AMENDED AND RESTATED CREDIT AGREEMENT among ICONIX BRAND GROUP, INC. as Borrower, The Several Lenders from Time to Time Parties Hereto, LEHMAN BROTHERS INC., as Arranger LEHMAN COMMERCIAL PAPER INC., as Syndication Agent and LEHMAN COMMERCIAL PAPER...
EXECUTION
COPY
$212,500,000
AMENDED
AND RESTATED CREDIT AGREEMENT
among
as
Borrower,
The
Several Lenders
from
Time to Time Parties Hereto,
XXXXXX
BROTHERS INC.,
as
Arranger
XXXXXX
COMMERCIAL PAPER INC.,
as
Syndication Agent
and
XXXXXX
COMMERCIAL PAPER INC.,
as
Administrative Agent
Dated
as of May 2, 2007
TABLE
OF
CONTENTS
Page | |||
SECTION
1.
|
DEFINITIONS
|
1
|
|
1.1
|
Defined
Terms
|
1
|
|
1.2
|
Other
Definitional Provisions
|
32
|
|
SECTION
2.
|
AMOUNT
AND TERMS OF COMMITMENTS
|
32
|
|
2.1
|
Commitments
|
32
|
|
2.2
|
Procedure
for Borrowing
|
34
|
|
2.3
|
Repayment
of Loans
|
34
|
|
2.4
|
Repayment
of Loans; Evidence of Debt
|
36
|
|
2.5
|
Fees,
etc
|
37
|
|
2.6
|
Optional
Prepayments
|
37
|
|
2.7
|
Mandatory
Prepayments
|
37
|
|
2.8
|
Conversion
and Continuation Options
|
38
|
|
2.9
|
Minimum
Amounts and Maximum Number of Eurodollar Tranches
|
39
|
|
2.10
|
Interest
Rates and Payment Dates
|
39
|
|
2.11
|
Computation
of Interest and Fees
|
40
|
|
2.12
|
Inability
to Determine Interest Rate
|
40
|
|
2.13
|
Pro
Rata Treatment and Payments
|
40
|
|
2.14
|
Requirements
of Law
|
44
|
|
2.15
|
Taxes
|
45
|
|
2.16
|
Indemnity
|
46
|
|
2.17
|
Illegality
|
46
|
|
2.18
|
Change
of Lending Office
|
46
|
|
2.19
|
Replacement
of Lenders under Certain Circumstances
|
48
|
|
SECTION
3.
|
REPRESENTATIONS
AND WARRANTIES
|
48
|
|
3.1
|
Financial
Condition
|
48
|
|
3.2
|
No
Change
|
50
|
|
3.3
|
Corporate
Existence; Compliance with Law
|
50
|
|
3.4
|
Corporate
Power; Authorization; Enforceable Obligations
|
50
|
|
3.5
|
No
Legal Bar
|
50
|
|
3.6
|
No
Material Litigation
|
50
|
|
3.7
|
No
Default
|
51
|
|
3.8
|
Ownership
of Property; Liens
|
51
|
|
3.9
|
Intellectual
Property
|
51
|
|
3.10
|
Taxes
|
51
|
|
3.11
|
Federal
Regulations
|
51
|
|
3.12
|
Labor
Matters
|
51
|
|
3.13
|
ERISA
|
53
|
|
3.14
|
Investment
Company Act; Other Regulations
|
53
|
|
3.15
|
Subsidiaries
|
53
|
|
3.16
|
Use
of Proceeds
|
53
|
|
3.17
|
Environmental
Matters
|
53
|
|
3.18
|
Accuracy
of Information, etc.
|
54
|
|
3.19
|
Security
Documents
|
55
|
|
3.20
|
Solvency
|
55
|
|
3.21
|
Certain
Documents
|
55
|
i
SECTION
4.
|
CONDITIONS
PRECEDENT
|
55
|
|
4.1
|
Loan
Documents
|
57
|
|
4.2
|
Acquisitions
|
57
|
|
4.3
|
Pro
Forma Balance Sheet; Financial Statements
|
57
|
|
4.4
|
Minimum
Guaranteed Revenue
|
57
|
|
4.5
|
Approvals
|
57
|
|
4.6
|
Related
Agreements
|
57
|
|
4.7
|
Fees
|
57
|
|
4.8
|
Business
Plan
|
57
|
|
4.9
|
Solvency
Certificate
|
58
|
|
4.10
|
Lien
Searches
|
58
|
|
4.11
|
Closing
Certificate
|
58
|
|
4.12
|
Legal
Opinions
|
58
|
|
4.13
|
Pledged
Stock; Stock Powers
|
58
|
|
4.14
|
Filings,
Registrations and Recordings
|
58
|
|
4.15
|
Insurance
|
58
|
|
4.16
|
PATRIOT
Act
|
59
|
|
4.17
|
Representations
and Warranties
|
60
|
|
4.18
|
No
Default
|
60
|
|
SECTION
5.
|
AFFIRMATIVE
COVENANTS
|
60
|
|
5.1
|
Financial
Statements
|
60
|
|
5.2
|
Certificates;
Other Information
|
61
|
|
5.3
|
Payment
of Obligations
|
61
|
|
5.4
|
Conduct
of Business and Maintenance of Existence; Compliance
|
62
|
|
5.5
|
Maintenance
of Property; Insurance
|
63
|
|
5.6
|
Inspection
of Property; Books and Records; Discussions
|
63
|
|
5.7
|
Notices
|
63
|
|
5.8
|
Environmental
Laws
|
64
|
|
5.9
|
Interest
Rate Protection
|
64
|
|
5.10
|
Additional
Collateral, etc.
|
64
|
|
5.11
|
Further
Assurances
|
66
|
|
SECTION
6.
|
NEGATIVE
COVENANTS
|
67
|
|
6.1
|
Total
Leverage Ratio
|
67
|
|
6.2
|
Limitation
on Indebtedness
|
67
|
|
6.3
|
Limitation
on Liens
|
69
|
|
6.4
|
Limitation
on Fundamental Changes
|
71
|
|
6.5
|
Limitation
on Disposition of Property
|
73
|
|
6.6
|
Limitation
on Restricted Payments
|
73
|
|
6.7
|
Limitation
on Capital Expenditures
|
75
|
|
6.8
|
Limitation
on Investments
|
75
|
|
6.9
|
Limitation
on Optional Payments and Modifications of Debt Instruments,
etc.
|
76
|
|
6.10
|
Limitation
on Transactions with Affiliates
|
78
|
|
6.11
|
Limitation
on Sales and Leasebacks
|
78
|
|
6.12
|
Limitation
on Changes in Fiscal Periods
|
78
|
|
6.13
|
Limitation
on Negative Pledge Clauses
|
78
|
|
6.14
|
Limitation
on Restrictions on Subsidiary Distributions
|
78
|
|
6.15
|
Limitation
on Lines of Business
|
79
|
|
6.16
|
Limitation
on Amendments to Acquisition Documentation
|
79
|
|
6.17
|
Limitation
on Hedge Agreements
|
79
|
ii
SECTION
7.
|
EVENTS
OF DEFAULT
|
79
|
|
SECTION
8.
|
THE
ADMINISTRATIVE AGENT
|
83
|
|
8.1
|
Appointment
|
83
|
|
8.2
|
Delegation
of Duties
|
83
|
|
8.3
|
Exculpatory
Provisions
|
83
|
|
8.4
|
Reliance
by Administrative Agent
|
84
|
|
8.5
|
Notice
of Default
|
84
|
|
8.6
|
Non-Reliance
on Administrative Agent and Other Lenders
|
84
|
|
8.7
|
Indemnification
|
86
|
|
8.8
|
Agent
in Its Individual Capacity
|
86
|
|
8.9
|
Successor
Administrative Agent
|
86
|
|
8.10
|
Authorization
to Release Liens and Guarantees
|
87
|
|
8.11
|
The
Arranger
|
88
|
|
SECTION
9.
|
MISCELLANEOUS
|
88
|
|
9.1
|
Amendments
and Waivers
|
88
|
|
9.2
|
Notices
|
90
|
|
9.3
|
No
Waiver; Cumulative Remedies
|
92
|
|
9.4
|
Survival
of Representations and Warranties
|
92
|
|
9.5
|
Payment
of Expenses
|
92
|
|
9.6
|
Successors
and Assigns; Participations and Assignments
|
94
|
|
9.7
|
Adjustments;
Set off
|
98
|
|
9.8
|
Counterparts
|
98
|
|
9.9
|
Severability
|
98
|
|
9.10
|
Integration
|
98
|
|
9.11
|
GOVERNING
LAW
|
98
|
|
9.12
|
Submission
To Jurisdiction; Waivers
|
99
|
|
9.13
|
Acknowledgments
|
99
|
|
9.14
|
Confidentiality
|
99
|
|
9.15
|
Release
of Collateral and Guarantee Obligations
|
101
|
|
9.16
|
Accounting
Changes
|
101
|
|
9.17
|
[RESERVED]
|
102
|
|
9.18
|
WAIVERS
OF JURY TRIAL
|
102
|
iii
SCHEDULES:
|
|||
3.4
|
Consents,
Authorizations, Filings and Notices
|
||
3.15
|
Subsidiaries
|
||
3.19(a)
|
UCC
Filing Jurisdictions
|
||
6.2(d)
|
Existing
Indebtedness
|
||
6.3(f)
|
Existing
Liens
|
||
EXHIBITS:
|
|||
A
|
Form
of Guarantee and Collateral Agreement
|
||
B
|
Form
of Compliance Certificate
|
||
C
|
Form
of Closing Certificate
|
||
D
|
Form
of Assignment and Assumption
|
||
E-1
|
Form
of Legal Opinion of Blank Rome LLP
|
||
E-2
|
Form
of Legal Opinion of Xxxxxx Xxxxxxx
|
||
F
|
Form
of Note
|
||
G
|
Form
of Exemption Certificate
|
||
H
|
[Reserved]
|
||
I
|
Form
of Borrowing Notice
|
||
J
|
Form
of Increased Facility Activation Notice
|
||
K
|
Form
of New Lender Supplement
|
||
L
|
Form
of Subsidiaries’ Financial Information
|
iv
AMENDED
AND RESTATED CREDIT AGREEMENT, dated as of May 2, 2007, among, ICONIX BRAND
GROUP, INC., a Delaware corporation (the “Borrower”),
the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”),
XXXXXX BROTHERS INC., as advisor, sole lead arranger and sole bookrunner (in
such capacity, the “Arranger”),
XXXXXX COMMERCIAL PAPER INC., as syndication agent (in such capacity, the
“Syndication
Agent”)
and
XXXXXX COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
“Administrative
Agent”).
