or
telephonic notice in lieu thereof), Agent will promptly notify each Bank
thereof, or, if no timely notice is provided, Agent will promptly notify each
Bank of the details of any automatic conversion. All conversions and
continuations shall be made pro rata according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given or
which are subject to automatic conversion held by each Bank.
28
2.5 Utilization of Aggregate Commitment in Offshore Currencies.
----------------------------------------------------------
[Intentionally Omitted]
2.6 Bid Borrowings. [Intentionally Omitted]
--------------
2.7 Procedure for Bid Borrowing. [Intentionally Omitted]
---------------------------
2.8 Voluntary Prepayments.
---------------------
(a) Subject to Section 3.4, Company may (from time to time)
ratably prepay Loans in whole or in part in the minimum amount of $10,000,000 or
any integral multiple of $1,000,000 in excess thereof, upon notice to Agent
given not later than 9:00 a.m. San Francisco, California time:
(i) at least three Business Days' prior to the proposed
date of prepayment for Offshore Rate Loans; and
(ii) on the Business Day prior to the proposed date of
prepayment for Base Rate Loans.
Each such notice of prepayment shall specify the date and amount of such
prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate
Loans, or any combination thereof. In the event that Company fails to so
specify, any voluntary prepayments of the Loans pursuant to this Section 2.8
shall be applied first to Base Rate Loans to the full amount thereof before
application to Offshore Rate Loans. Such notice shall not thereafter be
revocable by Company and Agent will promptly notify each Bank thereof and the
amount of such Bank's Commitment Percentage of such prepayment. If such notice
is given by Company, Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest to each such date on the amount prepaid and the
amounts required pursuant to Section 3.4. Amounts prepaid may not be reborrowed.
(b) Notice to Agent under this Section shall be in writing, signed
by Company or may be by telephone notice promptly confirmed by notice sent by
facsimile transmission.
2.9 Mandatory Prepayments and Reductions of Aggregate Commitment. The
------------------------------------------------------------
Loans shall be prepaid and the Aggregate Commitment shall be permanently reduced
in the amounts and under the circumstances set forth below, all such payments to
be applied as set forth below or as more specifically provided in Section
2.9(j). Each prepayment required under this Section shall be subject to Section
3.4.
(a) Permitted Receivables Purchase Facility. No later than five
---------------------------------------
Business Days following the receipt by Company or any of its Subsidiaries of any
proceeds in respect of a Permitted Receivables Purchase Facility, Company shall
prepay the Loans and the Aggregate Commitment shall be permanently reduced in an
aggregate amount equal to the product of the net proceeds received by Company or
any of its Subsidiaries from such Permitted Receivables Purchase Facility times
-----
the Two Facility Commitment Reduction Fraction.
29
(b) Equipment Financing Transactions. No later than (i) five
--------------------------------
Business Days following the receipt by Company or any of its Subsidiaries of any
Net Equipment Financing Proceeds in respect of any equipment not constituting
Collateral and (ii) the date of receipt by Company or any of its Subsidiaries of
any other Net Equipment Financing Proceeds, Company shall prepay the Loans and
the Aggregate Commitment shall be permanently reduced in an aggregate amount
equal to the product of such Net Equipment Financing Proceeds times the Three
-----
Facility Commitment Reduction Fraction.
(c) Real Estate Financing Transactions. No later than (i) five
----------------------------------
Business Days following the receipt by Company or any of its Subsidiaries of any
Net Real Estate Financing Proceeds in respect of any real property not
constituting Collateral and (ii) the date of receipt by Company or any of its
Subsidiaries of any other Net Real Estate Financing Proceeds, Company shall
prepay the Loans and the Aggregate Commitment shall be permanently reduced in an
aggregate amount equal to the product of such Net Real Estate Financing Proceeds
times the Three Facility Commitment Reduction Fraction.
-----
(d) Asset Dispositions. No later than (i) five Business Days
------------------
following the receipt by Company or any of its Subsidiaries of any Net Asset
Disposition Proceeds in respect to Asset Dispositions not involving Collateral
and (ii) the date of receipt by Company or any of its Subsidiaries of any Net
Asset Disposition Proceeds from the Pending IceHouse Disposition in excess of
$50,000,000 or any other Net Asset Disposition Proceeds, Company shall prepay
the Loans and the Aggregate Commitment shall be permanently reduced in an
aggregate amount equal to the product of such Net Asset Disposition Proceeds
times the Four Facility Commitment Reduction Fraction.
-----
(e) Insurance. No later than two Business Days following the
---------
receipt by Company or any of its Subsidiaries of any Net Insurance Proceeds that
are required to be applied to prepay the Loans and reduce the Aggregate
Commitment pursuant to Section 6.6, Company shall prepay the Loans and the
Aggregate Commitment shall be permanently reduced in an aggregate amount equal
to the product of such Net Insurance Proceeds times the Four Facility Commitment
-----
Reduction Fraction.
(f) Excess Cash Flow. In the event that there shall be
----------------
Consolidated Excess Cash Flow for fiscal year 2000, Company shall, no later than
60 days after the end of such fiscal year, prepay the Loans and the Aggregate
Commitment shall be permanently reduced in an aggregate amount equal to (i) 60%
of such Consolidated Excess Cash Flow minus voluntary commitment reductions
-----
under this Agreement, the Bridge Credit Agreement, the Amended and Restated 1999
180 Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit
Agreement made during such fiscal year times (ii) the Four Facility Commitment
-----
Reduction Fraction.
(g) Tax Refunds. No later than five Business Days following the
-----------
receipt by Company or any of its Subsidiaries of any proceeds in respect of any
federal tax refunds in respect of the 1999 fiscal year in excess of $70,000,000
in the aggregate, Company shall prepay the Loans and the Aggregate Commitment
shall be permanently reduced in an aggregate amount equal to the product of the
excess proceeds received times the Four Facility Commitment Reduction Fraction.
-----
30
(h) Capital Markets Transactions. No later than two Business Days
----------------------------
following the receipt by Company or any of its Subsidiaries of any Net
Securities Proceeds, Company shall prepay the Loans and the Aggregate Commitment
shall be permanently reduced in an aggregate amount equal to the product of such
Net Securities Proceeds times (i) until Net Securities Proceeds in an amount
-----
equal to $300,000,000 in the aggregate have been applied to reduce the Aggregate
Bridge Commitment, zero (0)% and (ii) thereafter, the Four Facility Commitment
Reduction Fraction.
(i) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with any
-----------------------------------------------
prepayment of the Loans pursuant to this Section 2.9, Company shall deliver to
Agent an officer's certificate demonstrating the calculation of the amount of
the applicable proceeds or Consolidated Excess Cash Flow, as the case may be,
that gave rise to such prepayment. In the event that Company shall subsequently
determine that the actual amount was greater than the amount set forth in such
officer's certificate, Company shall promptly make an additional prepayment of
the Loans (and the Aggregate Commitment shall be permanently reduced in
accordance with the applicable subsection of this Section 2.9) in an amount
equal to the amount of such excess, and Company shall concurrently therewith
deliver to Agent an officer's certificate demonstrating the derivation of the
additional amount resulting in such excess.
(j) Application of Prepayments. Any mandatory prepayments of the
--------------------------
Loans pursuant to this Section 2.9 shall be applied first to Base Rate Loans to
the full extent thereof before application to Offshore Rate Loans and shall be
in addition to, and shall not be applied to reduce, the scheduled Commitment
reductions set forth in Section 2.10.
2.10 Repayment; Scheduled Reductions of Aggregate Commitment. Company
-------------------------------------------------------
shall make principal payments on the Loans in installments on the dates set
forth below, and the Commitments shall be permanently reduced on the dates set
forth below, in an amount equal to the product of the correlative amount
indicated times the Three Facility Commitment Reduction Fraction:
-----
Date Scheduled Reduction
---- -------------------
May 25, 2000 $ 50,000,000
August 24, 2000 $ 50,000,000
November 22, 2000 $ 100,000,000
February 22, 2001 $ 50,000,000
May 24, 2001 $ 50,000,000
August 23, 2001 $ 100,000,000
; provided, however, that Company shall repay the principal amount of the
outstanding Loans on the Maturity Date.
31
2.11 Interest.
--------
(a) Subject to Section 2.11(d), each Loan shall bear interest on
the outstanding principal amount thereof (before and after default, before and
after maturity, before and after judgment, and before and after the commencement
of any proceeding under any Debtor Relief Laws) from the Closing Date until it
becomes due at a rate per annum equal to the Offshore Rate or the Base Rate, as
the case may be, plus the Applicable Margin (the "Applicable Margin"). The
---- -----------------
initial Applicable Margin, subject to adjustment as provided below, shall be a
rate per annum equal to 3.25% for Offshore Rate Loans and 2.00% for Base Rate
Loans. If Company has not completed (after the date hereof) one or more Capital
Markets Transactions and applied at least $300,000,000 of Net Securities
Proceeds therefrom in the aggregate to reduce the Aggregate Bridge Commitment on
or prior to January 31, 2001, then effective February 1, 2001, the Applicable
Margin shall increase to 4.25% for Offshore Rate Loans and 3.00% for Base Rate
Loans. In addition, the Applicable Margin shall increase by an additional 0.25%
at the beginning of each subsequent three-month period, commencing May 1, 2001,
unless and until Company shall have completed (after the date hereof) one or
more Capital Markets Transactions and applied at least $300,000,000 of Net
Securities Proceeds therefrom in the aggregate to reduce the Aggregate Bridge
Commitment.
(b) Interest on each Loan shall be payable in arrears on each
Interest Payment Date. Interest shall also be payable on the date of any
prepayment of Loans pursuant to Section 2.8, 2.9 or 2.10 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during any period when principal of the Loans is due and payable, interest shall
be payable on request for such payment by the holders of the Loans.
(c) While any Event of Default exists, Company shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law and including post-petition interest in any proceeding under any Debtor
Relief Law) on the principal amount of all Loans, at a rate per annum equal to
the Default Rate. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be payable upon demand.
(d) Anything herein to the contrary notwithstanding, the
obligations of Company to any Bank hereunder shall be subject to the limitation
that payments of interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by such Bank would be contrary to the
provisions of any law applicable to such Bank limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such Bank,
and in such event Company shall pay such Bank interest at the lower of (i) the
highest rate permitted by applicable law and (ii) the rates required by this
Agreement.
2.12 Fees. In addition to fees due under other provisions of this
----
Agreement:
(a) Facility Fee. Company shall pay to Agent for the account of
------------
each Bank pro rata according to its Commitment Percentage, a facility fee equal
to 0.50% times the actual daily amount of its Commitment. The facility fee shall
-----
accrue at all times from the Closing Date until the Maturity Date, shall be
computed on a daily basis, and shall be payable in arrears (i) on
32
the fifth Business Day after the last day of each fiscal quarter, commencing on
the first such day after the Closing Date and (ii) on the Maturity Date.
(b) Amendment Fee. On the Closing Date, Company shall pay to Agent
-------------
for the account of each Bank that approves the execution of this Agreement pro
rata according to its Commitment Percentage, an amendment fee in an amount equal
to 0.50% times the Aggregate Commitment. If Company has not completed (after the
-----
date hereof) one or more Capital Markets Transactions and applied at least
$300,000,000 of Net Securities Proceeds therefrom in the aggregate to reduce the
Aggregate Bridge Commitment on or prior to January 31, 2001, on February 1,
2001, Company shall pay to Agent for the account of each Bank pro rata according
to its Commitment Percentage, an additional amendment fee in an amount equal to
2.00% times the Aggregate Commitment.
-----
(c) Agency Fee. Company shall pay to Agent an agency fee in such
----------
amounts and at such times as set forth in a separate fee letter agreement
between Company and Agent. The agency fee is for services to be performed by
Agent acting as Agent and is fully earned on the date paid. The agency fee paid
to Agent is solely for its account and is nonrefundable.
(d) Collateral Agency Fee. Company shall pay to Collateral Agent a
---------------------
collateral agency fee in such amounts and at such times as set forth in a
separate fee letter agreement between Company and Collateral Agent. The
collateral agency fee is for services to be performed by Collateral Agent acting
as Collateral Agent and is fully earned on the date paid. The collateral agency
fee paid to Collateral Agent is solely for its accounts and is nonrefundable.
(e) Other Fees. Company shall pay Agent for its own account
----------
and/or the account of each Co-Agent such fees in such amounts and at such times
as set forth in separate fee letter agreements between Company and Agent.
2.13 Computation of Fees and Interest.
--------------------------------
(a) All computations of interest for Base Rate Loans when the Base
Rate is determined by Bank of America's "prime rate" shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Agent will notify Company and Banks of each determination of
an Offshore Rate. Any failure by Agent to give such notice and any failure by
Company and any Bank to receive such notice shall not relieve Company of any
obligation to pay interest or provide the basis for any claim against Agent.
Agent shall, upon request made by Company or any Bank from time to time, advise
such Person(s) of the relevant applicable Offshore Rate(s).
(c) Each determination of an interest rate by Agent pursuant to
any provision of this Agreement shall be conclusive and binding on Company and
Banks in the absence of manifest error.
33
2.14 Payments by the Company.
-----------------------
(a) All payments (including prepayments) to be made by the Company
on account of principal, interest, fees and other amounts required hereunder
shall be made without set-off or counterclaim and shall, except as otherwise
expressly provided herein, be made to the Agent for the ratable account of the
Banks and Designated Bidders at the Agent's Payment Office, and, with respect to
principal of, interest on, and any other amounts relating to, any Offshore
Currency Loan, shall be made in the Offshore Currency in which such Loan is
denominated or payable, and, with respect to all other amounts payable
hereunder, shall be made in Dollars. Such payments shall be made in immediately
available funds and (i) in the case of Offshore Currency payments, no later than
such time on the dates specified herein as may be determined by the Agent to be
necessary for such payment to be credited on such date in accordance with normal
banking procedures in the place of payment, and (ii) in the case of any Dollar
payments no later than 11:00 a.m., San Francisco, California time, on the date
specified herein. The Agent will promptly distribute to each Bank or Designated
Bidder the amount of its Commitment Percentage (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts,
in like funds as received. Any payment which is received by the Agent later than
11:00 a.m., San Francisco, California time, or later than the time specified by
the Agent as provided in clause (i) above in the case of Offshore Currency
payments shall be deemed to have been received on the immediately succeeding
Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be, subject to the provisions
set forth in the definition of "Interest Period" herein.
(c) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Banks or Designated Bidder
hereunder from the Company that the Company will not make such payment in full,
the Agent may assume that the Company has made such payment in full to the Agent
on such date and the Agent may (but shall not be so required), in reliance upon
such assumption, cause to be distributed to each Bank or Designated Bidder on
such due date an amount equal to the amount then due such Bank or Designated
Bidder. If and to the extent the Company shall not have made such payment in
full to the Agent, each Bank or Designated Bidder shall repay to the Agent, on
request made by the Agent, such amount distributed to such Bank or Designated
Bidder, together with interest thereon for each day from the date such amount is
distributed to such Bank or Designated Bidder until the date such Bank or
Designated Bidder repays such amount to the Agent, at the Federal Funds Rate as
in effect for each such day with respect to amounts denominated in Dollars and
at the Overnight Rate with respect to amounts denominated in an Offshore
Currency.
2.15 Payments by the Banks to the Agent.
----------------------------------
(a) Unless the Agent shall have received notice from a Bank on the
Restatement Date or, with respect to each Borrowing after the Restatement Date,
at least one Business Day prior to the date of any proposed Committed Borrowing
(but prior to 10:00 a.m. San Francisco, California time on the same day with
respect to a Borrowing consisting of Base
34
Rate Committed Loans) that such Bank will not make available to the Agent for
the account of the Company the amount of that Bank's Commitment Percentage of
the Committed Borrowing, the Agent may assume that each Bank has made such
amount available to the Agent on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank shall
not have made its full amount available to the Agent and the Agent in such
circumstances has made available to the Company such amount, that Bank shall on
the next Business Day following such Borrowing Date make such amount available
to the Agent, together with interest at the Federal Funds Rate for and
determined as of each day during such period, or in the case of any Borrowing
consisting of Offshore Currency Loans, the Overnight Rate.
A certificate of the Agent submitted to any Bank with respect to amounts owing
under this subsection shall be conclusive, absent manifest error. If such amount
is so made available, such payment to the Agent shall constitute such Bank's
Committed Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to the Agent on the next Business Day
following such Borrowing Date, the Agent shall notify the Company of such
failure to fund and, upon request for payment made by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the
Committed Loans comprising such Committed Borrowing.
(b) The failure of any Bank to make any Committed Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Committed Loan on such Borrowing Date, but no Bank shall be responsible
for the failure of any other Bank to make the Loan to be made by such other Bank
on any Borrowing Date.
2.16 Sharing of Payments, etc. If, other than as expressly contemplated
-------------------------
elsewhere herein, any Bank shall obtain on account of the Committed Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in an amount in excess of its Commitment
Percentage of payments on account of the Committed Loans obtained by all the
Banks, such Bank shall forthwith (a) notify the Agent of such fact, and (b)
purchase from the other Banks such participations in the Committed Loans made by
them as shall be necessary to cause such purchasing Bank 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 the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's Commitment Percentage (according to the proportion
of (i) the amount of such paying Bank's required repayment to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Company agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off but
subject to Section 10.11) with respect to such participation as fully as if such
Bank were the direct creditor of the Company in the amount of such
participation. The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error), of participations purchased pursuant
to this Section and will in each case notify the Banks following any such
purchases and repayments.
35
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
-----
(a) Any and all payments by Company to each Bank or Agent under
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for, any Taxes. In addition, Company shall pay
all Other Taxes.
(b) If Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank, or Agent, then:
(i) the sum payable shall be increased as necessary so
that, after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section), such Bank or Agent, as the case may be, receives and retains
an amount equal to the sum it would have received and retained had no such
deductions or withholdings been made;
(ii) Company shall make such deductions and withholdings;
(iii) Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) Company shall also pay to each Bank or Agent for the
account of such Bank, at the time interest is paid, Further Taxes in the
amount that the respective Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
(c) Company agrees to indemnify and hold harmless each Bank and
Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further
Taxes in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by Company of
Taxes, Other Taxes or Further Taxes, Company shall furnish to each Bank or Agent
the original or a certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to such Bank or Agent.
(e) Company will not be required to pay any additional amounts in
respect of Section 3.1(b) to any Bank or Agent:
36
(i) if such Bank shall have delivered to Company a Form
1001 (or any successor form) pursuant to Section 9.11(a)(i), and such Bank
shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
Company hereunder for any reason other than a change in United States law
or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) after the date of delivery
of such Form 1001 (or any successor form); or
(ii) if such Bank shall have delivered to Company a Form
4224 (or any successor form) pursuant to Section 9.11(a)(ii), and such Bank
shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments by
Company hereunder for any reason other than a change in United States law
or regulations or in the official interpretation of such law or regulations
by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the
date of delivery of such Form 4224 (or any successor form).
(f) If, at any time, Company requests any Bank to deliver any
forms or other documentation pursuant to Section 9.11(a)(iii), then Company
shall, on demand of such Bank through Agent, reimburse such Bank for any costs
and expenses (including Professional Costs) reasonably incurred by such Bank in
the preparation or delivery of such forms or other documentation.
(g) If Company is required to pay additional amounts to any Bank
or Agent pursuant to this Section 3.1, then such Bank or Agent, as the case may
be, shall use its reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office or take any other
reasonable action so as to eliminate any such additional payment by Company
which may thereafter accrue if such change, in the reasonable judgment of such
Bank, is not otherwise materially disadvantageous to such Bank or Agent.
3.2 Illegality.
----------
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to Company through
Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until the Bank notifies Agent and Company that the circumstances
giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to
maintain any Offshore Rate Loan, Company shall, upon receipt of notice of such
fact and demand from such Bank (with a copy to Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to
37
maintain such Offshore Rate Loans to such day, or immediately, if the Bank may
not lawfully continue to maintain such Offshore Rate Loans. If Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, Company shall borrow from the affected Bank, in the amount of such
repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, Company may elect, by giving
notice to the Bank through Agent that all Loans which would otherwise be made by
the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
3.3 Increased Costs and Reduction of Return.
---------------------------------------
(a) If any Bank determines that, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation, or (ii) the compliance by that Bank 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 to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans in an amount
deemed material by such Bank, then Company shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to Agent), pay
to Agent for the account of such Bank, additional amounts as are sufficient to
compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation; affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation controlling
the Bank and (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is increased in an amount
deemed material by such Bank as a consequence of its loans, credits or
obligations under this Agreement, then, upon request of such Bank (with a copy
to Agent), Company shall immediately pay to the Bank, from time to time as
specified by the Bank, additional amounts sufficient to compensate the Bank for
such increase.
3.4 Funding Losses. Company agrees to reimburse each Bank and to hold
--------------
each Bank harmless from any loss, cost or expense which the Bank may sustain or
incur as a consequence of:
(a) any failure of Company to make, on a timely basis, any payment
or prepayment of principal of any Offshore Rate Loan (including payments made
after any acceleration thereof);
(b) any failure of Company to continue or convert a Loan after
Company has given (or are deemed to have given) a Notice of
Conversion/Continuation;
(c) any failure of Company to make any prepayment after Company
has given a notice in accordance with Section 2.8;
38
(d) any prepayment of an Offshore Rate Loan on a day which is not
the last day of the Interest Period with respect thereto; or
(e) any conversion pursuant to Section 2.4 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period; or including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Offshore
Rate Loans hereunder or from fees payable to terminate the deposits from which
such funds were obtained.
3.5 Inability to Determine Rates. If Agent or Majority Banks shall have
----------------------------
determined that for any reason adequate and reasonable means do not exist for
ascertaining the Offshore Base Rate for any requested Interest Period with
respect to a proposed Offshore Rate Loan or that the Offshore Base Rate or the
Offshore Rate applicable pursuant to Section 2.11 for any requested Interest
Period with respect to a proposed Offshore Rate Loan does not adequately and
fairly reflect the cost to Banks of funding such Loan, Agent will forthwith give
notice of such determination to Company and each Bank. Thereafter, the
obligation of Banks to make or maintain Offshore Rate Loans hereunder shall be
suspended until Agent upon the instruction of Majority Banks revokes such notice
in writing. Upon receipt of such notice, Company may revoke any Notice of
Conversion/Continuation then submitted by Company. If Company does not revoke
such notice, Banks shall make, convert or continue the Loans, as proposed by
Company, in the amount specified in the applicable notice submitted by Company,
but such Loans shall be converted or continued as Base Rate Loans instead of
Offshore Rate Loans.
3.6 Reserves on Offshore Rate Loans. Company shall pay to each Bank, as
-------------------------------
long as such Bank shall be required under regulations of the Federal Reserve
Board to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Loan equal to actual costs of such reserves allocated to such Loan by the
Bank (as determined by the Bank in good faith, which determination shall be
conclusive) (without duplication for such costs included in the computation of
the Offshore Rate), payable on each date on which interest is payable on such
Loan provided Company shall have received at least 15 days' prior written notice
--------
(with a copy to Agent) of such additional sums from the Bank. Each such notice
from a Bank shall set forth in reasonable detail (as determined by the Bank) the
basis for such additional sums. If a Bank fails to give notice 15 days prior to
the relevant Interest Payment Date, such additional sums shall be payable 15
days from receipt of such notice.
3.7 Certificates of Banks. Any Bank claiming reimbursement or
---------------------
compensation pursuant to this Article shall deliver to Company (with a copy to
Agent) a certificate setting forth in reasonable detail the amount payable to
the Bank hereunder and such certificate shall be conclusive and binding on
Company in the absence of manifest error. Each certificate submitted under this
Section may not claim reimbursement or compensation for a period earlier than 30
days prior to the date of such certificate unless interpretation of the law or
regulation or the guideline or request in question is retroactive in effect in
which case the certificate can cover such retroactive period.
3.8 Substitution of Banks. Upon receipt by Company from any Bank of a
---------------------
claim for compensation under Section 3.1, 3.2, 3.3 or 3.6 (each such Bank an
"Affected Bank"), Company
-------------
39
may: (a) request the Affected Bank to use its reasonable efforts without
incurring any material expense to obtain a Replacement Bank; (b) request one or
more of the other Banks to acquire and assume all or part of such Affected
Bank's Loans and Commitment; or (c) designate a Replacement Bank. Any assignment
to a Replacement Bank pursuant to this Section shall be pursuant to an
Assignment and Acceptance in compliance with Section 10.8 including payment of
the processing fee to Agent (except to the extent that there is any conflict
between the provisions of this Section and Section 10.8, in which case the
provisions of this Section shall control). If Bank of America is the Affected
Bank, it may, at its sole option, resign as Agent or Collateral Agent.
Notwithstanding the provisions of Section 9.9 or 9.10, any resignation as Agent
or Collateral Agent by Bank of America under this Section shall take effect upon
delivery of Bank of America's written resignation to Company and Banks without
necessity of further action or lapse of time.
3.9 Survival. The agreements and obligations of Company in this Article
--------
shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1 Condition to Closing. The effectiveness of this Agreement is
--------------------
subject to the following conditions:
(a) Agent shall have received, on or before the Closing Date, all
of the following documents, in form and substance reasonably satisfactory to
Agent and Majority Banks:
(i) Loan Documents. Originals of the Loan Documents to
--------------
which Company is a party executed by Company.
(ii) Organization Documents. Copies of the Organization
----------------------
Documents of each Borrower Party, certified by the Secretary of State of
its jurisdiction of organization or, if such document is of a type that may
not be so certified, certified by the secretary or similar officer of the
applicable Borrower Party, together with a good standing certificate from
the Secretary of State of its jurisdiction of organization and each other
state in which such Person is qualified to do business and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate
taxing authority of each of such jurisdictions, each dated a recent date
prior to the Closing Date.
(iii) Resolutions; Incumbency.
-----------------------
(A) Copies of the resolutions of the board of
directors of each Borrower Party (or an authorized committee
thereof) approving and authorizing the execution, delivery, and
performance by such Borrower Party of the Loan Documents to which
such Borrower Party is a party, certified as of the Closing Date by
the Secretary or an Assistant Secretary of such Borrower Party.
40
(B) A certificate of the Secretary or an Assistant
Secretary of each Borrower Party certifying, as of the Closing Date,
the names and true signatures of the officers of such Borrower Party
authorized to execute and deliver, as applicable, this Agreement,
and all other Loan Documents to be delivered hereunder.
(iv) Opinions. Opinions of Wachtell, Lipton, Rosen, & Xxxx,
--------
special counsel to Company, Xxxxxx X. Xxxxxx Esq., Senior Vice President
and General Counsel of Company, and Legal Strategies Group, dated the
Closing Date, and addressed to Agent and Banks, in form and substance
reasonably satisfactory to Banks.
(v) Closing Certificates from Company. A certificate from
---------------------------------
the president, the chief financial officer, or the treasurer of Company,
dated as of the Closing Date, substantially in the form of Exhibit IV.
----------
(vi) No Material Adverse Effect. There has occurred since
--------------------------
November 28, 1999, as reflected in the draft consolidated financial
statements delivered on January 24, 2000 and the accompanying draft notes,
no event or circumstance that has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(vii) Security Interests in Collateral. Evidence satisfactory
--------------------------------
to Agent that Borrower Parties shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered
all such agreements, documents and instruments, and made or caused to be
made all such filings and recordings (other than the filing or recording of
items described in subsections (B), (C) and (D) below) that may be
necessary or, in the opinion of Agent, desirable in order to create in
favor of Agent, for the benefit of Banks, a valid and (upon such filing and
recording) perfected Lien on the Collateral. Such actions shall include the
following:
(A) Stock Certificates and Instruments. Delivery to
----------------------------------
Agent of (1) certificates (which certificates shall be accompanied
by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Agent) representing
all Capital Stock pledged pursuant to the Pledge and Security
Agreement and (2) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Agent)
evidencing any Collateral;
(B) Lien Searches and UCC Termination Statements.
--------------------------------------------
Delivery to Agent of (1) the results of a recent search, by a Person
satisfactory to Agent, of all effective UCC financing statements and
fixture filings and all judgment and tax lien filings which may have
been made with respect to any personal or mixed property of any
Borrower Party, together with copies of all such filings disclosed
by such search, and (2) UCC termination statements duly executed by
all applicable Persons for filing in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing statements
or fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect
41
of Liens permitted to remain outstanding pursuant to the terms of
this Agreement);
(C) UCC Financing Statements and Fixture Filings.
--------------------------------------------
Delivery to Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable
Borrower Party with respect to all personal and mixed property
Collateral of such Borrower Party, for filing in all jurisdictions
as may be necessary or, in the opinion of Agent, desirable to
perfect the security interests created in such Collateral pursuant
to the Collateral Documents; and
(D) Intellectual Property Filings. Delivery to Agent
-----------------------------
of all cover sheets or other documents or instruments required to be
filed with the United States Patent and Trademark Office in order to
create or perfect Liens in respect of any IP Collateral.
(viii) Foreign Subsidiaries. Copies of the Organization
--------------------
Documents of each Pledged Foreign Subsidiary.
(ix) Financial Statements. A copy of a draft of the
--------------------
unaudited (A) consolidated and consolidating balance sheets of Company and
its Subsidiaries as at the end of the fiscal year ended November 28, 1999,
(B) related consolidated and consolidating statements of income of Company
and its Subsidiaries for such fiscal year, and (C) related consolidated
statement of cash flows of Company and its Subsidiaries for such fiscal
year.
(x) Evidence of Insurance. A certificate from Company's
---------------------
insurance broker or other evidence satisfactory to Agent that all insurance
required to be maintained pursuant to Sections 5.16 and 6.6 is in full
force and effect.
(xi) Financial Plan. A consolidated plan and financial
--------------
forecast for fiscal years 2000 and 2001 including (A) forecasted
consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for each such fiscal
year and for each month of fiscal year 2000 and each quarter of fiscal year
2001, together with a pro forma calculation of compliance with Sections
7.6, 7.7 and 7.8 for each quarter of each such fiscal year, and (B) such
other information as Agent may reasonably request.
(xii) Intercreditor Agreement. Executed copies of the
-----------------------
Intercreditor Agreement.
(xiii) Other Credit Facilities. Executed copies of the Bridge
-----------------------
Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement,
and the Amended and Restated 1997 364 Day Credit Agreement, together with
evidence satisfactory to Agent that all conditions precedent to the
effectiveness of such agreements have been satisfied.
(xiv) Other Documents. Such other approvals, opinions,
---------------
documents or materials as Agent or any Bank may reasonably request.
42
(b) Representations and Warranties. The representations and
------------------------------
warranties made by Company herein, or which are contained in any certificate,
document or financial or other statement furnished at any time under or in
connection herewith or therewith, shall be correct on and as of the Closing
Date.
(c) Existing Receivables Facility. On the Closing Date, LSFLLC
------------------------------
shall have (i) repurchased all accounts receivable sold under the Existing
Receivables Purchase Agreement, (ii) terminated any commitments to purchase any
accounts receivable or make other extensions of credit thereunder, and (iii)
delivered to Agent all documents or instruments necessary to assign to LSFLLC
all financing statements filed in respect of transactions under the Existing
Receivables Purchase Agreement. In addition, the Levi Xxxxxxx Receivables
Transfer Agreement dated as of April 28, 1999 among Company, Levi Xxxxxxx
Financial Center Corporation and Levi Xxxxxxx Funding Corp. shall have been
terminated.
(d) Payment of Fees. On the Closing Date, Agent shall have
---------------
received evidence of payment by Company of all accrued and unpaid fees, costs
and expenses to the extent then due and payable on the Closing Date pursuant to
the terms of this Agreement, together with Professional Costs of Bank of
America, to the extent invoiced prior to or on the Closing Date; including any
such costs, fees and expenses arising under or referenced in Sections 2.12 and
10.4.
(e) LSFLLC. LSFLLC shall have entered into a Receivables Transfer
------
Agreement with Levi Xxxxxxx Financial Center Corporation similar to the
Receivables Transfer Agreement between Levi Xxxxxxx Financial Center Corporation
and Levi Xxxxxxx Funding Corp. and Agent shall have received duly executed UCC
financing statements for filing in all appropriate jurisdictions.
4.2 Conditions Subsequent. No later than the day following the Closing
---------------------
Date, Agent shall have received all of the following documents, in form and
substance satisfactory to Agent and Majority Banks:
(a) Loan Documents. Originals of the Guaranty and the Pledge and
--------------
Security Agreement executed by all Material Domestic Subsidiaries; and
(b) Opinions. An opinion of Wachtell, Lipton, Xxxxx & Xxxx,
--------
special counsel to Company, and Xxxxxx X. Xxxxxx, Esq., Senior Vice President
and General Counsel of Company, dated the Subsequent Closing Date, addressed to
Agent and Banks, in form and substance reasonably satisfactory to Banks.
43
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Company represents and warrants to Agent and each Bank that:
5.1 Organization, Powers, Good Standing, Business, Ownership of
-----------------------------------------------------------
Subsidiaries and Capitalization.