W
I T
N E S S E T H:
WHEREAS,
the Borrower entered into that certain Asset Purchase Agreement, dated as of
March 6, 2007 (the “Rocawear
Acquisition Agreement”),
by
and among the parties
thereto as sellers (collectively,
the “Rocawear
Sellers”;
and
together with the Danskin Sellers (as defined below), the “Sellers”)
and
the Borrower, pursuant to which the Borrower acquired (the “Rocawear
Acquisition”)
certain assets of the Rocawear Sellers;
WHEREAS,
the Borrower entered into that certain Credit Agreement, dated as of March
30,
2007 (the “Existing
Credit Agreement”),
by
and among the Borrower, Xxxxxx Commercial Paper Inc., as lender (in such
capacity, the “Existing
Lender”),
Xxxxxx Brothers Inc., as arranger, and Xxxxxx Commercial Paper Inc., as
syndication agent and administrative agent, pursuant to which the Existing
Lender made available a senior secured term loan facility in the aggregate
amount of $212,500,000 (the “Facility”),
the
proceeds of which were used to finance the Rocawear Acquisition and to pay
related fees and expenses;
WHEREAS,
the parties to the Existing Credit Agreement wish to amend and restate the
Existing Credit Agreement in its entirety pursuant to this Agreement;
and
WHEREAS,
it is the intent of the parties hereto, and the parties hereto agree that this
Agreement shall not constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence repayment of any of
such obligations or liabilities;
NOW,
THEREFORE, in consideration of the premises and the agreements hereinafter
set
forth, the parties hereto hereby agree that the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined
Terms.
As used
in this Agreement, the terms listed in this Section 1.1
shall
have the respective meanings set forth in this Section 1.1.
“Acquisitions”:
collectively, the Danskin Acquisition and the Rocawear Acquisition.
“Acquisition
Agreements”:
collectively, the Danskin Acquisition Agreement and the Rocawear Acquisition
Agreement.
“Acquisition
Documentation”:
collectively, the Acquisition Agreements and all schedules, exhibits, annexes
and amendments thereto and all side letters and agreements affecting the terms
thereof or entered into in connection therewith, in each case, as amended,
supplemented or otherwise modified from time to time.
“Administrative
Agent”:
as
defined in the preamble hereto.
“Affiliate”:
as to
any Person, any other Person that, directly or indirectly, is in control of,
is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control” of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors (or persons performing similar functions)
of
such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
“Aggregate
Exposure”:
with
respect to any Lender at any time, an amount equal to (a) until the Initial
Closing Date, the aggregate amount of such Lender’s Commitments at such time and
(b) thereafter, the aggregate then unpaid principal amount of such Lender’s
Loans.
“Aggregate
Exposure Percentage”:
with
respect to any Lender at any time, the ratio (expressed as a percentage) of
such
Lender’s Aggregate Exposure at such time to the sum of the Aggregate Exposures
of all Lenders at such time.
“Agreement”:
this
Amended and Restated Credit Agreement, as amended, supplemented or otherwise
modified from time to time.
“Applicable
Margin”:
1.25%
in the case of a Base Rate Term Loan and (b) 2.25% in the case of a Eurodollar
Term Loan. The Applicable Margin with respect to Incremental Loans shall be
specified in the Increased Facility Activation Notice with respect to such
Incremental Loans.
“Arranger”:
as
defined in the preamble hereto.
“Asset
Sale”:
any
Disposition of Collateral (or Property required to become Collateral) or series
of related Dispositions of Collateral (or Property required to become
Collateral) (excluding any such Disposition permitted by clause (a), (b),
(c), (d), (e), (f), (g), (h), (i), (l), (m) or (n) of Section 6.5) which
yields gross proceeds to the Borrower or any of its Subsidiaries (valued at
the
initial principal amount thereof in the case of non-cash proceeds consisting
of
notes or other debt securities and valued at fair market value in the case
of
other non-cash proceeds) in excess of $2,000,000.
“Assignee”:
as
defined in Section 9.6(c).
“Assignor”:
as
defined in Section 9.6(c).
“BAI
Litigation”:
that
certain lawsuit initiated on or about June 12, 2006, by Bongo Apparel, Inc.
in
the Supreme Court of the State of New York, County of New York, against the
Borrower.
“Base
Rate”:
for
any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
of
1%) equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus½
of
1%.
For purposes hereof: “Prime
Rate”
shall
mean the prime lending rate as set forth on the British Banking Association
Telerate Page 5 (or such other comparable publicly available service for
displaying prime lending rates as may, in the reasonable opinion of the
Administrative Agent after notice to the Borrower, replace such page for the
purpose of displaying such rate in the event such rate does not appear on the
British Banking Association Telerate Page 5), as in effect from time to
time. The Prime Rate is a reference rate and does not necessarily represent
the
lowest or best rate actually available. Any change in the Base Rate due to
a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
2
“Base
Rate Incremental Loans”:
Incremental Loans for which the applicable rate of interest is based upon the
Base Rate.
“Base
Rate Loans”:
the
collective reference to the Base Rate Term Loans and the Base Rate Incremental
Loans.
“Base
Rate Term Loans”:
Term
Loans for which the applicable rate of interest is based upon the Base
Rate.
“Benefited
Lender”:
as
defined in Section 9.7.
“Board”:
the
Board of Governors of the Federal Reserve System of the United States (or any
successor).
“Borrower”:
as
defined in the preamble hereto.
“Borrowing
Date”:
any
Business Day specified by the Borrower as a date on which the Borrower requests
the relevant Lenders to make Loans hereunder.
“Borrowing
Notice”:
with
respect to any request for borrowing of Loans hereunder, a notice from the
Borrower, substantially in the form of, and containing the information
prescribed by, Exhibit I, delivered to the Administrative
Agent.
“Business
Day”:
(a) for all purposes other than as covered by clause (b) below, a day
other than a Saturday, Sunday or other day on which commercial banks in New
York
City are authorized or required by law to close and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (a) and which is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
“Capital
Expenditures”:
for
any period, with respect to any Person, the aggregate of all expenditures by
such Person for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets (other than Intellectual Property and Capital Stock)
or
additions to equipment (including replacements, capitalized repairs and
improvements during such period) which are required to be capitalized under
GAAP
on a balance sheet of such Person.
“Capital
Lease Obligations”:
with
respect to any Person, the obligations of such Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance
sheet
of such Person under GAAP; and, for the purposes of this Agreement, the amount
of such obligations at any time shall be the capitalized amount thereof at
such
time determined in accordance with GAAP.
“Capital
Stock”:
any
and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation) and any and all warrants,
rights or options to purchase any of the foregoing.
3
“Cash
Equivalents”:
(a) marketable direct obligations issued by, or unconditionally guaranteed
by, the United States government or issued by any agency thereof and backed
by
the full faith and credit of the United States, in each case maturing within
one
year from the date of acquisition; (b) certificates of deposit, time
deposits, eurodollar time deposits or overnight bank deposits having maturities
of six months or less from the date of acquisition issued by any Lender or
by
any commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $500,000,000;
(c) commercial paper of an issuer rated at least A-2 by Standard &
Poor’s Rating Services (“S&P”)
or P-2
by Xxxxx’x Investors Service, Inc. (“Moody’s”),
or
carrying an equivalent rating by a nationally recognized rating agency, if
both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term
of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s;
(f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
“Change
of Control”:
the
occurrence of any of the following events: (a) any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange
Act”))
shall
become, or obtain rights (whether by means or warrants, options or otherwise)
to
become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of more than 30% of the
outstanding common stock of the Borrower; (b) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors or
(c) a Specified Change of Control if the holders of the related Permitted
Subordinated Indebtedness holding more than $25,000,000 thereof elect to put
such Permitted Subordinated Indebtedness to the Borrower.
“Code”:
the
Internal Revenue Code of 1986, as amended from time to time.
“Collateral”:
all
Property of the Loan Parties, now owned or hereafter acquired, upon which a
Lien
is purported to be created by any Security Document.
“Commitment”:
as to
the Existing Lender, the obligation of such Lender to make the Term Loan to
the
Borrower on the Initial Closing Date pursuant to the Existing Credit
Agreement.
“Commonly
Controlled Entity”:
an
entity, whether or not incorporated, that is under common control with the
Borrower within the meaning of Section 4001 of ERISA or is part of a group
that includes the Borrower and that is treated as a single employer under
Section 414 of the Code.
“Compliance
Certificate”:
a
certificate duly executed by a Responsible Officer, substantially in the form
of
Exhibit B.
4
“Consolidated
EBITDA”:
of the
Subsidiaries for any period, shall equal Consolidated Net Income of the
Subsidiaries for such period plus,
without
duplication and to the extent reflected in the calculation of such Consolidated
Net Income for such period, the sum of (a) income taxes allocable to any
Subsidiary on account of such Consolidated Net Income, (b) interest,
amortization or write-off of debt issuance costs and commissions, discounts
and
other fees and charges associated with the Loan Documents, (c) depreciation
and amortization expense either taken directly by or allocated to any
Subsidiary, and (d) amortization of intangibles (including, but not limited
to, goodwill) and organization costs either taken directly by or allocated
to
any Subsidiary. For
purposes of calculating Consolidated EBITDA of the Subsidiaries for any period,
(i) the Consolidated EBITDA of any Subsidiary acquired by the Borrower or its
Subsidiaries during such period which has become a “Subsidiary” under this
Agreement following such acquisition shall be included on a pro forma basis
for
such period (assuming the consummation of such acquisition and the incurrence
or
assumption of any Indebtedness in connection therewith occurred on the first
day
of such period) and (ii) the Consolidated EBITDA of any Subsidiary Disposed
of
by the Borrower or its Subsidiaries during such period which was a “Subsidiary”
under this Agreement prior to such Disposition shall be excluded for such period
(assuming the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such
period).