-------------------------------
(a) Organization and Powers. Each Borrower Party is a corporation
-----------------------
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1(a) and has all
---------------
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and proposed to be conducted, to enter
into each Loan Document, to issue the Notes (in the case of Company) and to
carry out the transactions contemplated hereby and thereby.
(b) Good Standing. Each Borrower Party is duly qualified to do
-------------
business and is in good standing wherever necessary to carry on its respective
present business and operations, except in jurisdictions in which the failure to
be so qualified or to be in good standing has not had and will not have a
Material Adverse Effect.
(c) Conduct of Business. Company and its Subsidiaries, considered
-------------------
together, are engaged only in businesses related or incidental to the
manufacture and sale of clothing and accessories and the LOS/DOS Business.
(d) Common Stock of Company. All of the issued and outstanding
-----------------------
shares of Capital Stock of Company and each of its Subsidiaries have been duly
and validly issued and are fully paid and non-assessable.
(e) Restricted Subsidiaries. As of the Closing Date, the only
-----------------------
Restricted Subsidiaries are those listed on Schedule 5.1(e).
---------------
(f) Organizational Structure. As of the Closing Date, the
------------------------
organizational structure of Company and its Subsidiaries is set forth on
Schedule 5.1(f).
---------------
(g) Material Subsidiaries. As of the Closing Date, all Material
---------------------
Subsidiaries are listed on Schedule 5.1(g). As of the end of each fiscal
---------------
quarter, the aggregate gross revenues of the Subsidiaries of Company not
constituting Material Subsidiaries for the preceding four fiscal quarter period
shall not be more than 1% of the aggregate gross revenues of Company and its
Subsidiaries on a consolidated basis for such period.
5.2 Authorization of Borrowing, etc.
--------------------------------
(a) Authorization of Borrowing. The execution, delivery and
--------------------------
performance by each Borrower Party of each Loan Document to which it is a party
and the issuance, delivery and payment of the Notes by Company as contemplated
herein have been duly authorized by all necessary corporate action by such
Borrower Party. Each of the Loan Documents (other than the Notes) to which any
Borrower Party is a party has been duly executed and delivered by such
44
Borrower Party, and the Notes, when executed and delivered, will be duly
executed and delivered by Company.
(b) No Conflict. The execution, delivery and performance by each
-----------
Borrower Party of each Loan Document to which it is a party and the issuance,
delivery and performance of the Notes by Company do not and will not (i) violate
any Borrower Party's Organization Documents or any order, judgment or decree of
any court or other Governmental Authority binding on any Borrower Party, (ii)
conflict with, result in a breach of, constitute a default under, or require the
termination of, any Contractual Obligation of any Borrower Party, except where
such conflicts, breaches, defaults and terminations, in the aggregate, would not
have a Material Adverse Effect, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any of the properties or
assets of any Borrower Party (other than pursuant to the Collateral Documents),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of any Borrower Party except for such
approvals or consents which will be obtained on or before the Closing Date or
where the failure to obtain such approvals and consents would not, in the
aggregate, have a Material Adverse Effect.
(c) Governmental Consents. The execution, delivery and performance
---------------------
by Borrower Parties of the Loan Documents, the application of the proceeds of
the Loans and the issuance, delivery and performance of the Notes by Company do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any Governmental Authority except
actions which are required due to a change in applicable law after the date
hereof and which have been or will be duly taken within the time period
prescribed by any such law.
(d) Binding Obligation. Each of the Loan Documents (other than the
------------------
Notes) to which any Borrower Party is a party is, and the Notes, when executed
and delivered, will be, the legally valid and binding obligations of such
Borrower Party, enforceable against such Borrower Party in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability, whether
enforcement is sought in a proceeding at law or in equity.
5.3 Financial Condition. On January 24, 2000, Company delivered to Agent
-------------------
a draft of its unaudited financial statements for its fiscal year ending
November 28, 1999 and the accompanying draft notes. The foregoing financial
statements were prepared in conformity with GAAP, and fairly present, in all
material respects, the consolidated financial position of Company and its
Subsidiaries as of the date thereof and the consolidated results of operations
and cash flows of Company and its Subsidiaries for the period covered thereby,
subject, to changes resulting from audit and normal year-end adjustments. As of
the date of this Agreement, Company and its Subsidiaries, taken as a whole, have
no material contingent obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment, which is not
reflected in the unaudited financial statements for its fiscal year ending
November 28, 1999, the notes thereto, or the most recent financial statements
delivered pursuant to Section 6.1 (if any), and which is required by GAAP to be
reflected therein. Since November 28, 1999, there has been no event or
circumstance which has a Material Adverse Effect.
45
5.4 Title to Properties; Liens. Each of Company and its Subsidiaries has
--------------------------
good, sufficient and legal title to all of its respective properties and assets
reflected in the balance sheets referred to in Section 5.3 or in the most recent
financial statements delivered pursuant to Section 6.1 (if any), except for
assets acquired or disposed of in the ordinary course of business since the date
of such balance sheet and assets disposed of where such disposition would not be
prohibited by Sections 7.3 and 7.4 and except for those imperfections of title
which would not in the aggregate have a Material Adverse Effect. Except as
permitted under Section 7.2, all such properties and assets are free and clear
of Liens. As of the Closing Date, the only Principal Properties are those listed
on Schedule 5.4. As of the Closing Date, all domestic real property that is
------------
owned or leased by Company and its Subsidiaries is listed on Schedule 5.4.
------------
5.5 Litigation; Adverse Facts. Except as to any confidential
-------------------------
governmental proceeding of which Borrower Parties are unaware, there is no
action, suit, proceeding, claim or dispute (whether or not purportedly on behalf
of Company or any of its Subsidiaries) at law or in equity or before or by any
Governmental Authority, pending or, to the knowledge of any Borrower Party,
threatened in writing against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries, which any Borrower Party
reasonably expects to (a) result in any Material Adverse Effect, or (b)
materially and adversely affect the ability of any Borrower Party to perform the
Obligations or the ability of Banks to enforce the Obligations. Neither Company
nor any of its Subsidiaries is (i) in violation of any applicable Requirement of
Law which (as to all such violations in the aggregate) would have a Material
Adverse Effect, or (ii) subject to or in default with respect to any final
judgment, writ, injunction, decree, rule or regulation of any Governmental
Authority, domestic or foreign, which (as to all such matters in the aggregate)
would have a Material Adverse Effect. There is no action, suit or proceeding
pending or, to the knowledge of any Borrower Party, threatened in writing
against or affecting Company or any of its Subsidiaries which challenges the
validity or the enforceability of this Agreement, the Notes or the other Loan
Documents.
5.6 Payment of Taxes. All federal and state tax returns and reports of
----------------
Company and each of its Subsidiaries required to be filed by such Person, where
the failure to file such returns or reports would have a Material Adverse
Effect, have been timely filed, and all taxes, assessments, fees and other
governmental charges upon such Persons and upon their respective properties,
assets, income and franchises which are due and payable, where the failure to
pay such amounts when due and payable would in the aggregate have a Material
Adverse Effect, have been paid when due and payable. No Borrower Party knows of
any proposed tax assessment against Company or any of its Subsidiaries that
would have a Material Adverse Effect which is not being actively contested in
good faith by the applicable corporation to the extent affected thereby (and as
to which any provision therefor required pursuant to Section 6.5 has been made).
5.7 Materially Adverse Agreements; Performance.
------------------------------------------
(a) Agreements. Neither Company nor any of its Subsidiaries is a
----------
party to or subject to any material agreement or instrument or charter or other
internal restriction which (in the aggregate as to all such matters) would have
a Material Adverse Effect.
46
(b) Performance. Neither Company nor any of its Subsidiaries is in
-----------
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation of Company or
any of its Subsidiaries, nor will any default result from the consummation of
this Agreement or any of the other Loan Documents, and no condition exists
which, with the giving of notice or the lapse of time or both, would constitute
such a default, except where the consequences, direct or indirect, of such
default or defaults, if any, would not have a Material Adverse Effect.
5.8 Governmental Regulation. Neither Company nor any of its Material
-----------------------
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940, any state public utilities code or to any federal or state
statute or regulation limiting its ability to incur Indebtedness for money
borrowed.
5.9 ERISA Compliance. Except as specifically disclosed in Schedule 5.9:
---------------- ------------
(a) And except as would not have a Material Adverse Effect, each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of any Borrower Party, nothing has
occurred which would cause the loss of such qualification. Company and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower
Party, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event that requires notice to be given to the
PBGC has occurred or is reasonably expected to occur; (ii) no Pension Plan has a
Funded Current Liability Percentage of less than 90%; (iii) neither Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan.
5.10 Environmental Matters. Company and each of its Subsidiaries conducts
---------------------
in the ordinary course of business a review of the effect of existing
Environmental Laws and existing Environmental Claims on its business, operations
and properties, and as a result thereof each Borrower Party has reasonably
concluded that, except as specifically disclosed in Schedule 5.10,
-------------
47
such Environmental Laws and Environmental Claims are not, individually or in the
aggregate, reasonably expected to have a Material Adverse Effect.
5.11 Compliance With Laws. Each of Company and its Subsidiaries is in
--------------------
compliance with all Requirements of Law applicable to their properties, assets
and business where the failure to so comply would (as to all such failures to
comply in the aggregate) have a Material Adverse Effect. There are no
proceedings pending or, to the knowledge of any Borrower Party, threatened in
writing, to terminate or modify any license, permit or other approval issued by
a Governmental Authority, the termination or modification of which (in the
aggregate as to all such matters) would have a Material Adverse Effect.
5.12 Regulation U. None of Company nor any of its Subsidiaries is engaged
------------
principally, nor as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans 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. No part of the proceeds of the Loans will be used for any
purpose which violates, or which is inconsistent with, the provisions of
Regulation T, U or X of the Federal Reserve Board.
5.13 Disclosure. No representation or warranty of any Borrower Party
----------
contained in this Agreement or any other document, certificate or written
statement furnished to Agent or any Bank by any Borrower Party for use in
connection with any transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits to state or will omit
to state a material fact known to such Borrower Party necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
5.14 Matters Relating to Collateral.
------------------------------
(a) The execution and delivery of the Collateral Documents by
Borrower Parties, together with (i) the actions taken on or prior to the date
hereof pursuant to Sections 4.1(a)(vii) and 4.1(a)(viii), (ii) the actions taken
pursuant to Sections 6.9 and 6.11, and (iii) the delivery to Agent of any
Pledged Collateral not delivered to Agent at the time of execution and delivery
of the applicable Collateral Document (all of which Pledged Collateral has been
so delivered) are effective to create in favor of Agent for the benefit of
Banks, as security for the respective Secured Obligations (as defined in the
applicable Collateral Document in respect of any Collateral), a valid and
perfected Lien on all of the Collateral, a security interest in which may be
perfected by filing in the United States or possession, and all filings and
other actions necessary or desirable to perfect and maintain the perfection of
such Liens have been duly made or taken and remain in full force and effect,
other than the filing of any UCC financing statements delivered to Agent for
filing (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Agent.
(b) No authorization, approval or other action by, and no notice
to or filing with, any Government Authority in the United States is required for
either (i) the pledge or grant by any Borrower Party of the Liens purported to
be created in favor of Agent pursuant to any of the Collateral Documents, or
(ii) the exercise by Agent of any rights or remedies in respect of
48
any Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by Section 5.14(a) and except as may be
required, in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities.
(c) The pledge of the Pledged Collateral pursuant to the
Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(d) All information supplied to Agent by or on behalf of any
Borrower Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
5.15 Intangible Assets. Company and its Subsidiaries own, or possess the
-----------------
right to use, all trademarks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intangible assets that are used in the conduct of
their respective businesses as now operated, and none of such items, to the best
knowledge of any Borrower Party, conflicts with the valid trademark, trade name,
copyright, patent, patent right or intangible asset of any other Person to the
extent that such failure to own or possess or such conflict has a Material
Adverse Effect.
5.16 Insurance. The properties of Company and its Subsidiaries are
---------
insured with financially sound and reputable insurance companies not Affiliates
of Company or with Majestic Insurance International Ltd., a wholly-owned
Subsidiary of Company, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where Company and its Subsidiaries
operate. From and after the date that is 30 days following the Closing Date,
property, general liability, business interruption and automobile insurance
policies shall name Collateral Agent for the benefit of Banks as an additional
insured thereunder as its interests may appear and, in the case of property
insurance, contain a loss payable subsection or endorsement, satisfactory in
form and substance to Agent, that names Collateral Agent for the benefit of
Banks as the loss payee thereunder for any covered loss with respect to the
Collateral, as appropriate. Insurance policies shall provide for at least 30
days prior written notice to Agent of any material modification or cancellation
of such policy.
5.17 Year 2000. Company has (a) initiated a review and assessment of all
---------
areas within its and each of its Subsidiaries' business and operations
(including those affected by customers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications and devices containing imbedded computer chips used by Company or
any of its Subsidiaries (or their respective customers and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (b) developed a
plan and timeline for addressing the Year 2000 Problem on a timely basis, and
(c) to date, implemented that plan in accordance with that timetable. Based on
the foregoing, Company believes that all computer applications and devices
containing imbedded computer chips (including those of its and its Subsidiaries'
customers and vendors) that are material to its or any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and
49
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so does not have a Material Adverse Effect.
5.18 Solvency. Each Borrower Party is and, upon the incurrence of any
--------
Obligations by such Borrower Party on any date on which this representation is
made, will be, Solvent.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
Company covenants and agrees that, until full and final payment of all
Loans and other Obligations, unless Majority Banks waive compliance in writing,
Company shall, and shall (except in the case of Company's reporting covenants)
cause each of its Subsidiaries to, perform and comply with all covenants in this
Article.