“Consolidated
Net Income”:
of the
Subsidiaries for any period, shall equal the aggregate revenues of the
Subsidiaries earned (as defined under GAAP) under license agreements for such
period; provided,
that in
calculating Consolidated Net Income of the Subsidiaries for any period, there
shall be excluded (a) such revenues of any Subsidiary accrued prior to the
date
it becomes a Subsidiary of, or is merged into or consolidated with, the Borrower
or any of its Subsidiaries and (b) the undistributed revenues of any Subsidiary
of the Borrower to the extent that the declaration or payment of dividends
or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary, minus,
without
duplication, the sum of (a) direct operating expenses incurred by any
Subsidiary, (b) corporate expenses allocated by the Borrower to any Subsidiary
in good faith and in accordance with past practices, (c) income taxes
allocable to such revenues, (d) interest, amortization or write-off of debt
issuance costs and commissions, discounts and other fees and charges associated
with the Loan Documents, (e) depreciation and amortization expense either
taken directly by or allocated to any Subsidiary in good faith and in accordance
with past practices, and (f) amortization of intangibles (including, but
not limited to, goodwill) and organization costs either taken directly by or
allocated to any Subsidiary in good faith and in accordance with past
practices.
“Consolidated
Total Debt”:
at any
date, the aggregate principal amount, without duplication, of all Indebtedness
of the Borrower and its Subsidiaries at such date determined on a consolidated
basis, net of Restricted Cash on the consolidated balance sheet of the Borrower
and its Subsidiaries at such date.
“Continuing
Directors”:
the
directors of the Borrower on the Initial Closing Date, after giving effect
to
the Acquisitions and the other transactions contemplated hereby, and each other
director of the Borrower, if, in each case, such other director’s nomination for
election to the board of directors of Borrower is recommended by at least 66⅔%
of the then Continuing Directors.
“Contractual
Obligation”:
as to
any Person, any provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such Person is a party
or by
which it or any of its Property is bound.
“Control
Investment Affiliate”:
as to
any Person, any other Person that (a) directly or indirectly, is in control
of, is controlled by, or is under common control with, such Person and
(b) is organized by such Person primarily for the purpose of making equity
or debt investments in one or more companies. For purposes of this definition,
“control” of a Person means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person, whether
by
contract or otherwise.
5
“Xxx
River Agreement”:
that
certain agreement by and between Danskin, Inc., a Delaware corporation, and
Xxx
River, Inc., dated as of September 28, 1977, as amended, restated supplemented
or otherwise modified by amendments dated December 30, 1983 and October 5,
1995.
“Danskin
Acquisition”:
the
acquisition by the Borrower of certain assets of the Danskin Sellers pursuant
to
the Danskin Acquisition Agreement.
“Danskin
Acquisition Agreement”:
that
certain Assets Purchase Agreement, dated as of February 21, 2007, by and among
the Borrower and the Danskin Sellers.
“Danskin
License Agreement”:
that
certain License Agreement, dated as of March 9, 2007, between DANSKIN, Inc.
and
Studio IP Holdings LLC., as amended, supplemented or otherwise modified from
time to time.
“Danskin
Sellers”:
collectively, DANSKIN, Inc. and Danskin Now, Inc.
“Default”:
any of
the events specified in Section 7,
whether
or not any requirement for the giving of notice, the lapse of time, or both,
has
been satisfied.
“Derivatives
Counterparty”:
as
defined in Section 6.6.
“Directly
Owned Foreign Subsidiary”:
a
Foreign Subsidiary that is directly owned by the Borrower.
“Disposition”:
with
respect to any Property, any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof; and the terms “Dispose”
and
“Disposed
of”
shall
have correlative meanings.
“Dollars”
and
“$”:
dollars in lawful currency of the United States.
“Domestic
Subsidiary”:
any
Subsidiary of the Borrower organized under the laws of any jurisdiction within
the United States.
“Earn-Out
Consideration”:
as
such term is defined in the Acquisition Documentation or any similar term
defined in the purchase agreement entered into in connection with a Permitted
Acquisition Transaction.
“ECF
Percentage”:
with
respect to any fiscal year of the Borrower, 50%; provided,
that,
with respect to any fiscal year of the Borrower ending on or after December
31,
2007, the ECF Percentage shall be (a) 25% if the Total Leverage Ratio as of
the
last day of such fiscal year is not greater than 3.0 to 1.0 and (b) 0% if the
Total Leverage Ratio as of the last day of such fiscal year is not greater
than
2.5 to 1.0.
“Environmental
Laws”:
any
and all laws, rules, orders, regulations, statutes, ordinances, guidelines,
codes, decrees, or other legally enforceable requirements (including, without
limitation, common law) of any international authority, foreign government,
the
United States, or any state, local, municipal or other governmental authority,
regulating, relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and safety,
as has been, is now, or may at any time hereafter be, in effect.
6
“Environmental
Permits”:
any
and all permits, licenses, approvals, registrations, notifications, exemptions
and other authorizations required under any Environmental Law.
“ERISA”:
the
Employee Retirement Income Security Act of 1974, as amended from time to
time.
“Eurocurrency
Reserve Requirements”:
for
any day, the aggregate (without duplication) of the maximum rates (expressed
as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves) under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal
Reserve System of the United States.
“Eurodollar
Base Rate”:
with
respect to each day during each Interest Period, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing
on
Page 3750 of the Dow Xxxxx Markets Screen (or such other comparable
publicly available service for displaying eurodollar rates as may, in the
reasonable opinion of the Administrative Agent after notice to the Borrower,
replace such page for the purpose of displaying such rate in the event such
rate
does not appear on Page 3750 of the Dow Xxxxx Markets Screen (or otherwise
on such screen)), as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period.
“Eurodollar
Incremental Loans”:
Incremental Loans for which the applicable rate of interest is based upon the
Eurodollar Rate.
“Eurodollar
Loans”:
the
collective reference to the Eurodollar Term Loans and the Eurodollar Incremental
Loans.
“Eurodollar
Rate”:
with
respect to each day during each Interest Period, a rate per annum determined
for
such day in accordance with the following formula (rounded upward to the nearest
1/100th
of
1%):
Eurodollar Base
Rate
1.00
-
Eurocurrency Reserve Requirements
“Eurodollar
Term Loans”:
Term
Loans for which the applicable rate of interest is based upon the Eurodollar
Rate.
“Eurodollar
Tranche”:
the
collective reference to Eurodollar Loans the then current Interest Periods
with
respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same
day).
“Event
of Default”:
any of
the events specified in Section 7,
provided
that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
7
“Excess
Cash Flow”:
for
any fiscal year of the Subsidiaries, the difference, if any, of (a) the
sum, without duplication, of (i) Consolidated Net Income for such fiscal
year, (ii) the amount of all non-cash charges (including taxes,
depreciation and amortization) deducted in arriving at such Consolidated Net
Income and (iii) the aggregate amount of the decrease, if any, in prepaid
advertising costs with respect to any Subsidiary during such fiscal year,
minus
(b) the sum, without duplication, of (i) the aggregate amount of
Consolidated Net Income of Foreign Subsidiaries that has not been repatriated
or
otherwise distributed to the Borrower or any of its Domestic Subsidiaries,
(ii) the amount of all non-cash credits (including taxes) included in
arriving at such Consolidated Net Income, (iii) the aggregate amount
actually paid in cash during such fiscal year on account of Capital Expenditures
(minus
the sum
of the principal amount of Indebtedness incurred in connection with such
expenditures and the amount of any such expenditures financed with the proceeds
of any Reinvestment Deferred Amount), (iv) the aggregate amount actually paid
in
cash during such fiscal year on account of Permitted Acquisitions or Permitted
Foreign Subsidiary Acquisitions (minus
the sum
of the principal amount of Indebtedness incurred in connection with such
acquisitions and the amount of any such acquisitions financed with the proceeds
of any Reinvestment Deferred Amount), (v) the aggregate amount of any Earn-Out
Consideration actually paid in cash during such fiscal year on account of the
Acquisitions or any Permitted Acquisition or any Permitted Foreign Subsidiary
Acquisition, (vi) the aggregate amount of all optional prepayments of the Loans
and any other Funded Debt during such fiscal year, (vii) the aggregate
amount of all regularly scheduled principal payments of Funded Debt (including,
without limitation, the Loans) of the Borrower and its Subsidiaries made during
such fiscal year (other than in respect of any revolving credit facility to
the
extent there is not an equivalent permanent reduction in commitments thereunder)
and (viii) the aggregate amount of the increase, if any, in prepaid advertising
costs with respect to any Subsidiary during such fiscal year.
“Excess
Cash Flow Application Date”:
as
defined in Section 2.7(c).
“Excluded
Foreign Subsidiary”:
any
Foreign Subsidiary in respect of which either (a) the pledge of all of the
Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by
such Subsidiary of the Obligations, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.
“Excluded
Taxes”:
net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision
or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent’s or such Lender’s having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document).
“Existing
Credit Agreement”:
as
defined in the recitals to this Agreement.
“Existing
Lender”:
as
defined in the recitals to this Agreement.
“Facility”:
as
defined in the recitals to this Agreement.
“Federal
Funds Effective Rate”:
for
any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
that
is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
8
“Fee
Letter”:
that
certain Fee Letter, dated March 5, 2007, by and between the Administrative
Agent, the Borrower and Xxxxxx Brothers Commercial Bank.
“Foreign
Subsidiary”:
any
Subsidiary of the Borrower that is not a Domestic Subsidiary.
“Funded
Debt”:
with
respect to any Person, all Indebtedness of such Person of the types described
in
clauses (a) through (e) of the definition of “Indebtedness” in this
Section 1.1.
“Funding
Office”:
the
office specified from time to time by the Administrative Agent as its funding
office by notice to the Borrower and the Lenders.
“GAAP”:
generally accepted accounting principles in the United States of America as
in
effect from time to time.
“Governmental
Authority”:
any
nation or government, any state or other political subdivision thereof, any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory
or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization (including the National Association of
Insurance Commissioners).
“Guarantee
and Collateral Agreement”:
the
Guarantee and Collateral Agreement executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the
same may be amended, supplemented or otherwise modified from time to
time.
“Guarantee
Obligation”:
as to
any Person (the “guaranteeing
person”),
any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees or in effect guarantees, or which
is
given to induce the creation of a separate obligation by another Person
(including any bank under any letter of credit) that guarantees or in effect
guarantees any Indebtedness, leases, dividends or other obligations (the
“primary
obligations”)
of any
other third Person (the “primary
obligor”)
in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in respect
thereof; provided,
however,
that
the term Guarantee Obligation shall not include endorsements of instruments
for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which
case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by
the
Borrower in good faith.