6.1 Financial Statements and Other Reports.
--------------------------------------
(a) Company shall maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP and in material conformity with
all applicable requirements of any Governmental Authority having regulatory
jurisdiction over Company or any of its subsidiaries. Company shall deliver to
Agent for distribution to Banks:
(i) as soon as practicable and in any event within 30 days
after the end of each fiscal month, a copy of the consolidated and
consolidating balance sheets of Company and its Subsidiaries, as at the end
of such period, the related consolidated and consolidating statement of
income of Company and its Subsidiaries for such fiscal month and for the
fiscal year to date, and the related consolidated statement of cash flows
of Company and its Subsidiaries for such fiscal month and for the fiscal
year to date, certified by the chief financial officer, treasurer or
controller of Company as fairly presenting the financial condition of
Company and its Subsidiaries in all material respects as at the dates
indicated and the results of their operations and changes in cash flows for
the periods indicated in accordance with GAAP, except for the absence of
footnotes and subject to changes resulting from audit and normal year-end
adjustment;
(ii) as soon as practicable and in any event within 45 days
after the end of each of the first three fiscal quarters of the fiscal
year, a copy of the consolidated and consolidating balance sheets of
Company and its Subsidiaries, as at the end of such period, the related
consolidated and consolidating statement of income of Company and its
Subsidiaries for such fiscal quarter and for the fiscal year to date, and
the related consolidated statement of cash flows of Company and its
Subsidiaries for such fiscal quarter and for the fiscal year to date,
certified by the chief financial officer, treasurer or controller of
Company as fairly presenting the financial condition of Company and its
Subsidiaries in all material respects as at the dates indicated and the
results of their operations and changes in cash flows for the periods
indicated in accordance with GAAP, except for the absence of footnotes and
subject to changes resulting from audit and normal year-end adjustment;
50
(iii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, a copy of the consolidated and
consolidating balance sheets of Company and its Subsidiaries, as at the end
of such year, the related consolidated and consolidating statements of
income of Company and its Subsidiaries for such fiscal year and the related
consolidated statements of stockholders' equity and cash flows of Company
and its Subsidiaries for such fiscal year, accompanied by a report thereon
of and a letter from Xxxxxx Xxxxxxxx LLP or other independent public
accountants of recognized national standing selected by Company and
satisfactory to Majority Banks substantially in the form of Exhibit VIII,
------------
which report shall be unqualified as to going concern and scope of audit
and shall state that such consolidated financial statements present fairly
in all material respects the financial position of Company and its
Subsidiaries as at the dates indicated and the results of operations and
cash flows for the periods indicated in conformity with GAAP (except as
otherwise stated therein) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) together with each delivery of any financial statements
pursuant to Section 6.1(a)(ii) or 6.1(a)(iii) a Compliance Certificate from
Company executed by a Responsible Officer, stating that the signer does not
have knowledge of the existence as at the date of such certificate, of any
condition or event which constitutes a Default or Event of Default, or, if
any such condition or event existed at such date or exists, specifying the
nature and period of existence thereof and what action Company has taken,
is taking and proposes to take with respect thereto, and demonstrating in
reasonable detail compliance during or at the end of such accounting
periods, as applicable, with Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.11
and 7.16; and, should there be any material change in GAAP as in effect as
of the Closing Date, such Compliance Certificate shall include computations
setting forth reconciliation of the items used in computing compliance with
the covenants under this Agreement by reason of the differences between
GAAP used in the preparation of such financial statements and GAAP as in
effect as of the Closing Date;
(v) concurrently with the delivery of the financial
statements referred to in Section 6.1(a)(iii), a certificate of Company's
independent certified public accountants certifying such financial
statement and stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default hereunder or, if
any such Default or Event of Default shall exist, stating the nature and
status of such event;
(vi) as soon as practicable and in any event no later than
10 Business Days after the end of each fiscal month, a cash flow forecast
for Company and its Subsidiaries for the then following 13 weeks and a
report setting forth the cash flows of Company and its Subsidiaries for the
prior 13 weeks, together with an explanation of any material variance
between those results and the results previously projected for those 13
weeks;
(vii) (A) as soon as practicable and in any event no later
than 10 Business Days after the end of each fiscal month, (1) a report
setting forth the details of
51
(y) any Lender Derivative/FX Contract to which Company or FinServ is a
party, including the Termination Value of any such Lender Derivative/FX
Contract, and (z) all other outstanding unsecured Indebtedness of Company
or any of its Subsidiaries (including any letters of credit (other than
Lender Letters of Credit) issued for the benefit of Company and its
Subsidiaries) incurred in accordance with Section 7.1(r), and (2)
information with respect to all other Derivative/FX Contracts to which
Company or any of its Subsidiaries is a party, and (B) promptly upon
request, any other information concerning such Derivative/FX Contracts
reasonably requested by Agent;
(viii) as soon as practicable and in any event no later than
30 days after the end of fiscal year 2000, a consolidated plan and
financial forecast for fiscal year 2001 including (A) forecasted
consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for such fiscal year
and for each month of such fiscal year, together with a pro forma
--- -----
calculation of compliance with Sections 7.6, 7.7 and 7.8 for each quarter
of such fiscal year and an explanation of the major assumptions on which
such forecasts are based, and (B) such other information as Agent may
reasonably request;
(ix) promptly after the same are available, copies of each
annual report or proxy statement sent to the stockholders of Company, and
copies of all annual, regular, periodic and special reports and
registration statements which Company may file or, if Company were subject
to the Exchange Act, would be required to file with the Securities and
Exchange Commission under Sections 13 or 15(d) of the Exchange Act, and not
otherwise required to be delivered to Agent pursuant hereto;
(x) promptly upon any Responsible Officer of Company
obtaining knowledge of any condition or event which constitutes a Default
or Event of Default, or becoming aware that any Bank has given any written
notice of a claimed Default or Event of Default, a certificate from
Company, executed by a Responsible Officer of Company, specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or action taken, and the nature of such claimed
Default or Event of Default, event or condition, and what action Company
has taken, is taking, and proposes to take with respect thereto;
(xi) promptly upon any Responsible Officer of Company
obtaining knowledge of (A) the institution of, or non-frivolous threat of,
any material action, suit, proceeding or arbitration against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries not previously disclosed in writing by Company to Agent, or
(B) any material development in any action, suit, proceeding or arbitration
already disclosed, and in each case Company reasonably expects such
institution, threat, or material development to result in any Material
Adverse Effect or materially and adversely to affect the ability of Company
and its Subsidiaries, taken as a whole, to perform the Obligations or the
ability of Banks to enforce the Obligations, Company shall promptly give
notice thereof to Agent and provide such other information (excluding
communications covered by the attorney-client privilege) as may be
reasonably requested by Agent or a Bank to enable their counsel to evaluate
such matters;
52
(xii) promptly upon any Responsible Officer of Company
becoming aware of its occurrence, notice of any of the following events
affecting Company or any ERISA Affiliate (but in no event more than 10 days
after such event), and such Responsible Officer shall also deliver to Agent
and each Bank a copy of any notice with respect to such event that is filed
with a Governmental Authority and any notice delivered by a Governmental
Authority to Company or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a decrease in the Funded Current Liability
Percentage for any Pension Plan at the end of any fiscal quarter to
less than 90%; or
(C) any significant change in the status of any item
disclosed on Schedule 5.9;
------------
(xiii) promptly upon receipt thereof, copies of any detailed
audit reports, management letters or recommendations submitted to the board
of directors (or the audit committee of the board of directors) of Company
by independent accountants in connection with the accounts or books of
Company or any of its Subsidiaries, or any audit of any of them;
(xiv) promptly upon any discovery or determination that any
computer application (including those of its suppliers and vendors) that is
material to the business and operations of Company or any of its
Subsidiaries will not be Year 2000 Compliant on a timely basis, except to
the extent that such failure does not have a Material Adverse Effect, a
notice thereof; and
(xv) promptly upon any Responsible Officer of Company
becoming aware of its occurrence, a notice of any material change in
accounting policies or financial reporting practices by Company or any of
its Subsidiaries.
(b) Company will deliver to Agent for distribution to each Bank
together with the Compliance Certificate required under subsection (iv) of
subsection (a) of this Section, a copy of all press releases and other
statements made available generally by Company to the public during the period
covered by the Compliance Certificate. The press releases and such other
statements covered by this subsection are those which concern material
developments in the business of Company and its Subsidiaries taken as a whole.
(c) Company will deliver to Agent for distribution to each Bank
copies of material financial and other information as Agent or Majority Banks
may reasonably request from time to time.
6.2 Corporate Existence, etc. Except as permitted by Section 7.4,
-------------------------
Company shall, and shall cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its corporate existence and rights
and franchises material to its business and its goodwill except where the
failure to do so would not in the aggregate have a Material Adverse Effect.
53
6.3 Compliance With Laws, etc. Company shall, and shall cause each of
--------------------------
its Subsidiaries to, comply with the requirements of each applicable Requirement
of Law, including all laws relating to environmental, health, safety and land
use matters applicable to any property, except where the failure to do so would
not in the aggregate have a Material Adverse Effect.
6.4 Compliance with Agreements. Company shall, and shall cause each of
--------------------------
its Subsidiaries to, promptly and fully comply with all Contractual Obligations
to which any one or more of them is a party, except for any such Contractual
------
Obligations (a) the performance of which would cause a Default or Event of
Default, (b) then being contested by any of them in good faith by appropriate
proceedings, or (c) if the failure to comply therewith does not have a Material
Adverse Effect.
6.5 Payment of Taxes and Claims. Company shall, and shall cause each of
---------------------------
its Subsidiaries to pay, all taxes, assessments and other governmental charges
(other than taxes, assessments and other governmental charges not exceeding
$5,000,000 in the aggregate) imposed upon any of them or any of their properties
or assets or in respect of any of their franchises, business, income or property
before any penalty or interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
(other than claims not exceeding $5,000,000 in the aggregate) which have become
due and payable and which by law have or may become a Lien upon any of their
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such governmental charge or
--------
claim need be paid if it is being contested in good faith by appropriate
proceedings and if such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor.
6.6 Maintenance of Properties; Insurance.
------------------------------------
(a) Company shall, and shall cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition
all properties used or useful in the business of Company and its Subsidiaries
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof, if the failure to perform such actions would
in the aggregate have a Material Adverse Effect. Company shall, and shall cause
each of its Subsidiaries to, maintain or cause to be maintained, through self-
insurance or with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and business of its
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations, if the failure
to do so would (as to all such failures in the aggregate) have a Material
Adverse Effect. From and after the date that is 30 days following the Closing
Date, property, general liability, business interruption and automobile
insurance policies shall (i) name Collateral Agent for the benefit of Banks as
an additional insured thereunder with respect to all Collateral as its interests
may appear and, in the case of property insurance, (ii) contain a loss payable
subsection or endorsement, satisfactory in form and substance to Agent, that
names Collateral Agent for the benefit of Banks as the loss payee thereunder for
any covered loss with respect to all Collateral, as appropriate. Insurance
policies shall provide for at least 30 days prior written notice to Agent of any
material modification or cancellation of such policy.
54
(b) Upon receipt by Company or any of its Subsidiaries of any
insurance proceeds constituting Net Insurance Proceeds, (i) so long as no Event
of Default shall have occurred and be continuing, Company or such Subsidiary may
retain and apply such Net Insurance Proceeds for working capital purposes, in
the case of business interruption insurance proceeds, or to pay or reimburse the
costs of repairing, restoring or replacing the assets or substantially similar
assets in respect of which such Net Insurance Proceeds were received or, to the
extent not so applied, as provided in Section 2.9, and (ii) if an Event of
Default shall have occurred and be continuing, Company shall apply an amount
equal to such Net Insurance Proceeds as provided in Section 2.9.
6.7 Inspection.
----------
(a) Company shall, and shall cause each of its Subsidiaries to,
(i) permit any authorized representatives designated by a Bank, at the expense
of that Bank, to visit and inspect any of the properties of Company or any of
its Subsidiaries, including their financial and accounting records, and to make
copies and take extracts therefrom, and to discuss their affairs, finances and
accounts with their officers and independent public accountants, all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested, and (ii) following the occurrence and
during the continuation of an Event of Default, permit any authorized
representatives designated by a Bank, at the expense of Company, to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with their
officers and independent public accountants, immediately upon request by Agent.
(b) Company shall, and shall cause each of its Subsidiaries to,
permit E & Y Restructuring LLC and its affiliates, at the expense of Company, to
have access to and review their financial and accounting records in connection
with the services to be performed by E & Y Restructuring LLC for Banks and to
discuss their affairs, finances and accounts. The scope of such services shall
be determined by Banks from time to time and shall include a monthly review
during the first six months following the Closing Date (including a review of
all Derivative/FX Contracts) and a quarterly review thereafter. Banks agree that
provided no Event of Default has occurred and is continuing, the Professional
--------
Costs for the services of E & Y Restructuring LLC for which Company shall be
liable shall not exceed $600,000 in the aggregate plus all related expenses.
----
Information acquired by a Bank pursuant to this Section shall be subject to the
confidentiality provisions of Section 10.10.
6.8 Use of Proceeds. Company shall use the proceeds of the Loans for
---------------
working capital and other general corporate purposes and not in contravention of
any applicable Requirement of Law.
6.9 Execution of Guaranty and Collateral Documents by Additional
------------------------------------------------------------
Subsidiaries.
------------
(a) In the event that any Person becomes a Material Domestic
Subsidiary after the date hereof, Company will notify Agent of that fact and
cause such Material Domestic Subsidiary to execute and deliver to Agent a
counterpart of the Guaranty and the Pledge and Security Agreement, and to take
all such further actions and execute such further documents and
55
instruments as may be necessary or, in the opinion of Agent, desirable to create
in favor of Collateral Agent, for the benefit of Banks, a valid and perfected
Lien on the assets of such Material Domestic Subsidiary described in the
applicable Collateral Documents within 30 days of such Person becoming a
Material Domestic Subsidiary; provided, however, that neither Company nor any of
-------- -------
its Subsidiaries shall be required to grant Liens on any Principal Property, the
Capital Stock of a Restricted Subsidiary or any Indebtedness of or issued by a
Restricted Subsidiary.
(b) Company shall deliver to Agent, together with such Loan
Documents, (i) certified copies of such Subsidiary's Organization Documents,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its organization and each other state in which such Person is
qualified to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to Agent,
(ii) a certificate executed by the secretary or similar officer of such
Subsidiary as to (A) the fact that the attached resolutions of the board of
directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (B) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iii) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to Agent and
its counsel, as to (A) the due organization and good standing of such
Subsidiary, (B) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (C) the enforceability of such Loan Documents against
such Subsidiary, and (D) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agent and its counsel.
(c) In the event that (i) Company or any Material Domestic
Subsidiary acquires any fee interest or leasehold interest in real property
after the date hereof or (ii) at the time any Person becomes a Material Domestic
Subsidiary, such Person owns or holds any fee interest or leasehold interest in
real property, Company or such Material Domestic Subsidiary will notify Agent of
that fact and deliver, or cause such Material Domestic Subsidiary to, execute
and deliver to Agent, within 30 days of such Person acquiring such Property or
becoming a Material Domestic Subsidiary, as the case may be, a fully executed
and notarized Mortgage, in proper form for recording in all appropriate places
in all applicable jurisdictions, encumbering the interest of such Borrower Party
in such Property, and the opinions, appraisals, documents, title insurance,
environmental reports described in Section 6.11(a) or that may be reasonably
required by Agent; provided, however, that neither Company nor any of its
-------- -------
Subsidiaries shall be required to grant Liens on any Principal Property.
6.10 Compliance with ERISA. Company shall and shall cause each of its
---------------------
Subsidiaries and their respective ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other federal or state law; (b) cause each Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.
56
6.11 Post Closing Actions.
--------------------
(a) Real Estate.
-----------
(i) On or prior to the date that is 60 days after the
Closing Date, Company shall have delivered to Agent:
(A) Fully executed and notarized Mortgages in proper
form for recording in all appropriate places in all applicable
jurisdictions, encumbering the Property listed on Schedule
--------
6.11(a)(i);
----------
(B) An opinion of counsel (which counsel shall be
reasonably satisfactory to Agent) in each state in which any such
Property is located with respect to the enforceability of the
form(s) of Mortgages to be recorded in such state and such other
matters as Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Agent;
(C) (1) ALTA mortgagee title insurance policies or
unconditional commitments therefor issued by a title company
satisfactory to Agent with respect to the Property listed on
Schedule 6.11(a)(i), in amounts not less than the respective amounts
-------------------
designated therein with respect to any particular Property, insuring
fee simple title to each such Property vested in Company and
assuring Agent that the applicable Mortgage creates valid and
enforceable mortgage Liens on the respective Property encumbered
thereby subject only to a standard survey exception, which policies
(y) shall include an endorsement for mechanics' liens, for future
advances under this Agreement and for any other matters reasonably
requested by Agent and (z) shall provide for affirmative insurance
and such reinsurance as Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to Agent;
and (2) evidence satisfactory to Agent that Company has delivered to
the title company all certificates and affidavits required by the
title company in connection with the issuance of the policies and
paid to the title company or to the appropriate governmental
authorities all expenses and premiums of the title company in
connection with the issuance of the policies and all recording and
stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Mortgages in the
appropriate real estate records;
(D) With respect to each Property listed on Schedule
--------
6.11(a)(i), a title report issued by the title company with respect
----------
thereto, dated not more than 30 days prior to the Closing Date and
satisfactory in form and substance to Agent;
(E) Copies of all recorded documents listed as
exceptions to title or otherwise referred to in the policies or in
the title reports delivered pursuant to subsection (D); and
(F) (1) Evidence, which may be in the form of a letter
from an insurance broker or a municipal engineer, as to whether any
Property is a Flood Hazard Property and the community in which any
such Flood Hazard Property is
57
located is participating in the National Flood Insurance Program;
(2) if there are any such Flood Hazard Properties, Company's written
acknowledgement of receipt of written notification from Agent (y) as
to the existence of each such Flood Hazard Property and (z) as to
whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program;
and (3) in the event that any such Flood Hazard Property is located
in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under
the applicable regulations of the Board of Governors of the Federal
Reserve System.
(ii) In the event that the pending sale of any of the
Properties listed on Schedule 6.11(a)(ii) is not consummated on or prior to
--------------------
the date that is 90 days after the Closing Date, Company will notify Agent
of that fact and promptly execute and deliver to Agent a fully executed and
notarized Mortgage, in proper form for recording in all appropriate places
in all applicable jurisdictions encumbering the interest of Company in such
Property and the opinions, appraisals, documents, title insurance and
environmental reports described in Section 6.11(a)(i) or that may be
reasonably required by Agent.
(iii) In the event that a contract of sale is not entered
into by Company within 120 days after the Closing Date with respect to any
of the Properties listed on Schedule 6.11(a)(iii), Company will notify
---------------------
Agent of that fact and promptly execute and deliver to Agent a fully
executed and notarized Mortgage, in proper form for recording in all
appropriate places in all applicable jurisdictions encumbering the interest
of Company in such Property and the opinions, appraisals, documents, title
insurance and environmental reports described in Section 6.11(a)(i) or that
may be reasonably required by Agent; provided, however, that in the event a
-------- -------
contract of sale is entered into with respect to any such Property during
such period and a sale is not consummated on or prior to the date that is
60 days after the execution of any such contract, Company will notify Agent
of that fact and promptly take the actions described above with respect to
such Property.