“Hedge
Agreements”:
all
interest rate or currency forwards, options, swaps, caps or collar agreements,
foreign exchange agreements, commodity contracts or similar arrangements entered
into by the Borrower or its Subsidiaries providing for protection against
fluctuations in interest rates, currency exchange rates, commodity prices or
the
exchange of nominal interest obligations, either generally or under specific
contingencies.
9
“Increased
Facility Activation Date”:
any
Business Day on which any Lender shall execute and deliver to the Administrative
Agent an Increased Facility Activation Notice pursuant to Section 2.1(b).
“Increased
Facility Activation Notice”:
a
notice substantially in the form of Exhibit J.
“Increased
Facility Closing Date”:
any
Business Day designated as such in an Increased Facility Activation
Notice.
“Incremental
Lenders”:
(a) on
any Increased Facility Activation Date relating to incremental Term Loans or
Incremental Loans, the Lenders signatory to the relevant Increased Facility
Activation Notice and (b) thereafter, each Lender that is a holder of an
incremental Term Loan or Incremental Loan.
“Incremental
Loans”:
as
defined in Section 2.1(a)(ii).
“Incremental
Loan Maturity Date”:
with
respect to the Incremental Loans to be made pursuant to any Increased Facility
Activation Notice, the maturity date specified in such Increased Facility
Activation Notice, which date shall be on or after the Loan Maturity
Date.
“Indebtedness”:
of any
Person at any date, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of Property or services (other than trade payables
incurred in the ordinary course of such Person’s business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller
or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such
Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit, surety bond
or
similar facilities, (g) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (h) all obligations for any Earn-Out Consideration
that is or is highly likely to be paid within the next twelve months (other
than
those obligations that are satisfied solely with Capital Stock of the Borrower
and/or Unrestricted Cash and those obligations under the Acquisition
Documentation), (i) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (h) above,
(j) all obligations of the kind referred to in clauses (a) through (i)
above secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation and (k) for the purposes of Section 7(e)
only,
all obligations of such Person in respect of Hedge Agreements. The Indebtedness
of any Person shall include, without duplication, the Indebtedness of any other
entity (including any partnership in which such Person is a general partner)
to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.
“Indemnified
Liabilities”:
as
defined in Section 9.5.
“Indemnitee”:
as
defined in Section 9.5.
10
“Initial
Closing Date”:
March
30, 2007.
“Insolvency”:
with
respect to any Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section 4245 of ERISA.
“Insolvent”:
pertaining to a condition of Insolvency.
“Intellectual
Property”:
the
collective reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, copyrights, copyright
licenses, software, databases, patents, patent licenses, trademarks, trademark
licenses, trademark applications, service marks, service xxxx licenses, service
xxxx applications, trade names, brand names, domain names, mask works, mask
work
licenses, technology and related improvements, know-how and processes, trade
secrets, all registrations and applications related to any of the above, and
all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages
therefrom.
“Interest
Payment Date”:
(a) as to any Base Rate Loan, the last day of each March, June, September
and December to occur while such Loan is outstanding and the final maturity
date
of such Loan, (b) as to any Eurodollar Loan having an Interest Period of
three months or shorter, the last day of such Interest Period, (c) as to
any Eurodollar Loan having an Interest Period longer than three months, each
day
that is three months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any
Loan, the date of any repayment or prepayment made in respect
thereof.
“Interest
Period”:
as to
any Eurodollar Loan, (a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such Eurodollar Loan
and
ending one, two, three or six or (if acceptable to all Lenders, as determined
by
such Lenders in their sole discretion) nine or twelve months thereafter, as
selected by the Borrower in a Borrowing Notice or notice of conversion, as
the
case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable
to
such Eurodollar Loan and ending one, two, three or six or (if acceptable to
all
Lenders, as determined by such Lenders in their sole discretion) nine or twelve
months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the
date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided
that,
all of the foregoing provisions relating to Interest Periods are subject to
the
following:
(1) if
any
Interest Period would otherwise end on a day that is not a Business Day, such
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;
(2) in
the
case of Term Loans, any Interest Period that would otherwise extend beyond
the
Loan Maturity Date shall end on the Loan Maturity Date;
(3) in
the
case of Incremental Loans, any Interest Period that would otherwise extend
beyond the Incremental Loan Maturity Date shall end on the Incremental Loan
Maturity Date; and
(4) any
Interest Period that begins on the last Business Day of a calendar month (or
on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period.
11
“Investment”:
as
defined in Section 6.8.
“Xxxxxx
Entity”:
any of
Xxxxxx Commercial Paper Inc. or any of its Affiliates.
“Lenders”:
as
defined in the preamble hereto.
“Lien”:
any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind
or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
“Loan”:
any
Term Loan and any Incremental Loan.
“Loan
Documents”:
this
Agreement, the Security Documents, the Fee Letter and any Notes.
“Loan
Maturity Date”:
April
30, 2013.
“Loan
Parties”:
the
Borrower and each Subsidiary of the Borrower that is a party to a Loan
Document.
“Loan
Percentage”:
(a) as
to any Lender (other than an Incremental Lender) at any time, the percentage
which such Lender’s Commitment then constitutes of the aggregate Commitments
(or, at any time after the Initial Closing Date, the percentage which the
aggregate principal amount of such Lender’s Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding) and (b) as to any Incremental Lender at any time, the percentage
which such Incremental Lender’s Commitment then constitutes of the aggregate
Commitments.
“Material
Adverse Effect”:
a
material adverse effect on (a) the Acquisitions (to the extent not
previously completed) or the Acquired Assets (taken as a whole), (b) the
business, assets, property, operations, or condition (financial or otherwise)
of
the Borrower and its Subsidiaries taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
“Materials
of Environmental Concern”:
any
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances or forces
of
any kind, whether or not any such substance or force is defined as hazardous
or
toxic under any Environmental Law, that is regulated pursuant to or could give
rise to liability under any Environmental Law.
“Mortgages”:
each
of the mortgages and deeds of trust, if any, made by any Loan Party in favor
of,
or for the benefit of, the Administrative Agent for the benefit of the Secured
Parties.
“Multiemployer
Plan”:
a Plan
that is a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
12
“Net
Cash Proceeds”:
(a) in connection with any Asset Sale or any Recovery Event, the proceeds
thereof in the form of cash and Cash Equivalents (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise,
but
only as and when received) of such Asset Sale or Recovery Event, net of
attorneys’ fees, accountants’ fees, investment banking fees, amounts required to
be applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset Sale or
Recovery Event (other than any Lien pursuant to a Security Document) and other
customary fees and expenses actually incurred in connection therewith and net
of
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements with respect to such Asset Sale or Recovery Event) and (b) in
connection with any issuance or sale of debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
“New
Lender”:
as
defined in Section 2.1(c).
“New
Lender Supplement”:
as
defined in Section 2.1(c).
“Non-Excluded
Taxes”:
as
defined in Section 2.15(a).
“Non-U.S.
Lender”:
as
defined in Section 2.15(d).
“Note”:
as
defined in Section 2.4(e).
“Obligations”:
the
unpaid principal of and interest on (including, without limitation, interest
accruing after the maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender or any Qualified Counterparty, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, any Specified Hedge Agreement
or
any other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise;
provided,
that
(i) obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors
effected in the manner permitted by this Agreement shall not require the consent
of holders of obligations under Specified Hedge Agreements.
“OP”:
Xxxxx
Xxxxxxx Apparel Corp., a Delaware corporation.
“Organizational
Documents”:
as to
any Person, the certificate of incorporation and bylaws or other organizational
or governing documents of such Person.
“Other
Taxes”:
any
and all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.
13
“Participant”:
as
defined in Section 9.6(b).
“Payment
Office”:
the
office specified from time to time by the Administrative Agent as its payment
office by notice to the Borrower and the Lenders.
“PBGC”:
the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of
Title IV of ERISA (or any successor).
“Permitted
Acquisition”:
(i) to
the extent clause (ii) below is not satisfied, any acquisition (including,
if
applicable, in the case of any Intellectual Property, by way of license)
approved by the Required Lenders or (ii) any acquisition of all or a majority
controlling interest in the Capital Stock, or all or substantially all of the
assets, of any Person, or of all or substantially all of the assets constituting
a division, product line or business line of any Person, if such acquisition
described in this clause (ii) complies with the following criteria:
(a) no
Default or Event of Default shall be in effect immediately prior or after giving
effect to such acquisition;
(b) such
acquisition is consummated by a Wholly Owned Subsidiary Guarantor or the
acquired Person or assets are sold, contributed, conveyed, assigned or otherwise
transferred to a Wholly Owned Subsidiary Guarantor by the Borrower or the
acquired Person shall become a direct Subsidiary of the Borrower and, in each
case, the acquired Person shall become a Wholly Owned Subsidiary Guarantor
and
the acquired assets (including the Capital Stock of the acquired Person) shall
be pledged as additional Collateral;
(c) after
giving effect to the consummation of such acquisition and to the incurrence
of
any Indebtedness associated therewith, the Borrower shall be in pro forma
compliance with Section 6.1;
and
(d) prior
to
the consummation of such acquisition (i) the Administrative Agent shall have
received the historical financial statements for the most recently completed
fiscal year and any subsequently completed fiscal quarter and the then current
financial projections in respect of the Person, division, product line or line
of business acquired in such acquisition for the one-year period following
the
consummation of such acquisition, (ii) the Administrative Agent shall have
received the then current drafts of the documentation to be executed in
connection with such acquisition (with final copies of such documentation to
be
delivered to the Administrative Agent promptly upon becoming available),
including all schedules and exhibits thereto and (iii) the Administrative Agent
shall have received notice of the closing date for such acquisition;
provided
that the
foregoing financial statements, documentation and notice shall not be required
to be given if doing so (x) would materially interfere with, or would cause
materially adverse economic consequences with respect to, the consummation
of
such acquisition or (y) is prohibited by any Requirement of Law (other than
the
Organizational Documents of the Borrower or a Subsidiary).
“Permitted
Acquisition Transactions”:
the
collective reference to Permitted Acquisitions, Permitted Foreign Subsidiary
Acquisitions, Permitted Securitization Transactions and Permitted Unrestricted
Subsidiary Acquisitions.
“Permitted
Convertible Notes Offering”:
the
collective reference to (a) any offering by the Borrower after the Initial
Closing Date of convertible senior subordinated or subordinated notes,
provided
that
such notes are Permitted Subordinated Indebtedness, and (b) any offering by
an
Unrestricted Subsidiary after the Initial Closing Date of convertible senior,
senior subordinated or subordinated notes that is guaranteed by the Borrower,
provided
that
such guarantee is Permitted Subordinated Indebtedness.
14
“Permitted
Foreign Subsidiary Acquisition”:
any
acquisition of all or a majority controlling interest in the Capital Stock,
or
all or substantially all of the assets, of any Person, or of all or
substantially all of the assets constituting a division, product line or
business line of any Person, if such acquisition complies with the following
criteria:
(a) no
Default or Event of Default shall be in effect immediately prior or after giving
effect to such acquisition;
(b) such
acquisition is funded solely with Capital Stock of the Borrower, the Net Cash
Proceeds of a Permitted Convertible Notes Offering and/or Unrestricted
Cash;
(c) the
acquired Person will become (after giving effect to such acquisition) a Directly
Owned Foreign Subsidiary or the acquired assets are sold, contributed, conveyed,
assigned or otherwise transferred to a Directly Owned Foreign Subsidiary by
the
Borrower and, in each case, 65% of the total outstanding Capital Stock of such
Directly Owned Foreign Subsidiary shall be pledged as additional
Collateral;
(d) such
Directly Owned Foreign Subsidiary shall not create, incur, assume or suffer
to
exist (i) any Indebtedness and (ii) any Lien upon any of its Property, whether
now owned or hereafter acquired;
(e) after
giving effect to the consummation of such acquisition and to the incurrence
of
any Indebtedness associated therewith, the Borrower shall be in pro forma
compliance with Section 6.1; and
(f) prior
to
the consummation of such acquisition (i) the Administrative Agent shall have
received the historical financial statements for the most recently completed
fiscal year and any subsequently completed fiscal quarter and the then current
financial projections in respect of the Person, division, product line or line
of business acquired in such acquisition for the one-year period following
the
consummation of such acquisition, (ii) the Administrative Agent shall have
received the then current drafts of the documentation to be executed in
connection with such acquisition (with final copies of such documentation to
be
delivered to the Administrative Agent promptly upon becoming available),
including all schedules and exhibits thereto and (iii) the Administrative Agent
shall have received notice of the closing date for such acquisition; provided
that the foregoing financial statements, documentation and notice shall not
be
required to be given if doing so (x) would materially interfere with, or would
cause materially adverse economic consequences with respect to, the consummation
of such acquisition or (y) is prohibited by any Requirement of Law (other than
the Organizational Documents of the Borrower or a Subsidiary).
“Permitted
Securitization Transaction”:
any
transaction or series of transactions that may be entered into by the Borrower
pursuant to which the Borrower may sell, contribute, convey, assign or otherwise
transfer to an Unrestricted Subsidiary any assets (other than cash or Cash
Equivalents) (whether now existing or acquired in the future) of the Borrower
that (a) have been acquired solely with Capital Stock of the Borrower and/or
Unrestricted Cash and (b) are customarily sold, contributed, conveyed, assigned
or otherwise transferred in connection with asset securitization transactions
similar to the Permitted Securitization Transaction entered into; provided
that
such transaction or series of transactions meets the following conditions:
(i)
all sales, contributions, transfers or other conveyances of assets to the
Unrestricted Subsidiary are made at fair market value (as determined in good
faith by the Borrower), (ii) the financing terms, covenants, termination events
and other provisions thereof shall be market terms (as determined in good faith
by the Borrower) and may include Standard Repurchase Obligations and (iii)
no
portion of the obligations under the Permitted Securitization Transaction
(contingent or otherwise) will (x) be incurred or guaranteed by the Borrower
or
any Subsidiary (except for Standard Repurchase Obligations), (y) be recourse
to
the Borrower or any Subsidiary, other than pursuant to Standard Repurchase
Obligations or (z) subject any property or asset of the Borrower or any
Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Repurchase
Obligations.
15
“Permitted
Subordinated Indebtedness”:
as
defined in Section 6.2(g).
“Permitted
Unrestricted Subsidiary Acquisition”:
any
acquisition of all or a majority controlling interest in the Capital Stock,
or
all or substantially all of the assets, of any Person, or of all or
substantially all of the assets constituting a division, product line or
business line of any Person, if such acquisition complies with the following
criteria:
(a)
such
acquisition is funded solely with Capital Stock of the Borrower, Unrestricted
Cash and/or Restricted Cash (provided
that the
aggregate amount of any Restricted Cash used to fund a Permitted Unrestricted
Subsidiary Acquisition, together with any Guarantee Obligations of the Borrower
incurred pursuant to Section 6.2(f) and any Investment made pursuant to Section
6.8(k), shall not exceed $30,000,000 plus the Retained Excess Cash Flow Amount
during the term of this Agreement); and
(b)
the
acquired Person or assets are sold, contributed, conveyed, assigned or otherwise
transferred to an Unrestricted Subsidiary by the Borrower or the acquired Person
shall become a direct Subsidiary of the Borrower without recourse to the
Borrower or any Subsidiary (other than Standard Repurchase
Obligations).
“Person”:
an
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
“Plan”:
at a
particular time, any employee benefit plan that is covered by ERISA and in
respect of which the Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of
ERISA.
“Pro
Forma Balance Sheet”:
as
defined in Section 3.1(a).
“Property”:
any
right or interest in or to property of any kind whatsoever, whether real,
personal or mixed and whether tangible or intangible, including, without
limitation, Capital Stock.
“Qualified
Counterparty”:
with
respect to any Specified Hedge Agreement, any counterparty thereto that, at
the
time such Specified Hedge Agreement was entered into, was a Lender or an
Affiliate of a Lender.
“Recovery
Event”:
any
settlement of or payment equal to or greater than $2,000,000 in respect of
any
property or casualty insurance claim or any condemnation proceeding relating
to
any Property of the Borrower or any of its Subsidiaries if such Property is
or
is required to become Collateral.
“Register”:
as
defined in Section 9.6(d).
16
“Regulation
U”:
Regulation U of the Board as in effect from time to time.
“Reinvestment
Deferred Amount”:
with
respect to any Reinvestment Event, the aggregate Net Cash Proceeds received
by
the Borrower or any of its Subsidiaries in connection therewith that are not
applied to prepay the Loans pursuant to Section 2.7(b)
as a
result of the delivery of a Reinvestment Notice.
“Reinvestment
Event”:
any
Asset Sale, or Recovery Event in respect of which the Borrower has delivered
a
Reinvestment Notice.
“Reinvestment
Notice”:
a
written notice executed by a Responsible Officer stating that no Default or
Event of Default has occurred and is continuing and that the Borrower or a
Wholly Owned Subsidiary Guarantor intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
or repair assets useful in its business.
“Reinvestment
Prepayment Amount”:
with
respect to any Reinvestment Event, the Reinvestment Deferred Amount relating
thereto less
any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
or
repair assets useful in the business of the Borrower or of any
Subsidiary.
“Reinvestment
Prepayment Date”:
with
respect to any Reinvestment Event, the earlier of (a) the date occurring
one year after such Reinvestment Event and (b) the date on which the
Borrower or any Subsidiary shall have determined not to, or shall have otherwise
ceased to, acquire or repair assets useful in the business of the Borrower
or of
any Subsidiary with all or any portion of the relevant Reinvestment Deferred
Amount.
“Related
Fund”:
with
respect to any Lender, any fund that (x) invests in commercial loans and
(y) is managed or advised by the same investment advisor as such Lender, by
such Lender or an Affiliate of such Lender.
“Reorganization”:
with
respect to any Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section 4241 of ERISA.
“Replevin
Bond”:
that
certain replevin bond, dated as of September 14, 2006, posted by the Borrower
in
connection with the Unzipped Litigation.
“Reportable
Event”:
any of
the events set forth in Section 4043(c) of ERISA, other than those events
as to which the thirty day notice period is waived under subsections .27,
.28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.
“Required
Lenders”:
at any
time, the holders of more than 50% of (a) until the Initial Closing Date,
the Commitments and (b) thereafter, the aggregate unpaid principal amount
of the Loans then outstanding.
“Requirement
of Law”:
as to
any Person, the Organizational Documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.
17
“Responsible
Officer”:
the
chief executive officer, president, chief financial officer or general counsel
of the Borrower, but in any event, with respect to financial matters, the chief
financial officer of the Borrower.
“Restricted
Cash”:
for
any fiscal quarter of the Subsidiaries, the result of, without duplication,
(a)
Excess Cash Flow (calculated on a quarterly basis) for such fiscal quarter,
minus
(b) the
amount of such Excess Cash Flow actually used during such fiscal quarter to
prepay the Loans pursuant to Section 2.7(c), minus
(c) to
the extent not already included in the calculation of Excess Cash Flow, the
amount of such Excess Cash Flow actually used during such fiscal quarter for
any
other purpose permitted by this Agreement, plus
(d) the
aggregate amount of Net Cash Proceeds of any Indebtedness incurred by the
Borrower or its Subsidiaries during such fiscal quarter, plus
(e) the
aggregate amount of Net Cash Proceeds of any Permitted Convertible Notes
Offering during such fiscal quarter, minus
(f) the
aggregate amount of such Net Cash Proceeds described in clauses (d) and (e)
hereof actually paid during such fiscal quarter on account of Permitted
Acquisitions or Permitted Foreign Subsidiary Acquisitions, minus
(g) the
aggregate amount of such Net Cash Proceeds described in clauses (d) and (e)
hereof actually paid during such fiscal quarter on account of hedge and warrant
option transactions in connection with a Permitted Convertible Notes Offering,
minus
(h) the
aggregate amount of such Net Cash Proceeds described in clauses (d) and (e)
hereof actually used during such fiscal quarter for any other purpose permitted
by this Agreement, plus
(i) the
aggregate amount of any Restricted Cash from a prior period.
“Restricted
Payments”:
as
defined in Section 6.6.