Notwithstanding the foregoing, in the event that any Property listed
on Schedule 6.11(a)(ii) or Schedule 6.11(a)(iii) becomes a Principal
-------------------- ---------------------
Property prior to the date on which a Mortgage with respect to such
Property is required to be delivered, Company shall have no obligation to
make the deliveries or take the actions set forth above with respect to
such Property.
(b) Insurance. On or prior to the date that is 30 days after the
---------
Closing Date, Company shall have delivered to Collateral Agent a certificate
from Company's insurance broker or other evidence satisfactory to Collateral
Agent that Collateral Agent on behalf of Banks has been named as additional
insured and/or loss payee under all insurance policies to the extent required
under Sections 5.16 and 6.6.
(c) Derivative/FX Contracts. On or prior to the date that is 60
-----------------------
days after the Closing Date, Company shall have delivered to Agent executed
copies of amendments to the existing master agreements pursuant to which Lender
Derivative/FX Contracts are issued
58
providing that the obligations of Company and FinServ under such agreements will
be secured by the Collateral Documents (as defined in the Bridge Credit
Agreement).
(d) Foreign Collateral. Company shall use its best efforts to take
------------------
or cause to be taken all such actions, execute and deliver or cause to be
executed and delivered all such agreements, documents and instruments and make
or cause to be made all such filings and recordings that may be necessary or, in
the opinion of Agent, desirable in order to create in favor of Collateral Agent,
for the benefit of Banks, a valid and perfected security interest in all foreign
registrations of IP Collateral and 65% of the Capital Stock owned by Company or
any Domestic Subsidiary of all Material Foreign Subsidiaries (other than the
Capital Stock of Restricted Subsidiaries).
(e) Intercompany Transactions. On or prior to the date that is 10
-------------------------
Business Days after the Closing Date, Company shall deliver a certificate
setting forth (i) all Indebtedness of Company to any of its Subsidiaries and of
any of its Subsidiaries to Company or any of its other Subsidiaries, and (ii)
all Investments by Company in any of its Subsidiaries and Investments of any of
its Subsidiaries in Company or any of its other Subsidiaries. On or prior to the
date that is 30 days after the Closing Date, Company shall deliver a fully
executed copy of an intercompany note evidencing all Indebtedness of Foreign
Subsidiaries to Domestic Subsidiaries that are Guarantors.
6.12 Transfer of Receivables. LSFCC shall sell to LSFLLC all accounts
-----------------------
receivable purchased by it from Company immediately upon consummation of such
purchase.
ARTICLE VII
NEGATIVE COVENANTS
------------------
Company covenants and agrees that, until full and final payment of all
Loans and other Obligations, unless Majority Banks waive compliance in writing,
Company shall, and shall cause each of its Subsidiaries to, perform and comply
with all covenants in this Article.
7.1 Indebtedness; Derivative/FX Contracts. Company shall not, and shall
-------------------------------------
not suffer or permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Indebtedness or Derivative/FX Contracts,
except
(a) Indebtedness of Company outstanding on the Closing Date and
listed on Schedule 7.1 and any refinancing of the industrial revenue bond
------------
obligations listed on Schedule 7.1 provided there is no increase in the
------------ --------
aggregate principal amount of such obligations;
(b) Indebtedness under the Loan Documents;
(c) Indebtedness arising from the honoring of a check, draft or
similar instrument against insufficient funds;
(d) Guaranty Obligations of Company guaranteeing the Indebtedness
of Material Foreign Subsidiaries permitted under Section 7.1(r);
59
(e) Indebtedness of Company and the other Borrower Parties under
the Amended and Restated 1997 364 Day Credit Agreement and the related loan
documents;
(f) Indebtedness of Company in respect of Capital Leases not
exceeding $5,000,000 in the aggregate at any time;
(g) Indebtedness of Company to any wholly-owned Subsidiary that is
a Guarantor and Indebtedness of any wholly-owned Domestic Subsidiary that is a
Guarantor to Company or any other wholly-owned Domestic Subsidiary that is a
Guarantor; provided that (i) all such intercompany Indebtedness shall be
--------
evidenced by promissory notes pledged to Agent on behalf of Banks, (ii) all such
intercompany Indebtedness owed by Company to any of its Subsidiaries shall be
subordinated in right of payment to the payment in full of the Obligations in
any Insolvency Proceeding pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, (iii) any payment by any
Subsidiary of Company under any guaranty of the Obligations shall result in a
pro tanto reduction of the amount of any intercompany Indebtedness owed by such
Subsidiary to Company or any of its Subsidiaries for whose benefit such payment
is made;
(h) Indebtedness of Pledged Foreign Subsidiaries to other Pledged
Foreign Subsidiaries;
(i) Indebtedness of Unpledged Foreign Subsidiaries to Pledged
Foreign Subsidiaries or other Unpledged Foreign Subsidiaries;
(j) Indebtedness of Company and its Subsidiaries (other than LSFCC
or LSFLLC) to FinServ and Indebtedness of FinServ to Company and its other
Subsidiaries (other than LSFCC or LSFLLC) in the ordinary course of business;
(k) other Indebtedness of Company to any of its Subsidiaries and
other Indebtedness of any of its Subsidiaries to Company or any of its other
Subsidiaries incurred after the date hereof; provided, however, that the sum of
-------- -------
(i) the aggregate principal amount of all such Indebtedness incurred after the
date hereof plus (ii) the aggregate Investments permitted by Section 7.11(j),
----
plus (iii) the aggregate Dispositions permitted by Section 7.3(j) shall not
----
exceed $50,000,000 in the aggregate during fiscal year 2000 or $100,000,000 in
the aggregate during fiscal year 2001;
(l) Derivative/FX Contracts between Company or FinServ and FinServ
and the other Subsidiaries of Company (other than LSFCC or LSFLLC) in the
ordinary course of business;
(m) Indebtedness of Company in the form of Securities issued in a
Capital Markets Transaction; provided (i) Company makes the prepayments required
--------
pursuant to Section 2.9, (ii) the stated maturity date of such Indebtedness is
not earlier than five years from the issuance thereof, and (iii) such
Indebtedness is unsecured;
(n) Indebtedness of Company and its Material Subsidiaries (other
than LSFCC or LSFLLC) secured by Liens permitted under Section 7.2(h) not
exceeding $25,000,000 in the aggregate at any time;
60
(o) Indebtedness of Company and its Subsidiaries in the form of
Permitted Receivables Purchase Facilities, provided Company and its Subsidiaries
--------
make the prepayment required pursuant to Section 2.9;
(p) Indebtedness of Company and its Subsidiaries in the form of
Real Estate Financing Transactions not exceeding the limitations in Section
7.2(m) at any time, provided Company and its Subsidiaries make the prepayment
--------
required pursuant to Section 2.9;
(q) Indebtedness of Company and its Subsidiaries in the form of
Equipment Financing Transactions not exceeding the limitations in Section 7.2(m)
at any time, provided Company and its Subsidiaries make the prepayment required
--------
pursuant to Section 2.9;
(r) (i) Indebtedness under the Bridge Credit Agreement and the
Amended and Restated 1999 180 Day Credit Agreement, (ii) unsecured Indebtedness
of Company and its Subsidiaries (other than LSFCC and LSFLLC), (iii) unsecured
reimbursement obligations of Company and its Subsidiaries (other than LSFCC and
LSFLLC) under letters of credit (other than Lender Letters of Credit), and (iv)
obligations of Company and its Subsidiaries (other than LSFCC and LSFLLC) under
secured and unsecured Ordinary Course Derivative/FX Contracts (other than Lender
Derivative/FX Contracts and intercompany Ordinary Course Derivative/FX
Contracts) not exceeding $750,000,000 in the aggregate at any time; provided,
--------
however, that the amount of the obligation under any Ordinary Course
-------
Derivative/FX Contract for purposes of this subsection 7.1(r) shall be the
Termination Value thereof times the Exposure Factor minus the undrawn face
----- -----
amount of any outstanding Lender Letter of Credit issued with respect to such
Ordinary Course Derivative/FX Contract;
(s) Indebtedness of Company to any of its Subsidiaries and other
Indebtedness of any of its Subsidiaries to Company or any of its other
Subsidiaries outstanding on the Closing Date and set forth on the certificate
delivered pursuant to Section 6.11(e); and
(t) other Indebtedness of Company and its Subsidiaries not
exceeding $5,000,000 in the aggregate at any time.
7.2 Limitation on Liens and Negative Pledges. Company shall not, and
----------------------------------------
shall not suffer or permit any of its Subsidiaries to, directly or indirectly,
incur, assume or suffer to exist any Lien or Negative Pledge upon any of their
Property, whether now owned or hereafter acquired, except:
(a) any Lien or Negative Pledge existing on the property of
Company or its Subsidiaries on the Closing Date and listed on Schedule 7.2;
------------
(b) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 6.5;
(c) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of
61
the Property subject thereto or if such reserve or other appropriate provision,
if any, required by GAAP shall have been made therefor;
(d) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(e) Liens securing (i) the performance of tenders, bids, trade
contracts (other than for borrowed money), government contracts, leases,
statutory obligations, and performance and return-of-money bonds, (ii)
contingent obligations on surety and appeal bonds, and (iii) other obligations
of a like nature; in each case, incurred in the ordinary course of business;
(f) Liens consisting of judgment or judicial attachment liens,
provided that the judgment secured by any such Lien shall, within 45 days after
--------
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within 45 days after the expiration of any
such stay and such Liens do not constitute an Event of Default;
(g) easements, rights-of-way, restrictions and other similar
encumbrances that do not interfere with the ordinary conduct of the businesses
of Company and its Subsidiaries;
(h) purchase money mortgages (including chattel mortgages) or
other purchase money liens or conditional sale or other title retention or
security agreements incurred by Company or any of its Material Subsidiaries
(other than LSFCC or LSFLLC) in connection with the acquisition or construction
of any real or personal property, or mortgages or liens or conditional sale or
other title retention agreements or security agreements existing on any such
property at the time of acquisition or construction or placed thereon within one
year of the acquisition or completion of construction thereof and any extension,
renewal or replacement of any such purchase money mortgage or lien in respect of
all or part of the same property; provided that the aggregate outstanding amount
--------
of Indebtedness secured by such Liens does not exceed $25,000,000 in the
aggregate at any time; provided still further that every such mortgage, lien or
--------
agreement shall apply only to the property originally subject thereto and fixed
improvements, if any, then existing or thereafter erected thereon;
(i) any interest or title of a lessor under any Capital or
Operating Lease permitted hereunder (other than any Equipment Financing
Transaction);
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
--------
dedicated cash collateral account and is not subject to restrictions against
access by Company or any of its Subsidiaries owning the affected deposit account
or other funds maintained with a creditor depository institution in excess of
those set forth by regulations promulgated by the Federal Reserve Board, and
(ii) such deposit account is not intended by Company or any of its Subsidiaries
to provide collateral to the depository institution;
(k) leases or subleases granted to others in the ordinary course
of business not interfering with the ordinary conduct of the business of the
grantor thereof;
62
(l) Liens attaching to ownership interests in joint ventures
(whether in partnership, corporate or other form) engaged in the LOS/DOS
Business or attaching to intellectual property rights relating to the LOS/DOS
Business;
(m) Liens created in connection with (i) Equipment Financing
Transactions and (ii) Real Estate Financing Transactions so long as (A) the
aggregate amount of all such transactions permitted by this Section 7.2(m) at
any time outstanding (as measured by the sum of all Indebtedness secured by such
Liens then outstanding or to be so created or assumed) shall not exceed
$175,000,000 and (B) Company shall cause, in connection therewith, the
prepayments of Loans required by Section 2.9;
(n) Liens created pursuant to applications or reimbursement
agreements pertaining to documentary letters of credit which encumber documents
and other property relating to such documentary letters of credit and the
products and proceeds thereof;
(o) Liens granted pursuant to the Collateral Documents;
(p) Liens securing (i) Indebtedness under the Bridge Credit
Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the
Amended and Restated 1997 364 Day Credit Agreement, and (ii) obligations under
Lender Derivative/FX Contracts;
(q) Liens securing Ordinary Course Derivative/FX Contracts
permitted by Section 7.1(r);
(r) other Liens so long as the aggregate outstanding amount of
Indebtedness secured by such Liens does not exceed $2,000,000 at any time;
(s) Negative Pledges on accounts receivables of Foreign
Subsidiaries and the associated assets of Foreign Subsidiaries in connection
with Permitted Foreign Receivable Purchase Facilities;
(t) Negative Pledges on Intellectual Property licensed from third
parties; and
(u) Negative Pledges with respect to specific property encumbered
to secure payment of particular Indebtedness permitted hereunder.
7.3 Dispositions. Company shall not, and shall not suffer or permit any
------------
of its Subsidiaries to, directly or indirectly, make any Dispositions, except:
(a) Dispositions of obsolete or worn out property, whether now
owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory by Company or any of Subsidiaries to
Company or any of its Subsidiaries in ordinary course of business arm's length
transactions;
(c) Dispositions of inventory in the ordinary course of business;
63
(d) Dispositions of accounts receivable from Company to LSFCC and
from LSFCC to LSFLLC;
(e) Dispositions of Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities, provided Company and its Subsidiaries make the
--------
prepayments required pursuant to Section 2.9;
(f) Dispositions of equipment pursuant to Equipment Financing
Transactions not exceeding the limitations in Section 7.2(m) at any time,
provided Company and its Subsidiaries make the prepayments required pursuant to
--------
Section 2.9;
(g) Dispositions of real property pursuant to Real Estate
Financing Transactions not exceeding the limitations in Section 7.2(m) at any
time, provided Company and its Subsidiaries make the prepayments required
--------
pursuant to Section 2.9;
(h) licenses of Intellectual Property in the ordinary course of
business;
(i) the Pending IceHouse Disposition;
(j) other Dispositions by Company to any of its Subsidiaries of
Property other than accounts receivable and other Dispositions by any of its
Subsidiaries to Company or any of its other Subsidiaries of Property other than
accounts receivable; provided, however, that the sum of (i) the fair market
-------- -------
value of the assets sold, transferred, licensed or otherwise disposed of plus
----
(ii) the aggregate principal amount of Indebtedness permitted by Section 7.1(k)
plus (iii) the aggregate Investments permitted by Section 7.11(j) shall not
----
exceed $50,000,000 in the aggregate during fiscal year 2000 or $100,000,000 in
the aggregate during fiscal year 2001;
(k) Asset Dispositions by Company and its Subsidiaries of Property
other than accounts receivable; provided that (i) at the time of any
--------
Disposition, no Event of Default shall exist or shall result from such
Disposition; (ii) the consideration received for such Disposition shall be in an
amount at least equal to the fair market value of the assets sold, transferred,
licensed or otherwise disposed of; (iii) the sole consideration received shall
be cash; (iv) the aggregate fair market value of all assets so sold,
transferred, licensed or otherwise disposed of by Company and its Subsidiaries
shall not exceed $50,000,000 in any fiscal year; and (v) Company and its
Subsidiaries make the prepayments required pursuant to Section 2.9;
(l) Dispositions of the Capital Stock of Domestic Subsidiaries
that are Guarantors to Company and wholly owned Domestic Subsidiaries that are
Guarantors; Dispositions of the Capital Stock of Pledged Foreign Subsidiaries to
Company, Domestic Subsidiaries that are Guarantors and other Pledged Foreign
Subsidiaries; and Dispositions of the Capital Stock of Unpledged Foreign
Subsidiaries to Company or any of its other Subsidiaries; and
(m) Dispositions of accounts receivable to collection agencies the
aggregate face amount of which does not exceed $2,000,000.
7.4 Fundamental Changes. Company shall not and shall not suffer or
-------------------
permit its Subsidiaries to, merge or consolidate with or into any Person or
liquidate, wind-up or dissolve
64
themselves, or permit or suffer any liquidation or dissolution or sell all or
substantially all of their respective assets, except that so long as no Default
or Event of Default exists or would result therefrom (a) any Domestic Subsidiary
may merge with or into Company or any other Domestic Subsidiary that is a
Guarantor or be liquidated, wound up or dissolved or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of to Company or any other Domestic Subsidiary that is a
Guarantor, provided that, in the case of a merger, Company or such Guarantor, as
--------
the case may be, shall be the continuing or surviving corporation; (b) any
Pledged Foreign Subsidiary may merge with or into any other Pledged Foreign
Subsidiary or be liquidated, wound up or dissolved or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of to Company or any other Pledged Foreign Subsidiary; (c)
any Unpledged Foreign Subsidiary may merge with or into any other Unpledged
Foreign Subsidiary or any Pledged Foreign Subsidiary or be liquidated, wound up
or dissolved or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of to any other
Unpledged Foreign Subsidiary or a Pledged Foreign Subsidiary, provided that, in
--------
the case of a merger, such Pledged Foreign Subsidiary shall be the continuing or
surviving corporation; and (d) Company and its Subsidiaries may make Asset
Dispositions permitted by Section 7.3(k).