“Restricted
Subsidiary”:
each
of Studio IP Holdings LLC, Studio Holdings and Management Corporation, OP
Holdings LLC, OP Holdings and Management Corporation, each of their direct
or
indirect Subsidiaries formed or acquired after the Initial Closing Date and
any
direct or indirect Subsidiary of the Borrower formed or acquired after the
Initial Closing Date (other than a direct or indirect Subsidiary of Studio
IP
Holdings LLC, Studio Holdings and Management Corporation, OP Holdings LLC or
OP
Holdings and Management Corporation) designated by the board of directors of
the
Borrower as a Restricted Subsidiary. The board of directors of the Borrower
may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary
or any Restricted Subsidiary (other than any Restricted Subsidiary existing
on
the Initial Closing Date and any Subsidiary of a Restricted Subsidiary) to
be an
Unrestricted Subsidiary; provided
that
such designation shall only be permitted if no Default or Event of Default
would
be in existence following such designation and the Borrower would be in
compliance with Section 6.1
on the
date of such designation after giving pro forma
effect
to such designation; provided,
further,
that
the Borrower may subsequently redesignate any such Unrestricted Subsidiary
as a
Restricted Subsidiary so long as the Borrower does not subsequently re-designate
such Restricted Subsidiary as an Unrestricted Subsidiary for a period of the
succeeding four fiscal quarters.
“Retained
Excess Cash Flow Amount”:
at any
time of determination, an amount equal to the excess, if any, of (a) the
aggregate amount of Excess Cash Flow for all fiscal years commencing with the
fiscal year ending on December 31, 2007 that is not required to be used to
prepay the Loans pursuant to Section 2.7(c)
over (b)
the sum of (x) the sum, in excess of $30,000,000, of (i) the aggregate amount
of
Guarantee Obligations of the Borrower incurred pursuant to Section 6.2(f),
(ii)
the aggregate amount (valued at cost) of Investments made after the Initial
Closing Date pursuant to Section 6.8(k)
and
(iii) the aggregate amount of Restricted Cash used to fund a Permitted
Unrestricted Subsidiary Acquisition and (y) the aggregate amount of Restricted
Payments made after the Initial Closing Date pursuant to Section 6.6(c) in
excess of $5,000,000.
“Rocawear
Acquisition”:
as
defined in the recitals to this Agreement.
“Rocawear
Acquisition Agreement”:
as
defined in the recitals to this Agreement.
18
“Rocawear
Joint Venture Agreement”:
that
certain joint venture agreement, dated as of March 30, 2007, by and between
the
Borrower and Xxxxx Xxxxxx, as amended, supplemented or otherwise modified from
time to time.
“Rocawear
License Agreement”:
that
certain License Agreement, dated as of March 30, 2007, between Roc Apparel,
LLC
and Studio IP Holdings LLC, as amended, supplemented or otherwise modified
from
time to time.
“SEC”:
the
Securities and Exchange Commission (or successors thereto or an analogous
Governmental Authority).
“Secured
Parties”:
as
defined in the Guarantee and Collateral Agreement.
“Security
Documents”:
the
collective reference to the Guarantee and Collateral Agreement, the Mortgages
(if any) and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any Property of any Person to secure
the
obligations and liabilities of any Loan Party under any Loan
Document.
“Sellers”:
as
defined in the recitals to this Agreement.
“Single
Employer Plan”:
any
Plan that is covered by Title IV of ERISA, but which is not a Multiemployer
Plan.
“Solvent”:
with
respect to any Person, as of any date of determination, (a) the amount of
the “present fair saleable value” of the assets of such Person will, as of such
date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are determined in accordance
with applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and
(d) such Person will be able to pay its debts as they mature. For purposes
of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
“Specified
Change of Control”:
a
“change of control” or “fundamental change” (or any other defined term having a
similar purpose), as defined in any indenture or other instrument governing
any
Permitted Subordinated Indebtedness.
“Specified
Hedge Agreement”:
any
Hedge Agreement entered into by the Borrower or any Subsidiary Guarantor and
any
Qualified Counterparty.
“Specified
License Agreement”:
collectively, the Rocawear License Agreement and the Wal-Mart License Agreement
and any replacement contract thereunder whether or not with the same or
different parties.
“Standard
Repurchase Obligation”:
any
obligation of the Borrower to repurchase the assets it sold or otherwise
transferred under a Permitted Securitization Transaction or a Permitted
Unrestricted Subsidiary Acquisition as a result of a breach of a representation,
warranty or covenant regarding such assets that the Borrower has determined
in
good faith to be customary for such Permitted Securitization Transaction or
such
Permitted Unrestricted Subsidiary Acquisition.
19
“Subsidiaries’
Financial Information”:
with
respect to the Subsidiaries for any fiscal year, a report in substantially
the
form of, and containing the information set forth in, Exhibit L attached hereto,
together with such other information as the Administrative Agent may reasonably
request.
“Subsidiary”:
as to
any Person, a corporation, partnership, limited liability company or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority
of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, (a) all references to a “Subsidiary”
or to “Subsidiaries” in this Agreement shall refer to a Restricted Subsidiary or
Restricted Subsidiaries of the Borrower and (b) no Unrestricted Subsidiary
shall
be a “Subsidiary” of the Borrower for any purpose under this
Agreement.
“Subsidiary
Guarantor”:
each
Subsidiary of the Borrower that is a party to the Guarantee and Collateral
Agreement.
“Syndication
Agent”:
as
defined in the preamble hereto.
“Term
Loan”:
as
defined in Section 2.1(a)(i).
“Total
Leverage Ratio”:
as of
the last day of any period of four consecutive fiscal quarters, the ratio of
(a) Consolidated Total Debt on such day to (b) Consolidated EBITDA of
the Borrower and its Subsidiaries for such period.
“Transferee”:
as
defined in Section 9.14.
“Type”:
as to
any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.
“United
States”
and
“U.S.”:
the
United States of America.
“Unrestricted
Cash”:
the
result of (a) all cash and Cash Equivalents of the Borrower and its Restricted
Subsidiaries and Unrestricted Subsidiaries on a consolidated basis minus
(b) all
Restricted Cash.
“Unrestricted
Subsidiary”:
any
Subsidiary of the Borrower that is not a Restricted Subsidiary.
“Unzipped
Litigation”:
Unzipped Apparel, LLC et al. vs. Sweet Sportswear, LLC et al., Case No.
BC319612, filed with the Superior Court of the State of California for the
County of Los Angeles.
“Wal-Mart
License Agreement”:
that
certain letter agreement, dated as of January 9, 2004, between Danskin Now,
Inc.
and Wal-Mart Stores, Inc., as amended, supplemented or otherwise modified from
time to time.
20
“Wholly
Owned Subsidiary”:
as to
any Person, any other Person all of the Capital Stock of which (other than
directors’ qualifying shares required by law) is owned directly or indirectly by
such Person.
“Wholly
Owned Subsidiary Guarantor”:
any
Subsidiary Guarantor that is a Wholly Owned Subsidiary of the
Borrower.
1.2 Other
Definitional Provisions.
(a)
Unless
otherwise specified therein, all terms defined in this Agreement shall have
the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.
(b) As
used
herein and in the other Loan Documents, and any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms relating to
the
Borrower and its Subsidiaries not defined in Section 1.1
and
accounting terms partly defined in Section 1.1,
to the
extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The
words
“hereof”, “herein” and “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, Schedule and Exhibit references are
to
this Agreement unless otherwise specified.
(d) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
(e) All
calculations of the Total Leverage Ratio shall be calculated to the same number
of decimal places as the relevant ratios are expressed in and shall be rounded
upward if the number in the decimal place immediately following the last
calculated decimal place is five or greater. For example, if the relevant ratio
is to be calculated to the hundredth decimal place and the calculation of the
ratio is 5.126, the ratio will be rounded up to 5.13.
SECTION 2. AMOUNT
AND TERMS OF COMMITMENTS
2.1 Commitments. (a)
Subject
to the terms and conditions hereof, (i) the Existing Lender made a loan (the
“Term
Loan”)
to the
Borrower on the Initial Closing Date in an amount of $212,500,000 and (ii)
the
Incremental Lenders severally agree to make one or more term loans (each an
“Incremental
Loan”)
to the
Borrower to the extent provided in Section 2.1(b).
The
Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2
and 2.8.
(b) The
Borrower and any one or more Lenders (including New Lenders) may from time
to
time agree that such Lenders shall make, obtain or increase the amount of their
Term Loans or Incremental Loans, as applicable, by executing and delivering
to
the Administrative Agent an Increased Facility Activation Notice specifying
(i)
the amount of such increase, (ii) the applicable Increased Facility Closing
Date
and (iii) in the case of Incremental Loans, (x) the applicable Incremental
Loan
Maturity Date, (y) the amortization schedule for such Incremental Loans, which
shall comply with Section 2.3,
and (z)
the Applicable Margin for such Incremental Loans; provided
that,
(A) after giving pro forma
effect
to the making of any such Loans, the Borrower shall be in compliance with the
covenant contained in Section 6.1,
(B) no
Default or Event of Default has occurred and is continuing or would result
after
giving effect to the making of such Loans or the application of the proceeds
therefrom, (C) the aggregate amount of borrowings of incremental Term Loans
or
Incremental Loans pursuant to this Section 2.1(b)
shall
not exceed an amount equal to $100,000,000, (D) each borrowing of incremental
Term Loans or Incremental Loans pursuant to this Section 2.1(b)
shall be
in a minimum amount of at least $25,000,000 and (E) no more than four Increased
Facility Closing Dates may be selected by the Borrower after the Initial Closing
Date. No Lender shall have any obligation to participate in any increase
described in this paragraph unless it agrees to do so in its sole discretion.
The Incremental Loans shall rank pari passu
in right
of payment and of security with the Term Loans and, except with regard to
pricing and as set forth above, shall be treated substantially the same as
or
less favorably than the Term Loans (including with respect to mandatory and
voluntary prepayments and voting rights). Commitments in respect of Incremental
Loans shall be Commitments under this Agreement.
21
(c) Any
additional bank, financial institution or other entity which, with the consent
of the Borrower and the Administrative Agent (which consent shall not be
unreasonably withheld), elects to become a “Lender” under this Agreement in
connection with any transaction described in Section 2.1(b)
shall
execute a New Lender Supplement (each, a “New
Lender Supplement”),
substantially in the form of Exhibit K, whereupon such bank, financial
institution or other entity (a “New
Lender”)
shall
become a Lender for all purposes and to the same extent as if originally a
party
hereto and shall be bound by and entitled to the benefits of this
Agreement.
2.2 Procedure
for Borrowing. (a)
[RESERVED].
(b) The
Borrower shall deliver to the Administrative Agent a Borrowing Notice (which
Borrowing Notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, one Business Day prior to the anticipated
Increased Facility Closing Date) requesting that the Incremental Lenders make
the incremental Term Loans or Incremental Loans, as applicable, on such
Increased Facility Closing Date. Upon receipt of such Borrowing Notice the
Administrative Agent shall promptly notify each Incremental Lender thereof.
Not
later than 12:00 Noon, New York City time, on the Borrowing Date each
Incremental Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the incremental
Term Loans or Incremental Loans, as applicable, to be made by such Incremental
Lender. Not later than 1:00 P.M., New York City time, on the Borrowing Date
the Administrative Agent shall make available to the Borrower the aggregate
of
the amounts made available to the Administrative Agent by the Incremental
Lenders, in like funds as received by the Administrative Agent.
2.3 Repayment
of Loans.
(a)
The Term
Loan of each Lender shall mature in 24 consecutive quarterly installments,
commencing on June 30, 2007 each of which shall be in an amount equal to such
Lender’s Loan Percentage multiplied the amount set forth below opposite such
installment, as each such amount may be adjusted by the application of Section
2.13(b) thereto.
Installment
|
Quarterly
Payment
|
||
June
30, 2007
|
$
|
531,250
|
|
September
30, 2007
|
531,250
|
||
December
31, 2007
|
531,250
|
||
March
31, 2008
|
531,250
|
||
June
30, 2008
|
531,250
|
||
September
30, 2008
|
531,250
|
||
December
31, 2008
|
531,250
|
||
March
31, 2009
|
531,250
|
||
June
30, 2009
|
531,250
|
||
September
30, 2009
|
531,250
|
||
December
31, 2009
|
531,250
|
||
March
31, 2010
|
531,250
|
||
June
30, 2010
|
531,250
|
||
September
30, 2010
|
531,250
|
||
December
31, 2010
|
531,250
|
||
March
31, 2011
|
531,250
|
||
June
30, 2011
|
531,250
|
||
September
30, 2011
|
531,250
|
||
December
31, 2011
|
531,250
|
||
March
31, 2012
|
531,250
|
||
June
30, 2012
|
531,250
|
||
September
30, 2012
|
531,250
|
||
December
31, 2012
|
531,250
|
||
Loan
Maturity Date
|
$
|
200,281,250
|
22
(b) The
Incremental Loans of each Incremental Lender shall mature in consecutive
installments (which shall be no more frequent than quarterly) as specified
in
the Increased Facility Activation Notice pursuant to which such Incremental
Loans were made, provided
that,
(i) such Incremental Loans shall not amortize more rapidly, on a percentage
basis, than the Term Loans and (ii) such Incremental Loans shall not finally
mature prior to the Loan Maturity Date.
2.4 Repayment
of Loans; Evidence of Debt.
(a)
The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for
the account of the appropriate Lender (i) the outstanding principal amount
of
the Term Loan of such Lender on the Loan Maturity Date (or on such earlier
date
on which the Term Loans become due and payable pursuant to Section 7)
and
(ii) the outstanding principal amount of the Incremental Loan of such Lender
on
the relevant Incremental Loan Maturity Date (or on such earlier date on which
the Incremental Loans become due and payable pursuant to Section 7).
The
Borrower hereby further agrees to pay interest on the unpaid principal amount
of
the Loans from time to time outstanding from the Initial Closing Date until
payment in full thereof at the rates per annum, and on the dates, set forth
in
Section 2.10.
(b) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing indebtedness of the Borrower to such Lender resulting from
the Loan of such Lender, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement.
(c) The
Administrative Agent, on behalf of the Borrower, shall maintain the Register
pursuant to Section 9.6(d),
and a
subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder and any Note evidencing such Loan, the Type
of such Loan and each Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.
(d) The
entries made in the Register and the accounts of each Lender maintained pursuant
to Section 2.4(b)
shall,
to the extent permitted by applicable law, be prima facie
evidence
of the existence and amounts of the obligations of the Borrower therein
recorded; provided,
however,
that
the failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loan made
to
the Borrower by such Lender in accordance with the terms of this
Agreement.
23
(e) The
Borrower agrees that, upon the request to the Administrative Agent by any
Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing the Loan of such Lender,
substantially in the form of Exhibit F (a “Note”),
with
appropriate insertions as to date and principal amount.
2.5 Fees,
etc.
The
Borrower agrees to pay to the Administrative Agent the fees in the amounts
and
on the dates from time to time agreed to in writing by the Borrower and the
Administrative Agent.
2.6 Optional
Prepayments.
The
Borrower may at any time and from time to time prepay the Loans, in whole or
in
part, without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent no later than 11:00 A.M., New York City time, three
Business Days prior thereto in the case of Eurodollar Loans and no later than
11:00 A.M., New York City time, one Business Day prior thereto in the case
of
Base Rate Loans, which notice shall specify the date and amount of such
prepayment and whether such prepayment is of Eurodollar Loans or Base Rate
Loans; provided,
that if
a Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.16.
Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof. If any such notice is given, the amount specified
in
such notice shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid. Partial prepayments
of
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
2.7 Mandatory
Prepayments.
(a)
Unless
the Required Lenders shall otherwise agree, if any Indebtedness shall be
incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness
permitted to be incurred under Section 6.2),
then
on the date of such incurrence, the Loans shall be prepaid, by an amount equal
to the amount of the Net Cash Proceeds of such incurrence. The provisions of
this Section 2.7(a) do not constitute a consent to the incurrence of any
Indebtedness by the Borrower or any of its Subsidiaries.
(b) Unless
the Required Lenders shall otherwise agree, if on any date the Borrower or
any
of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event then, unless a Reinvestment Notice shall be delivered in respect
thereof on or prior to the date of such Asset Sale or Recovery Event, on the
date of receipt by the Borrower or such Subsidiary of such Net Cash Proceeds,
the Loans shall be prepaid, by an amount equal to the amount of such Net Cash
Proceeds; provided,
that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date the Loans
shall be prepaid, by an amount equal to the Reinvestment Prepayment Amount
with
respect to the relevant Reinvestment Event. The provisions of this Section
do
not constitute a consent to the consummation of any Disposition not permitted
by
Section 6.5.
(c) Unless
the Required Lenders shall otherwise agree, if, for any fiscal year of the
Subsidiaries commencing with the fiscal year ending on December 31, 2007, there
shall be Excess Cash Flow, then, on the relevant Excess Cash Flow Application
Date, the Loans shall be prepaid by an amount equal to the ECF Percentage of
such Excess Cash Flow. Each such prepayment shall be made on a date (an
“Excess
Cash Flow Application Date”)
no
later than five days after the earlier of (i) the date on which the
financial statements of the Borrower referred to in Section 5.1(a),
for the
fiscal year with respect to which such prepayment is made, are required to
be
delivered to the Lenders and (ii) the date such financial statements are
actually delivered.
2.8 Conversion
and Continuation Options.
(a)
The
Borrower may elect from time to time to convert Eurodollar Loans to Base Rate
Loans by giving the Administrative Agent at least two Business Days’ prior
irrevocable notice of such election, provided
that any
such conversion of Eurodollar Loans may be made only on the last day of an
Interest Period with respect thereto. The Borrower may elect from time to time
to convert Base Rate Loans to Eurodollar Loans by giving the Administrative
Agent at least three Business Days’ prior irrevocable notice of such election
(which notice shall specify the length of the initial Interest Period therefor),
provided
that no
Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event
of Default has occurred and is continuing and the Administrative Agent has,
or
the Required Lenders have, determined in its or their sole discretion not to
permit such conversions or (ii) after the date that is one month prior to
the Loan Maturity Date. Upon receipt of any such notice the Administrative
Agent
shall promptly notify each Lender thereof.
24
(b) The
Borrower may elect to continue any Eurodollar Loan as such upon the expiration
of the then current Interest Period with respect thereto by giving irrevocable
notice to the Administrative Agent, in accordance with the applicable provisions
of the term “Interest Period” set forth in Section 1.1,
of the
length of the next Interest Period to be applicable to such Loan, provided
that no
Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has, or the Required
Lenders have, determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the Loan
Maturity Date, and provided,
further,
that if
the Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be converted automatically to Base Rate Loans on
the
last day of such then expiring Interest Period. Upon receipt of any such notice
the Administrative Agent shall promptly notify each Lender thereof.
2.9 Minimum
Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and
all
selections of Interest Periods shall be in such amounts and be made pursuant
to
such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans comprising each Eurodollar Tranche
shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof
and (b) no more than ten Eurodollar Tranches shall be outstanding at any
one time.
2.10 Interest
Rates and Payment Dates.
(a)
Each
Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day
plus the Applicable Margin in effect for such day.
(b) Each
Base
Rate Loan
shall bear interest for each day on which it is outstanding at a rate per annum
equal to the Base Rate in effect for such day plus
the
Applicable Margin in effect for such day.
(c) (i)
If
all or a portion of the principal amount of any Loan shall not be paid when
due
(whether at the stated maturity, by acceleration or otherwise), all outstanding
Loans (whether or not overdue) (to the extent legally permitted) shall bear
interest at a rate per annum that is equal to the rate that would otherwise
be
applicable thereto pursuant to the foregoing provisions of this Section
plus
2% and
(ii) if all or a portion of any interest payable on any Loan or any fee or
other amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to Base Rate Loans
plus
2% in
each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (after as well as before
judgment).
(d) Interest
shall be payable in arrears on each Interest Payment Date, provided
that
interest accruing pursuant to paragraph (c)
of this
Section shall be payable from time to time on demand.
25
2.11 Computation
of Interest and Fees.
(a)
Interest, fees and commissions payable pursuant hereto shall be calculated
on
the basis of a 360-day year for the actual days elapsed, except that, with
respect to Base Rate Loans on which interest is calculated on the basis of
the
Prime Rate, the interest thereon shall be calculated on the basis of a 365-
(or
366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurodollar Rate. Any change in
the
interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening
of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of the effective date and the amount of each such change in interest
rate.
(b) Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower
and
the Lenders in the absence of manifest error. The Administrative Agent shall,
at
the request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 2.10(a)
or
(b).
2.12 Inability
to Determine Interest Rate.