7.5 Use of Proceeds.
---------------
(a) Company shall not use any portion of the Loan proceeds
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance Indebtedness of Company or others incurred to purchase or
carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Sections 13 or 14 of the Exchange Act.
(b) Company shall not, directly or indirectly, use any portion of
the proceeds of the Loans (i) knowingly to purchase Ineligible Securities from
the Arranger during any period in which the Arranger makes a market in such
Ineligible Securities, (ii) knowingly to purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of Company or any Affiliate of Company. The Arranger is a registered
broker-dealer and permitted to underwrite and deal in certain Ineligible
Securities.
65
7.6 Leverage Ratio. Company shall not permit the Leverage Ratio on the
--------------
last day of any period set forth below to be more than the correlative amount
indicated:
PERIOD LEVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 6.00 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
Fiscal Year 2000 5.75 to 1.00
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 5.25 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 5.00 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 4.50 to 1.00
Fiscal Year 2001 4.25 to 1.00
7.7 Interest Coverage Ratio. Company shall not permit the Interest
-----------------------
Coverage Ratio for any period set forth below to be less than the correlative
amount indicated:
INTEREST
PERIOD COVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 1.6 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 1.6 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 1.7 to 1.00
Fiscal Year 2000 1.8 to 1.00
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 1.9 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 2.0 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 2.1 to 1.00
Fiscal Year 2001 2.2 to 1.00
66
7.8 Minimum Consolidated EBITDA. Company shall not permit Consolidated
---------------------------
EBITDA for any period set forth below to be less than the correlative amount
indicated:
MINIMUM
PERIOD CONSOLIDATED EBITDA
------ -------------------
($ in millions)
First Fiscal Quarter of Fiscal Year 2000 $ 102
First Two Fiscal Quarter Period of Fiscal Year 2000 $ 205
First Three Fiscal Quarter Period of Fiscal Year 2000 $ 320
Fiscal Year 2000 $ 440
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 $ 465
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 $ 490
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 $ 510
Fiscal Year 2001 $ 540
7.9 Change in Business. Company shall not, and shall not suffer or
------------------
permit any of its Subsidiaries to, engage in any business not related or
incidental to the manufacture and sale of clothing and accessories. The LOS/DOS
Business is a business that is related or incidental to the manufacture and sale
of clothing within the meaning of the preceding sentence. Company shall not
suffer or permit LSFLLC to engage in any business other than the purchase and
holding of accounts receivable and shall not suffer or permit LSFCC to engage in
any business other than the purchase and servicing of accounts receivable
generated by Company, the processing of accounts payable of Company and its
Subsidiaries, and other accounting and general customer relationship functions.
7.10 ERISA. Company shall not, and shall not permit or suffer any of its
-----
Subsidiaries or ERISA Affiliates to:
(a) engage in any transaction in connection with which Company or
any of its Subsidiaries or any of their respective ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) or 502(l)
of ERISA or a tax imposed by Section 4975 of the Code, in either case in an
amount in excess of $5,000,000;
(b) fail to make full payment within five Business Days after the
date when due of all amounts exceeding $5,000,000 which, under the provisions of
any Pension Plan, Company or any of its Subsidiaries or any of their respective
ERISA Affiliates is required to pay as contributions thereto, or (as to any
Subsidiary organized under the laws of any of the United States) permit to exist
any accumulated funding deficiency, whether or not waived, with respect to any
Pension Plan in an aggregate amount greater than $5,000,000;
67
(c) permit the Funded Current Liability Percentage for any Pension
Plan to be less than 90%; or
(d) fail to make any payments in an aggregate amount greater than
$5,000,000 to any Multiemployer Plan that Company or any of its Subsidiaries, or
any of their respective ERISA Affiliates may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto.
As used in this Section, the term "accumulated funding
deficiency" has the meaning specified in Section 3(23) of ERISA and Section 412
of the Code and the term "accrued benefit" has the meaning specified in Article
3 of ERISA.
7.11 Investments. Company shall not, and shall not suffer or permit any
-----------
of its Subsidiaries to, directly or indirectly, make any Investments, or
acquire, by purchase or otherwise, all or substantially all the business,
property or fixed assets of, or stock or other ownership interest of any Person,
or any division or line of business of, any Person except:
------
(a) Investments existing on the Closing Date and listed on
Schedule 7.11;
-------------
(b) cash and cash equivalents;
(c) advances to officers, directors and employees of Company or
any of their respective Subsidiaries for travel, entertainment, relocation and
analogous ordinary business purposes;
(d) extensions of credit to customers or suppliers of Company or
any of its Subsidiaries in the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof;
(e) Investments permitted by Section 7.4;
(f) intercompany loans permitted by Sections 7.1(g), 7.1(h),
7.1(i), and 7.1(j);
(g) Investments by Company in any wholly-owned Subsidiary that is
a Guarantor and Investments of any wholly-owned Domestic Subsidiary that is a
Guarantor in Company or any other wholly-owned Domestic Subsidiary that is a
Guarantor;
(h) Investments by Pledged Foreign Subsidiaries in other Pledged
Foreign Subsidiaries;
(i) Investments by Unpledged Foreign Subsidiaries in other
Unpledged Foreign Subsidiaries;
(j) other Investments by Company in any of its Subsidiaries and
other Investments of any of its Subsidiaries in Company or any of its other
Subsidiaries made after the date hereof; provided, however, that (i) such
-------- -------
Investments plus (ii) the aggregate principal amount of Indebtedness permitted
----
by Section 7.1(k) plus (iii) the aggregate Dispositions permitted by Section
----
7.3(j) shall not exceed $50,000,000 in the aggregate during fiscal year 2000 or
68
$100,000,000 in the aggregate during fiscal year 2001; provided further that
-------- -------
Investments in Subsidiaries of Company that are not Solvent immediately prior to
the making of any such Investment shall not exceed $10,000,000 in the aggregate
in any fiscal year;
(k) Investments by Company in any of its Subsidiaries and other
Investments of any of its Subsidiaries in Company or any of its other
Subsidiaries on the Closing Date and set forth on the certificate delivered
pursuant to Section 6.11(e); and
(l) other Investments not exceeding $25,000,000 at any time.
7.12 Restricted Payments. Company shall not, and shall not permit or
-------------------
suffer any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Payment other than (a) payments of
Indebtedness in connection with Asset Dispositions as contemplated by the
definition of Net Asset Disposition Proceeds or Equipment Financing Transactions
as contemplated by the definition of Net Equipment Financing Proceeds and (b)
repayments and prepayments of Indebtedness under the Bridge Credit Agreement,
the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and
Restated 1997 364 Day Credit Agreement.
7.13 Operating Lease Obligations. Company shall not, and shall not suffer
---------------------------
or permit any of its Subsidiaries to, directly or indirectly, create or suffer
to exist any obligations for the payment of rent for any property under
Operating Leases, except:
------
(a) Operating Leases in existence on the Closing Date; and
(b) Operating Leases entered into or assumed by Company or any
Subsidiary after the date hereof in the ordinary course of business.
7.14 Transactions with Affiliates. Company shall not, and shall not
----------------------------
suffer or permit any of its Subsidiaries to directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
Company other than arm's-length transactions with Affiliates that are otherwise
not prohibited hereunder.
7.15 Amendments of Documents Relating to Indebtedness and Receivables.
----------------------------------------------------------------
(a) Company shall not, and shall not suffer or permit any of its
Subsidiaries to, amend or otherwise change the terms of any Indebtedness (other
than Indebtedness under the Bridge Credit Agreement, the Amended and Restated
1999 180 Day Credit Agreement or the Amended and Restated 1997 364 Day Credit
Agreement), or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate or make less onerous any such event or default or increase any grace
period related thereto), change the redemption, prepayment or defeasance
provisions thereof, or change any collateral therefor (other than to release
such collateral), or if the effect of such amendment or change, together with
all other amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any
69
additional rights on the holders of such Indebtedness (or a trustee or other
representative on their behalf) which would be materially adverse to Company or
to Banks. Company shall not amend or otherwise change the terms of the Bridge
Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the
Amended and Restated 1997 364 Day Credit Agreement without the written consent
of Majority Banks if the effect of such amendment is to extend the stated
maturity date thereof or increase the aggregate commitments thereunder. Company
shall not amend or otherwise change the terms of the Bridge Credit Agreement,
the Amended and Restated 1999 180 Day Credit Agreement or the Amended and
Restated 1997 364 Day Credit Agreement to provide for an earlier stated maturity
date unless this Agreement is amended to provide for the same maturity date.
(b) Company shall not, and shall not suffer or permit any of its
Subsidiaries to, amend or otherwise change the terms of the Receivables Transfer
Agreements other than amendments to extend the term thereof or to preserve the
arm's length nature of the purchase and sale effected thereby.
7.16 Consolidated Capital Expenditures. Company shall not, and shall not
---------------------------------
suffer or permit any of its Subsidiaries to make or incur Consolidated Capital
Expenditures, in any fiscal year indicated below, in an aggregate amount in
excess of the corresponding amount set forth below opposite such fiscal year:
MAXIMUM CAPITAL
FISCAL YEAR EXPENDITURES
----------- ------------
2000 $60,000,000
2001 $60,000,000
7.17 Materially Adverse Agreements. Company shall not, and shall not
-----------------------------
suffer or permit any of its Subsidiaries to, become a party to or become subject
to any material agreement or instrument or charter or other internal restriction
which (in the aggregate as to all such matters) would have a Material Adverse
Effect.
7.18 Limitations on Upstreaming. Company shall not, and shall not suffer
--------------------------
or permit any of its Subsidiaries to, agree to any restriction or limitation on
the making of Restricted Payments or transferring of assets from any Subsidiary
to its parent except pursuant to this Agreement, the Bridge Credit Agreement,
the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and
Restated 1997 364 Day Credit Agreement.
7.19 Change in Auditors. Company shall not terminate the certified public
------------------
accountants auditing the books of Company or any of its Subsidiaries unless
Company shall have informed Agent of the reason for the termination and selected
new certified public accountants of recognized national standing and reasonably
satisfactory to Agent.
70
7.20 Restricted Subsidiaries. Company shall not permit any of its
-----------------------
Subsidiaries existing as of the Closing Date to become a Restricted Subsidiary
other than as a result of a change in Consolidated Net Tangible Assets.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
8.1 Event of Default. Any of the following shall constitute an "Event of
----------------
Default":
(a) Non-Payment. Company fails to pay, (i) when and as required to
-----------
be paid herein, any amount of principal of any Loan or (ii) within three
Business Days after the same becomes due, any other interest, fee or any other
amount payable hereunder or under any other Loan Document; or
(b) Cross Default. Failure of Company or any of its Subsidiaries
-------------
to pay, or any default in the payment of, any principal, interest or any other
amount on any Indebtedness or Derivative/FX Contract beyond any period of grace
provided; or breach or default with respect to any other material term of any
evidence of any Indebtedness or Derivative/FX Contract, or of any loan
agreement, mortgage, indenture or other agreement relating thereto, if such
breach or default continues beyond any applicable period of grace provided, if
and for so long as the effect of such failure, default or breach is to cause or
permit the holder or holders of that Indebtedness or Derivative/FX Contract (or
a trustee on behalf of such holder or holders) to cause, with or without the
giving of notice, that Indebtedness or Derivative/FX Contract to become or be
declared due prior to its stated maturity; provided, however, that this
-------- -------
subsection shall not apply with respect to Indebtedness and Derivative/FX
Contracts, the aggregate principal amount of which or the Termination Value of
which, as the case may be, does not exceed $25,000,000 in the aggregate; or
(c) Representation or Warranty. Any representation or warranty
--------------------------
made by any Borrower Party herein or in any other Loan Document or any
representation or warranty in any statement or certificate at any time given by
any Borrower Party in writing pursuant to any of the Loan Documents or in
connection herewith shall be false in any material respect on the date as of
which made; or
(d) Specific Defaults. Failure to perform or observe any term,
-----------------
covenant or agreement contained in Section 6.8 or Article VII; or
(e) Other Defaults. Failure to perform or observe any term,
--------------
covenant or agreement contained in this Agreement or any other Loan Document and
such default shall not have been remedied or waived within 30 days after receipt
of notice from Agent or any Bank of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc.
-----------------------------------------------------
(i) A court having jurisdiction shall enter a decree or
order for relief in respect of Company or any of its Material Subsidiaries
in an involuntary case under any
71
applicable Debtor Relief Laws, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable Debtor Relief
Laws; or
(ii) A decree or order of a court having jurisdiction for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over Company or any of its Material
Subsidiaries or over all or a substantial part of their property, shall
have been entered; or the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Material Subsidiaries
for all or a substantial part of their property; or the issuance of a
warrant of attachment, execution or similar process against any substantial
part of the property of Company or any of its Material Subsidiaries, and
the continuance of any such events described in this subsection (f)(ii) for
60 days unless stayed, dismissed, bonded or discharged; or
(iii) an involuntary case under any applicable Debtor Relief
Laws shall have been commenced against Company or any of its Material
Subsidiaries and shall not have been dismissed within 60 days after the
commencement of such case; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. Company or
---------------------------------------------------
any of its Material Subsidiaries shall commence a voluntary case under any
applicable Debtor Relief Laws, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such Debtor Relief Laws, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of their property; the making by Company or any of
its Material Subsidiaries of any assignment for the benefit of creditors; or the
inability or failure of Company or any of its Material Subsidiaries or the
admission by Company or any of its Material Subsidiaries in writing of their
inability to pay their debts as such debts become due; or the Board of Directors
of Company or any of its Material Subsidiaries (or any committee thereof) adopts
any resolution or otherwise authorizes action to approve any of the foregoing;
or
(h) Judgments and Attachments. Any money judgment, writ or warrant
-------------------------
of attachment, or similar process involving in any case an amount in excess of
$10,000,000 in excess of available insurance coverage as to which the insurer
has not denied coverage shall be entered or filed against Company or any of its
Material Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded and unstayed for a period of 45 days or in any
event later than five days prior to the date of any proposed sale thereunder; or
(i) Unfunded ERISA Liabilities. Any Pension Plan maintained by
--------------------------
Company or any of its ERISA Affiliates shall be terminated within the meaning of
Title IV of ERISA or a trustee shall be appointed by an appropriate United
States district court to administer any Pension Plan, or the PBGC (or any
successor thereto) shall institute proceedings to terminate any Pension Plan or
to appoint a trustee to administer any Pension Plan, and, in each case,
Company's or any such ERISA Affiliate's liability (after giving effect to the
tax consequences thereof) as of the date thereof to the PBGC (or any successor
thereto) for unfunded guaranteed vested benefits under such Pension Plan or
Company's obligations to contribute to any Pension Plan in order to voluntarily
terminate such Pension Plan exceed $20,000,000 (or in the case of a termination
involving Company or any of its ERISA Affiliates as a "substantial employer" (as
defined in
72
Section 4001(a)(2) of ERISA) the withdrawing employer's proportionate share of
such liability shall exceed such amount); or
(j) Withdrawal Liability Under Multiemployer Plan. Company or any
---------------------------------------------
of its ERISA Affiliates as employer under a Multiemployer Plan shall have made a
complete or partial withdrawal from such Multiemployer Plan and the plan sponsor
of such Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an amount exceeding
$20,000,000; or
(k) Change of Control. (i) Any person or two or more persons
-----------------
(other than Permitted Transferees) acting in concert shall acquire beneficial
ownership, directly or indirectly, of Securities of Company or Voting Trust
Certificates issued under the Voting Trust Agreement (or other securities
convertible into such securities) representing 30% or more of the combined
voting power of all Securities of Company entitled to vote (or would be entitled
to vote in the absence of the Voting Trust Agreement) in the election of
directors (except that the provisions of this subsection (i) shall not apply to
Voting Trustees serving in their capacities as such under the Voting Trust
Agreement); or (ii) during any period of up to 12 consecutive months, commencing
after the Closing Date, individuals who at the beginning of such 12 month period
were directors of Company shall cease for any reason to constitute a majority of
the Board of Directors of Company unless the persons replacing such individuals
were nominated by the Board of Directors of Company, by Permitted Transferees or
by any of the Voting Trustees; or
(l) Failure to Deliver Certain Loan Documents; Invalidity of
--------------------------------------------------------
Guaranties; Failure of Security; Repudiation of Obligations. The Guaranty or the
-----------------------------------------------------------
Pledge and Security Agreement shall not be executed and delivered by the
Material Domestic Subsidiaries on or prior to the day following the Closing
Date. At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations, shall cease
to be in full force and effect (other than in accordance with its terms) or
shall be declared to be null and void, (ii) any Collateral Document shall cease
to be in full force and effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the satisfaction in
full of the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and void
by a court of competent jurisdiction, or Collateral Agent shall not have or
shall cease to have a valid and perfected Lien in any Collateral (other than
Inventory in the possession or control of Company's agents or processors)
purported to be covered thereby having a fair market value, individually or in
the aggregate, exceeding $5,000,000, in each case for any reason other than the
failure of Agent or any Bank to take any action within its control, or (iii) any
Borrower Party shall contest the validity or enforceability of any Loan Document
in writing or deny in writing that it has any further liability, including with
respect to future advances by Banks, under any Loan Document to which it is a
party.
8.2 Remedies. If any Event of Default occurs, Agent shall, at the
--------
request of, or may, with the consent of, Majority Banks,
(a) declare the Commitment of each Bank to be terminated,
whereupon such Commitments shall forthwith be terminated;
73
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable;
without presentment, demand, request, protest or other notice of any kind, all
of which are hereby expressly waived by Company;
(c) exercise on behalf of itself and Banks all rights and remedies
available to it and Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in Section
-------- -------
8.1(f) or (g) above (after the expiration of any grace or cure period provided
therein), the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable
without further act of Agent or any Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and
--------------------
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
No Bank may exercise any rights or remedies with respect to the Obligations
without the consent of Majority Banks in their sole and absolute discretion. The
order and manner in which Agent's and Banks' rights and remedies are to be
exercised shall be determined by Majority Banks in their sole and absolute
discretion. Regardless of how a Bank may treat payments for the purpose of its
own accounting, for the purpose of computing the Obligations hereunder, payments
shall be applied first, to costs and expenses (including Professional Costs)
incurred by Agent and each Bank, second, to the payment of accrued and unpaid
interest on the Loans to and including the date of such application, third, to
the payment of the unpaid principal of the Loans, and fourth, to the payment of
all other amounts (including fees) then owing to Agent and Banks under the Loan
Documents, in each case paid pro rata to each Bank in the same proportions that
the aggregate Obligations owed to each Bank under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all Banks, without
priority or preference among Banks. No application of payments will cure any
Event of Default, or prevent acceleration, or continued acceleration, of amounts
payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of Agent and Banks hereunder or thereunder or at
law in equity.
ARTICLE IX
AGENT; COLLATERAL AGENT
-----------------------
9.1 Appointment and Authorization. Each Bank hereby irrevocably (subject
-----------------------------
to Section 9.9) appoints, designates and authorizes Agent and Collateral Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, neither Agent nor Collateral Agent
shall have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent or Collateral Agent have or be deemed to have any
fiduciary relationship with any Bank, and no implied covenants,
74
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against Agent
or Collateral Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" in this Agreement with reference to Agent or
Collateral Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
9.2 Delegation of Duties. Agent and Collateral Agent may execute any of
--------------------
their respective duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. Neither Agent nor
Collateral Agent shall be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects in the absence of gross negligence or
willful misconduct.
9.3 Liability of Agent or Collateral Agent. No Agent-Related Person or
--------------------------------------
Collateral Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any of Banks
for any recital, statement, representation or warranty made by any Borrower
Party or any Subsidiary or Affiliate of any Borrower Party, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent or Collateral Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower Party or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person or Collateral Agent-Related Person shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the Properties, books or
records of any Borrower Party, or any of Company's Subsidiaries or Affiliates.
9.4 Reliance by Agent and Collateral Agent.
--------------------------------------
(a) Agent and Collateral Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to Company), independent accountants and other
experts selected by Agent or Collateral Agent. Agent and Collateral Agent shall
be fully justified in failing or refusing to take any action under any Loan
Document unless Agent or Collateral Agent, as the case may be, shall first
receive such advice or concurrence of Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Agent shall in all cases
be fully protected in acting, or in
75
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of Majority Banks (or all of Banks if
required hereunder) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of Banks. Where this agreement
expressly permits or prohibits an action unless Majority Banks otherwise
determine, and in all other instances, Agent or Collateral Agent, as the case
may be, may, but shall not be required to, initiate any solicitation for the
consent or a vote of Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Bank shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
either sent by Agent or Collateral Agent to such Bank for consent, approval,
acceptance, or satisfaction, required thereunder to be consented to or approved
by or acceptable or satisfactory to the Bank.
9.5 Notice of Default. Neither Agent nor Collateral Agent shall be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except that Agent shall be deemed to have knowledge with respect to
defaults in the payment of principal, interest and fees required to be paid to
Agent for the account of Banks, unless Agent shall have received written notice
from a Bank or Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". Agent
will notify Banks of its receipt of any such notice. Agent shall take such
action with respect to such Default or Event of Default as may be directed by
Majority Banks in accordance with Article VIII; provided, however, that unless
-------- -------
and until Agent has received any such direction, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of Banks.
9.6 Credit Decision; Disclosure of Information by Agent and Collateral
------------------------------------------------------------------
Agent Each Bank acknowledges that no Agent-Related Person or Collateral Agent-
-----
Related Person has made any representation or warranty to it, and that no act by
Agent or Collateral Agent hereinafter taken, including any consent to and
acceptance of any assignment or review of the affairs of Company or any of its
Subsidiaries or Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person or Collateral Agent-Related Person to any
Bank as to any matter, including whether Agent-Related Persons or Collateral
Agent-Related Persons have disclosed material information in their possession.
Each Bank, including any Bank by assignment, represents to Agent that it has,
independently and without reliance upon any Agent-Related Person or Collateral
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Company and its Subsidiaries and Affiliates, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Company hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person or Collateral
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decision in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business prospects, operations, property, financial
and other condition and creditworthiness of Company and its Subsidiaries and
Affiliates. Except for notices, reports and other documents expressly required
to be furnished to Banks by Agent or
76
Collateral Agent herein, neither Agent or Collateral Agent shall have any duty
or responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Company or any of its Subsidiaries or
Affiliates which may come into the possession of any Agent Related Person or any
Collateral Agent-Related Person.
9.7 Indemnification of Agent and Collateral Agent. Whether or not the
---------------------------------------------
transactions contemplated hereby are consummated, Banks shall indemnify upon
demand each Agent-Related Person and each Collateral Agent-Related Person (to
the extent not reimbursed by or on behalf of any Borrower Party and without
limiting the obligation of any Borrower Party to do so), pro rata, and hold
harmless each Agent Related Person and each Collateral Agent-Related Person from
and against any and all Indemnified Liabilities incurred by it; provided,
--------
however, that no Bank shall be liable for the payment to any Agent-Related
-------
Person or any Collateral Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of
-------- -------
Majority Banks shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Bank shall reimburse Agent and Collateral Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Professional Costs)
incurred by Agent and Collateral Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or financial
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent or Collateral Agent is not reimbursed for such expenses
by or on behalf of Company. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of Agent
or Collateral Agent.
9.8 Agent in Individual Capacity. Bank of America and its Affiliates may
----------------------------
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with Company and its
Subsidiaries and Affiliates as though Bank of America were not Agent or
Collateral Agent hereunder and without notice to or consent of Banks. Banks
acknowledge that as of the date of execution of this Agreement, Bank of America
has outstanding unsecured loans to Company that will be refinanced from the
proceeds of loans made under the Bridge Credit Agreement. In addition, Banks
acknowledge that Bank of America has been appointed administrative agent and
collateral agent under the Bridge Credit Agreement, the Amended and Restated
1999 180 Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit
Agreement and that the lenders party to those agreements have been granted a
Lien on the Collateral that is subordinated to the Lien granted to Banks
pursuant to the Intercreditor Agreement. Bank of America or its Affiliates may
receive information regarding Company and its Subsidiaries and Affiliates
(including information that may be subject to confidentiality obligations in
favor of Company, such Subsidiary or such Affiliate or information relating to
the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit
Agreement or the Amended and Restated 1997 364 Day Credit Agreement) as a result
of the activities described above and Banks acknowledge that Agent or Collateral
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, Bank of America shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same as
77
though it were not Agent or Collateral Agent, and the terms "Bank" and "Banks"
shall include Bank of America in its individual capacity.
9.9 Successor Agent. Agent may, and at the request of Majority Banks
---------------
shall, resign as Agent upon 30 days' notice to Company and Banks. If Agent
resigns under this Agreement, Majority Banks shall appoint from among Banks a
successor agent for Banks which successor agent shall be consented to by Company
at all times other than during the existence of an Event of Default (which
approval of Company shall not be unreasonably withheld or delayed). If no
successor agent is appointed prior to the effective date of the resignation of
Agent, Agent may appoint, after consulting with Banks and Company, a successor
agent from among Banks. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.4 and 10.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and Banks shall perform all of the duties of Agent hereunder until such time, if
any, as Majority Banks appoint a successor agent as provided for above.
Notwithstanding the foregoing, Bank of America may not be removed as Agent at
the request of Majority Banks unless Bank of America shall also simultaneously
be replaced as "Collateral Agent" hereunder pursuant to documentation in form
and substance reasonably satisfactory to Bank of America.
9.10 Successor Collateral Agent. Collateral Agent may, and at the request
--------------------------
of Majority Banks shall, resign as Collateral Agent upon 30 days' notice to
Company and Banks. If Collateral Agent resigns under this Agreement, Majority
Banks shall appoint from among Banks a successor collateral agent for Banks
which successor collateral agent shall be consented to by Company at all times
other than during the existence of an Event of Default (which approval of
Company shall not be unreasonably withheld or delayed). If no successor
collateral agent is appointed prior to the effective date of the resignation of
Collateral Agent, Collateral Agent may appoint, after consulting with Banks and
Company, a successor collateral agent from among Banks. Upon the acceptance of
its appointment as successor collateral agent hereunder, such successor
collateral agent shall succeed to all the rights, powers and duties of the
retiring Collateral Agent and the term "Collateral Agent" shall mean such
successor collateral agent and the retiring Collateral Agent's appointment,
powers and duties as Collateral Agent shall be terminated. After any retiring
Collateral Agent's resignation hereunder as Collateral Agent, the provisions of
this Article IX and Sections 10.4 and 10.5 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement. If no successor collateral agent has accepted appointment as
Collateral Agent by the date which is 30 days following a retiring Collateral
Agent's notice of resignation, the retiring Collateral Agent's resignation shall
nevertheless thereupon become effective and Banks shall perform all of the
duties of Collateral Agent hereunder until such time, if any, as Majority Banks
appoint a successor agent as provided for above. Notwithstanding the foregoing,
Bank of America may not be removed as Collateral Agent at the request of
Majority Banks unless Bank of America shall also simultaneously be replaced as
"Agent" hereunder pursuant to documentation in form and substance reasonably
satisfactory to Bank of America.
78
9.11 Withholding Tax.
---------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of Agent, to deliver to Agent and Company:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed copies of IRS Form 1001 (or any successor form)
before the payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Bank,
two properly completed and executed copies of IRS Form 4224 (or any
successor form) before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of such Bank
during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 (or
any successor form) and such Bank sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Company to such Bank, such
Bank agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Company to such Bank. To the extent of
such percentage amount, Agent will treat such Bank's IRS Form 1001 (or any
successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 (or any successor form) with Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Bank an
amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to Agent, then Agent may
withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
79
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify Agent fully for all amounts paid, directly or
indirectly, by Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section, together with all costs and expenses (including Professional
Costs). The obligation of Banks under this subsection shall survive the payment
of all Obligations and the resignation or replacement of Agent.
9.12 Co-Agents; Managing Agents. None of the Banks identified on the
--------------------------
facing page or signature pages of this Agreement as a "Senior Managing Agent", a
"Managing Agent", or a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, none of Banks
so identified as a "Senior Managing Agent", a "Managing Agent", or a "Co-Agent"
shall have or be deemed to have any fiduciary relationship with any Bank. Each
Bank acknowledges that it has not relied, and will not rely, on any of the Banks
so identified in deciding to enter into this Agreement or in taking or not
taking action hereunder.
9.13 Collateral Documents, Guaranties and Intercreditor Agreement. Each
------------------------------------------------------------
Bank hereby further authorizes Collateral Agent, on behalf of and for the
benefit of Banks, to enter into each Collateral Document as secured party and
hereby authorizes Agent, on behalf of and for the benefit of Banks, to enter
into each Guaranty and the Intercreditor Agreement, and each Bank agrees to be
bound by the terms of each Collateral Document, each Guaranty and the
Intercreditor Agreement; provided, however, that neither Agent nor Collateral
-------- -------
Agent shall (a) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
Guaranty or (b) release any Collateral without the prior consent of Majority
Banks, Requisite Banks or all Banks, as provided in Section 10.21; provided,
--------
however, that, without further written consent or authorization from Banks,
-------
Agent or Collateral Agent, as the case may be, may execute any documents or
instruments necessary to (i) release any Lien encumbering any item of Collateral
that is the subject of a Capital Lease, Equipment Financing Transaction, Real
Estate Financing Transaction, Permitted Receivables Purchase Facility or sale or
other disposition of assets permitted by Section 7.3, (ii) release any Guarantor
from a Guaranty if all of the Capital Stock of such Guarantor is sold to any
Person (other than an Affiliate of Company) pursuant to a sale or other
disposition permitted by Section 7.3, or (iii) subordinate the Liens of
Collateral Agent, on behalf of Banks, to any Lien permitted hereunder. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
Agent, Collateral Agent and each Bank hereby agree that (A) no Bank shall have
any right individually to realize upon any of the Collateral under any
Collateral Document or to enforce any Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Guaranties may be exercised solely by Agent or Collateral Agent for the benefit
of Banks in accordance with the terms thereof, and (B) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Agent, Collateral Agent or any Bank may be the purchaser of any or
all of such Collateral at any such sale and Agent, as agent for and
representative of Banks (but not any Bank or Banks in its or their respective
individual capacities unless Majority Banks shall otherwise
80
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by Agent
at such sale.
ARTICLE X
MISCELLANEOUS
-------------
10.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document, and no consent with respect to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Banks and the Company and acknowledged by the Agent, and
then such waiver, amendment or consent shall be effective only in the specific
instance and for the specific purpose for which given, except that written
agreement from all of the Banks is required for any waiver, amendment, or
consent which does any of the following:
(a) increases or extends the Commitment of any Bank or reinstates
any Commitment terminated pursuant to Section 8.2;
(b) postpones, extends or delays any date fixed for any payment of
principal, interest, fees or other amounts due to the Banks (or any of them)
hereunder or under any Loan Document;
(c) reduces the principal of, or the rate of interest specified
herein on any Loan, or of any fees or other amounts payable hereunder or under
any Loan Document or any mandatory reduction of the Aggregate Commitment
pursuant to Section 2.9;
(d) changes the Commitment Percentage or the aggregate unpaid
principal amount of the Loans which shall be required for the Banks or any of
them to take any action hereunder;
(e) changes the definition of Majority Banks or the number of
Banks required to take any action under this Agreement; or
(f) amends this Section 10.1 or Sections 2.14 or 2.15 or 2.16;
and, provided that no amendment, waiver or consent shall, unless in writing and
--------
signed by the Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Agent under this Agreement or
any other Loan Document.
10.2 Notices.
-------
(a) Unless otherwise specifically provided in this Agreement, all
notices, requests and other communications provided for hereunder shall be in
writing (including, unless the context expressly otherwise provides,
telegraphic, telex, facsimile transmission or cable communication, provided that
--------
any matter transmitted by facsimile transmission shall be followed promptly by a
hard copy original thereof) and mailed, telegraphed, telexed, sent by facsimile
81
transmission, or delivered, to the address or number specified for notices on
the applicable signature page hereof; or, as to Company or Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as to each other party, at such other address as shall be
designated by such party in a written notice to Company and Agent.
(b) All such notices and communications shall, when transmitted by
overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be
effective when delivered for overnight delivery or to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, or if delivered, upon delivery, except that notices
pursuant to Articles II or IX shall not be effective until actually received by
Agent.
(c) Company acknowledges and agrees that any agreement of Agent
and Banks in Article II to receive certain notices by telephone and facsimile is
solely for the convenience and at the request of Company. Agent and Banks shall
be entitled to rely on the authority of any Person purporting to be a Person
authorized by Company to give such notice and Agent and Banks shall not have any
liability to Company or other Person on account of any action taken or not taken
by Agent and Banks in reliance upon such telephonic or facsimile notice. The
obligation of Company to repay the Loans shall not be affected in any way or to
any extent by any failure by Agent and Banks to receive written confirmation of
any telephonic or facsimile notice or the receipt by Agent and Banks of a
confirmation which is at variance with the terms understood by Agent and Banks
to be contained in the telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
10.4 Costs and Expenses. Company agrees to:
------------------
(a) Whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Agent) promptly after demand, for all reasonable costs and expenses incurred by
Bank of America (including in its capacity as Agent) in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Professional Costs and
other professional fees incurred by Bank of America (including in its capacity
as Agent) with respect thereto;
(b) Subject to the limitations set forth therein, pay or reimburse
Agent promptly after demand, for all reasonable costs and expenses incurred by
Agent (including the fees, expenses and disbursements of any auditors,
accountants, advisors and agents employed or retained by Agent or its counsel)
in connection with obtaining and reviewing the information provided under
Section 6.1 or 6.7;
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(c) Pay or reimburse Agent, Collateral Agent, the Arranger and
each Bank within five Business Days after demand, for all costs and expenses
(including Professional Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding);
(d) Pay or reimburse Agent and Collateral Agent promptly after
demand, for all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Collateral Agent on behalf of Banks pursuant to any
Collateral Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Agent and Collateral
Agent and of counsel providing any opinions that Agent, Collateral Agent or
Majority Banks may request in respect of the Collateral Documents or the Liens
created pursuant thereto; and
(e) Pay or reimburse Collateral Agent promptly after demand, for
all reasonable costs and expenses incurred by Collateral Agent in connection
with the custody and preservation of the Collateral.
10.5 Company's Indemnification. Whether or not the transactions
-------------------------
contemplated hereby are consummated, Company shall indemnify, defend and hold
Agent-Related Persons, Collateral Agent-Related Persons and each Bank and each
of its respective officers, directors, employees, counsel, agents, attorneys-in-
fact and Affiliates (each, an "Indemnified Person") harmless from and against
------------------
any and all claims, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
Professional Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of Agent or Collateral Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement, or any document contemplated by or
referred to herein, or the transactions contemplated hereby or thereby, or any
action taken or omitted by any such Person under or in connection with any of
the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that Company
----------------------- --------
shall have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting solely from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
10.6 Payments Set Aside. To the extent that Company makes a payment to
------------------
Agent or Banks, or Agent or Banks exercise their right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full
83
force and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Bank severally agrees to pay to Agent upon demand its pro
rata share of any amount so recovered from or repaid by Agent.
10.7 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
permitted (and those arising by operation of law) successors and assigns, except
that Company may not assign or transfer any rights or obligations under this
Agreement without the prior written consent of Agent and each Bank and no Bank
may assign or transfer any of its rights or obligations under this Agreement
except in accordance with Section 10.8 and by operation of law.
10.8 Assignments, Participations, etc.
---------------------------------
(a) Any Bank may, with the written consent of Agent (which consent
shall not be unreasonably withheld), at any time, assign and delegate to one or
more Eligible Assignees (provided that no written consent of Agent shall be
required in connection with (i) any assignment and delegation by a Bank to an
Affiliate of such Bank or (ii) to another Bank) (each an "Assignee") all, or any
--------
ratable part of all, of the Loans, and the other rights and obligations of such
Bank hereunder, in a minimum amount of $5,000,000; provided, however, that:
-------- -------
(A) a Bank may enter into an assignment and delegation
of less than $5,000,000 if such assignment and delegation consists
of such Bank's entire interest;
(B) the assignment shall provide that any claims made
by any Assignee under Sections 3.1, 3.2, 3.3, and 3.6 shall not
exceed the claims the assigning Bank could have made on the
interests assigned if the assigning Bank had retained such
interests; provided, however, that this subsection shall not apply
-------- -------
when the assignment is made by a Bank in favor of another Bank which
was a Bank on the Closing Date; and
(C) Company and Agent may continue to deal solely and
directly with such Bank in connection with the interest so assigned
to an Assignee until (1) written notice of such assignment, together
with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to Company and Agent
by such Bank and the Assignee; (2) such Bank and its Assignee shall
have delivered to Company and Agent an Assignment and Acceptance and
any Note or Notes subject to such assignment; and (3) the assignor
Bank or Assignee has paid Agent a processing fee of $3,500.
(b) From and after the date that Agent notifies the assignor Bank
that it has provided its consent to and received an executed Assignment and
Acceptance and payment of the processing fee of $3,500, (i) 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, shall have the rights and obligations of a Bank under the Loan
Documents, and (ii) the assignor Bank shall, to the extent that rights and
obligations hereunder and the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its
84
rights (other than any rights of indemnity) and be released from its obligations
under the Loan Documents.
(c) Within five Business Days after its receipt of notice by Agent
that it has received an executed Assignment and Acceptance and payment of the
processing fee, Company shall execute and deliver to Agent, new Notes evidencing
such Assignee's assigned Loans and, if the assignor Bank has retained a portion
of its Loans, replacement Notes in the principal amount of the Loans retained by
the assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank). Immediately upon each Assignee's making its payment
under the Assignment and Acceptance, this Agreement, shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee. If an assignor Bank has not retained a portion of its Loans,
such Bank shall xxxx its Notes "superseded" and return such Notes to Agent for
delivery to Company.
(d) Any Bank may at any time sell to one or more Eligible
Assignees (a "Participant") participating interests in any Loans and the other
-----------
interests of that Bank (the "Originator") hereunder and under the other Loan
----------
Documents; provided, however, that (i) the Originator's obligations under this
-------- -------
Agreement shall remain unchanged, (ii) the Originator shall remain solely
responsible for the performance of such obligations, (iii) Company and Agent
shall continue to deal solely and directly with the Originator in connection
with the Originator's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant shall have rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent as described in Section 10.1 or 10.21. In the case of any such
participation, the Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by Company hereunder
shall be determined as if such Originator had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement (and the Notes held
by it) in favor of any Federal Reserve Bank in accordance with Regulation A of
the Federal Reserve Board or U.S. Treasury Regulation 31 CFR ss.203.14, and may
assign all or any portion of its rights under or interests in this Agreement
(and the Notes held by it) to any Affiliate for purposes of creating such a
security interest or pledge, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
10.9 Designated Bidders. [Intentionally omitted]
------------------
10.10 Confidentiality. Each Bank agrees to take and to cause its
---------------
Affiliates, directors and employees to take normal and reasonable precautions
and exercise due care to maintain the
85
confidentiality of all information provided to it by Company or any Subsidiary
of Company, or by Agent or Collateral Agent on Company's or such Subsidiary's
behalf or obtained by a Bank pursuant to such Bank's exercise of its rights
under Section 6.7, under this Agreement or any other Loan Document, and neither
it nor any of its Affiliates shall use any such information other than in
connection with or in enforcement of this Agreement and the other Loan Documents
or in connection with other business now or hereafter existing or contemplated
with Company or any Subsidiary of Company; except to the extent such information
(a) was or becomes generally available to the public other than as a result of
disclosure by the Bank or (b) was or becomes available on a non-confidential
basis from a source other than Company, provided that such source is not bound
--------
by a confidentiality agreement with Company known to the Bank; provided,
--------
however, that Agent, Collateral Agent, and any Bank may disclose such
-------
information (i) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (ii) pursuant to subpoena or
other court process; (iii) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (iv) to the extent reasonably
required in connection with any litigation or proceeding to which Agent,
Collateral Agent, any Bank, or their respective Affiliates may be party; (v) to
the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (vi) to such Bank's Affiliates or
any of their Subsidiaries or their Affiliates' directors, officers, employees,
auditors, counsel, advisors, or representatives whom it determines need to know
such information for the purposes set forth in this Section, provided that such
--------
Person agrees to keep such information confidential to the same extent required
by Banks hereunder; (vii) to any bank or financial institution or other entity
to which such Bank has assigned or desires to assign an interest or
participation in the Loan Documents or the Obligations, provided that such
--------
Person agrees to keep such information confidential to the same extent required
by Banks hereunder; (viii) to any Bank or its Affiliate, as expressly permitted
under the terms of any other document or agreement regarding confidentiality to
which Company or any Subsidiary of Company is party or is deemed party with such
Bank or such Affiliate; and (ix) to its Affiliates in connection with any such
Affiliate's business with Company.
10.11 Set-off. In addition to any rights and remedies of Banks provided by
-------
law, if an Event of Default exists (after the giving of any required notice and
the expiration of any grace period required to make the relevant event an Event
of Default), each Bank is authorized at any time and from time to time, without
prior notice to Company, any such notice being waived by Company to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owed by, such Bank or, in the case of Citicorp U.S.A.,
Inc., Citibank, N.A., to or for the credit or the account of Company against any
and all Obligations owing to such Bank or Citibank, N.A., now or hereafter
existing, irrespective of whether or not Agent or such Bank shall have made a
request for payment under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured and Citibank, N.A. is hereby
irrevocably authorized to permit such setoff and application. Each Bank
severally agrees promptly to notify Company and Agent after any such set-off and
application made by such Bank; provided, however, that the failure to give such
-------- -------
notice shall not affect the validity of such set-off and application. The rights
of each Bank under this Section are in addition to the other rights and remedies
(including other rights of set-off) which the Bank may have.
86
10.12 Notification of Addresses, Lending Offices, etc. Each Bank shall
------------------------------------------------
notify Agent and Company in writing of any changes in the address to which
notices to the Bank should be directed, of addresses of each of its Lending
Offices, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as Agent shall reasonably
request.
10.13 Counterparts. This Agreement may be executed by one or more of the
------------
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with Company and Agent.
10.14 Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made and entered into
--------------------------
for the sole protection and legal benefit of Company, Banks, Agent, Collateral
Agent, Agent-Related Persons and Collateral Agent-Related Persons and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of Agent, Collateral Agent, any Bank, any Agent-Related Persons and any
Collateral Agent-Related Persons shall have any obligation to any Person not a
party to this Agreement or other Loan Documents.
10.16 Change in Accounting Principles. If any change in GAAP occurs or
-------------------------------
takes effect after the Closing Date which would result in a change in any
quantity reported to Banks hereunder which provides the basis for any covenant,
performance obligation or standard of measurement used in this Agreement, the
parties hereto agree to enter into negotiations in order to amend such covenant,
performance obligation or standard of performance so as to reflect such change
with the result that the criteria for evaluating compliance with such covenant,
performance obligation or standard of performance shall be the same after the
change as if the change had not been made. Until the parties hereto agree to
such amendment, all covenants, performance obligations and standards of
performance shall be calculated without giving effect to the change in GAAP.
10.17 Governing Law and Jurisdiction.
------------------------------
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES; PROVIDED THAT AGENT,
COLLATERAL AGENT, BANKS, AND COMPANY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, COMPANY, AGENT, COLLATERAL AGENT, AND BANKS EACH CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. COMPANY, AGENT, COLLATERAL AGENT, AND BANKS EACH IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. COMPANY, AGENT, COLLATERAL AGENT, AND
BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
10.18 Interpretation. This Agreement is the result of negotiations between
--------------
and has been reviewed by counsel to Agent, Company and other parties, and is the
product of all parties hereto. Accordingly, this Agreement and the other Loan
Documents shall not be construed against Company, Banks, or Agent merely because
of their involvement in the preparation of such documents and agreements.
10.19 Representation of Banks. Each Bank party to and as of the date of
-----------------------
this Agreement severally and only with respect to itself and to its status as a
Bank represents that it is entitled to receive interest payments from Company
free and clear of and without deduction for any U.S. taxes collected by way of
withholding that are in effect as of the date of this Agreement. Each Bank party
to and as of the date of this Agreement severally and only with respect to
itself represents that it is either (a) a corporation, company or association,
incorporated or organized in or under the laws of the U.S. or a state of the
U.S. (a "U.S. corporation"); (b) a non-U.S. corporation lending through its U.S.
branch, which will treat the interest income as effectively connected with its
U.S. trade or business; or (c) a non-U.S. corporation, resident in a country
that has a treaty with the U.S. that exempts interest payments by Company from
withholding taxes.
10.20 Waiver of Jury Trial. COMPANY, BANKS, AGENT AND COLLATERAL AGENT
--------------------
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. COMPANY, BANKS, COLLATERAL AGENT AND AGENT EACH AGREE THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
88
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.21 Amendments and Waivers Regarding Collateral. Written agreement from
-------------------------------------------
Requisite Banks is required for any waiver, amendment, or consent which releases
any Lien granted in favor of Collateral Agent other than the release of (a) any
Lien encumbering any item of Collateral that is the subject of a Capital Lease,
Equipment Financing Transaction, Real Estate Financing Transaction, Permitted
Receivables Purchase Facility or sale or other disposition of assets permitted
by Section 7.3 or (b) any Guarantor from a Guaranty other than in connection
with a sale of all of the Capital Stock of such Guarantor to any Person (other
than an Affiliate of Company) pursuant to a sale or other disposition permitted
by Section 7.3; and written agreement from all Banks is required for any waiver,
amendment, or consent which releases any Lien granted in favor of Collateral
Agent with respect to all or substantially all of the Collateral.
ARTICLE XI
GENERAL RELEASE
---------------
11.1 Except with respect to the matters, rights and obligations specified
in Section 11.2, Company for itself and on behalf of its parent, subsidiary and
controlled affiliate corporations, past or present, and each of them, as well as
each of their respective directors, officers, agents, servants, representatives,
attorneys, administrators, executors, heirs, assigns, predecessors and
successors in interest, and each of them (collectively, the "Releasors") hereby
---------
release and forever discharge Agent, Collateral Agent and Banks and each of
their respective parents, subsidiaries and affiliates, past or present, and each
of them, as well as each of their respective directors, officers, agents,
servants, employees, shareholders, representatives, attorneys, administrators,
executors, heirs, assigns, predecessors and successors in interest, and all
other persons, firms or corporations with whom any of the former have been, are
now, or may hereafter be affiliated, and each of them (collectively, the
"Releasees"), from and against any and all claims, demands, liens, agreements,
---------
contracts, covenants, actions, suits, causes of action in law or equity,
obligations, controversies, debts, costs, expenses, damages, judgments, orders
and liabilities of whatever kind or nature in law, equity or otherwise, whether
known or unknown, fixed or contingent, suspected or unsuspected by the
Releasors, and whether concealed or hidden, which Releasors now own or hold or
have at any time heretofore owned or held, which are based upon or arise out of
or in connection with any matter, cause or thing existing at any time prior to
the date hereof or anything done, omitted or suffered to be done or omitted at
any time prior to the date hereof in connection with the Existing Credit
Agreement, this Agreement and the other Loan Documents (collectively the
"Released Matters").
----------------
11.2 Notwithstanding anything hereunder to the contrary, this Article XI
shall not release or alter any obligation arising subsequent to the date hereof
to comply with the terms and conditions of this Agreement and the other Loan
Documents. It is expressly understood and agreed that it is the intent of
Company to forever release certain claims against Agent, Collateral Agent and
Banks, including, but not limited to, any claims related to the actions and
omissions of
89
Releasees prior to the date hereof, but that nothing herein shall affect the
obligations of the Releasees arising subsequent to the date hereof, including,
but not by way of limitation, compliance subsequent to the date hereof with all
terms and conditions of this Agreement and the other Loan Documents.
11.3 Without limiting the generality of the foregoing, Company for itself
and on behalf of the other Releasors expressly releases any and all past,
present and future claims in connection with the Released Matters, about which
the Releasors do not know or suspect to exist in their favor, whether through
ignorance, oversight, error, negligence or otherwise, and which, if known, would
materially affect Company's decision to enter into this release, and to this end
Company for itself, and on behalf of each of the other Releasors, waives all
rights under Section 1542 of the Civil Code of California, which states in full
as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Company knowingly and willingly waives the provisions of Section 1542 and
acknowledges and agrees that this waiver is an essential and material term of
this release. Company has reviewed this release with Company's legal counsel,
and Company understands and acknowledges the significance and consequence of
this release and of the specific waiver of Section 1542 of the Civil Code of
California.
11.4 Company represents, warrants and agrees that in executing and
entering into this release, Company is not relying and has not relied upon any
representation, promise or statement made by anyone which is not recited,
contained or embodied in this Agreement or the other Loan Documents. Company
understands and expressly assumes the risk that any fact not recited, contained
or embodied therein may turn out hereafter to be other than, different from, or
contrary to the facts now known to Company or believed by Company to be true.
Nevertheless, Company intends by this release to release fully, finally and
forever all Released Matters and agrees that this release shall be effective in
all respects notwithstanding any such difference in facts, and shall not be
subject to termination, modification or rescission by reason of any such
difference in facts.
90