If
prior to the first day of any Interest Period:
(a) the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b) the
Administrative Agent shall have received notice from the Required Lenders that
the Eurodollar Rate determined or to be determined for such Interest Period
will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the
Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice
is
given (x) any Eurodollar Loans requested to be made on the first day of
such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the last day of the then
current Interest Period with respect thereto, to Base Rate Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made or continued as such, nor shall the Borrower have the right
to convert Loans to Eurodollar Loans.
2.13 Pro
Rata Treatment and Payments.
(a)
Each
borrowing by the Borrower from the Lenders hereunder shall be made pro rata
according to the respective Loan Percentages of the Lenders. Each payment of
interest in respect of the Loans and each payment in respect of fees payable
hereunder shall be applied to the amounts of such obligations owing to the
Lenders pro rata according to the respective amounts then due and owing to
the
Lenders.
(b) Each
payment on account of principal of the Loans shall be allocated among the
Lenders pro rata
based on
the principal amount of the Loans held by the Lenders. Each optional and
mandatory prepayment shall be applied to the quarterly installments (other
than
the installment due on the Maturity Date) of the Loans set forth in Section
2.3(a) (as such quarterly installments may be adjusted by the application of
optional and mandatory prepayments pursuant to this section) pro rata
based on
the remaining outstanding principal amount of such quarterly installments.
Amounts prepaid on account of the Loans may not be reborrowed.
26
(c) The
application of any payment of Loans (including optional and mandatory
prepayments) shall be made, first,
to Base
Rate Loans and, second,
to
Eurodollar Loans. Each payment of the Loans shall be accompanied by accrued
interest to the date of such payment on the amount paid.
(d) All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 12:00 Noon, New York City
time, on the due date thereof to the Administrative Agent, for the account
of
the relevant Lenders, at the Payment Office, in Dollars and in immediately
available funds. Any payment made by the Borrower after 12:00 Noon, New
York City time, on any Business Day shall be deemed to have been on the next
succeeding Business Day. If any payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall
accrue at the then applicable rate during such extension.
(e) Unless
the Administrative Agent shall have been notified in writing by any Lender
prior
to a borrowing that such Lender will not make the amount that would constitute
its share of such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount available
to the Administrative Agent, and the Administrative Agent may, in reliance
upon
such assumption, make available to the Borrower a corresponding amount. If
such
amount is not made available to the Administrative Agent by the required time
on
the Borrowing Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to the greater
of
(i) the Federal Funds Effective Rate and (ii) a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation, for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative
Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender’s share of
such borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the
rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.
(f) Unless
the Administrative Agent shall have been notified in writing by the Borrower
prior to the date of any payment due to be made by the Borrower hereunder that
the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata
shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days after such due date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing contained in this Section shall
be
deemed to limit the rights of the Administrative Agent or any Lender against
the
Borrower.
(g) Upon
receipt by the Administrative Agent of payments on behalf of Lenders, the
Administrative Agent shall promptly distribute such payments to the Lender
or
Lenders entitled thereto, in like funds as received by the Administrative
Agent.
27
2.14 Requirements
of Law.
(a)
If the
adoption of or any change in any Requirement of Law (other than Organizational
Documents) or in the interpretation or application thereof or compliance by
any
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
Initial Closing Date:
(i) shall
subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any Eurodollar Loan made by it, or change the basis of taxation
of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 2.15,
Excluded Taxes and changes in the rate of tax on the overall net income of
such
Lender);
(ii) shall
impose, modify or hold applicable any reserve, special deposit, compulsory
loan
or similar requirement against assets held by, deposits or other liabilities
in
or for the account of, advances, loans or other extensions of credit by, or
any
other acquisition of funds by, any office of such Lender that is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(iii) shall
impose on such Lender any other condition;
and
the
result of any of the foregoing is to increase the cost to such Lender, by an
amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary
to
compensate such Lender for such increased cost or reduced amount receivable.
If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If
any
Lender shall have determined that the adoption of or any change in any
Requirement of Law (other than Organizational Documents) regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the Initial Closing Date shall have
the effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction; provided
that the
Borrower shall not be required to compensate a Lender pursuant to this paragraph
for any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation therefor;
and provided further
that, if
the circumstances giving rise to such claim have a retroactive effect, then
such
six-month period shall be extended to include the period of such retroactive
effect.
(c) A
certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. The obligations
of
the Borrower pursuant to this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
28
2.15 Taxes.
(a)
All
payments made by the Borrower under this Agreement shall be made free and clear
of, and without deduction or withholding for or on account of, any present
or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding Excluded Taxes.
If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (“Non-Excluded
Taxes”)
or any
Other Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to such
Agent or such Lender shall be increased to the extent necessary to yield to
the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes
and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement; provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of
paragraph (d)
or
(e)
of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
(a).
(b) In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(c) Whenever
any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly
as possible thereafter the Borrower shall send to the Administrative Agent
for
the account of the Administrative Agent or Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by
any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of
the
Loans and all other amounts payable hereunder.
(d) Each
Lender (or Transferee) that is not a “U.S.
Person”
as
defined in Section 7701(a)(30) of the Code (each such Lender, a “Non-U.S.
Lender”)
shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have
been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of “portfolio interest” a statement substantially
in the form of Exhibit G and a Form W-8BEN, or any subsequent versions
thereof or successors thereto properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement
and
the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case
of
any Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered
by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower
at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
29
(e) A
Lender
that is entitled to an exemption from or reduction of non-U.S. withholding
tax
under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate, provided
that
such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.
2.16 Indemnity.
The
Borrower agrees to indemnify each Lender for, and to hold each Lender harmless
from, any loss or expense that such Lender may sustain or incur as a consequence
of (a) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement,
(b) default by the Borrower in making any prepayment after the Borrower has
given a notice thereof in accordance with the provisions of this Agreement
or
(c) the making of a prepayment or conversion of Eurodollar Loans on a day
that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of
(i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.17 Illegality.
Notwithstanding any other provision herein, if the adoption of or any change
in
any Requirement of Law (other than Organizational Documents) or in the
interpretation or application thereof shall make it unlawful for any Lender
to
make or maintain Eurodollar Loans as contemplated by this Agreement,
(a) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar
Loans shall forthwith be canceled and (b) such Lender’s Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days of the then current Interest Periods
with respect to such Loans or within such earlier period as required by law.
If
any such conversion of a Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the Borrower
shall
pay to such Lender such amounts, if any, as may be required pursuant to
Section 2.16.
2.18 Change
of Lending Office.
Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 2.14,
2.15(a)
or
2.17
with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object
of
avoiding the consequences of such event; provided, that such designation is
made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage,
and
provided, further, that nothing in this Section shall affect or postpone any
of
the obligations of any Borrower or the rights of any Lender pursuant to Section
2.14,
2.15(a)or
2.17.
30
2.19 Replacement
of Lenders under Certain Circumstances.
The
Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.14
or
2.15
or gives
a notice of illegality pursuant to Section 2.17
or
(b) defaults in its obligation to make Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict
with any Requirement of Law, (ii) no Event of Default shall have occurred
and be continuing at the time of such replacement, (iii) prior to any such
replacement, such Lender shall have taken no action under
Section 2.18
so as to
eliminate the continued need for payment of amounts owing pursuant to
Section 2.14
or
2.15
or to
eliminate the illegality referred to in such notice of illegality given pursuant
to Section 2.17,
(iv) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date
of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.16
(as
though Section 2.16
were
applicable) if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall
be reasonably satisfactory to the Administrative Agent, (vii) the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 9.6
(provided that the replaced Lender shall not be obligated to pay the
registration and processing fee referred to therein), (viii) the Borrower
shall pay all additional amounts (if any) required pursuant to
Section 2.14
or
2.15,
as the
case may be, in respect of any period prior to the date on which such
replacement shall be consummated, and (ix) any such replacement shall not
be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender.
SECTION 3. REPRESENTATIONS
AND WARRANTIES
To
induce
the Administrative Agent and the Lenders to enter into this Agreement and to
make the Loans the Borrower hereby represents and warrants to the Administrative
Agent and each Lender that:
3.1 Financial
Condition.
(a)
The
unaudited pro forma consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 2006 (including the notes thereto)
(the “Pro
Forma Balance Sheet”),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisitions, (ii) the Term Loans made on the Initial
Closing Date and the use of proceeds thereof and (iii) the payment of
estimated aggregate fees and expenses in connection with the foregoing. The
Pro
Forma Balance Sheet has been prepared based on the best information available
to
the Borrower as of the date of delivery thereof, and presents fairly on a pro
forma basis the estimated financial position of the Borrower and its
consolidated Subsidiaries as at December 31, 2006, assuming that the events
specified in the preceding sentence had actually occurred at such
date.
(b) The
audited consolidated balance sheets of the Borrower as at December 31, 2004,
December 31, 2005 and December 31, 2006, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from BDO Xxxxxxx, LLP, copies
of
which have heretofore been furnished to each Lender, present fairly the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for
the
respective fiscal years then ended. All such financial statements, including
the
related schedules and notes thereto, have been prepared in accordance with
GAAP
applied consistently throughout the periods involved (except as approved by
the
aforementioned firm of accountants and disclosed therein). The Borrower and
its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent financial
statements referred to in this paragraph. During the period from December 31,
2006 to and including the date hereof there has been no Disposition by the
Borrower of any material part of its business or Property other than in
connection with Acquisitions.
31
3.2 No
Change.
Since
December 31, 2006 there has been no development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
3.3 Corporate
Existence; Compliance with Law.
Each of
the Borrower and its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has the corporate or limited liability company power and authority, as
applicable, and the legal right, to own and operate its Property, to lease
the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation, limited
liability company or other organization and in good standing under the laws
of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification and (d) is in
compliance with all Requirements of Law except to the extent that the failure
to
comply therewith could not, in the aggregate, reasonably be expected to have
a
Material Adverse Effect.
3.4 Corporate
Power; Authorization; Enforceable Obligations.
Each
Loan Party has the corporate or limited liability company power and authority,
as applicable, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party, and in the case of the Borrower, to consummate
the Acquisitions and to borrow hereunder. Each Loan Party has taken all
necessary corporate or limited liability company action, as applicable, to
authorize the execution, delivery and performance of the Loan Documents to
which
it is a party, and in the case of the Borrower, to consummate the Acquisitions
and to authorize the borrowings on the terms and conditions of this Agreement.
No consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the consummation of the Acquisitions, the borrowings hereunder
or the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 3.4,
which
consents, authorizations, filings and notices have been obtained or made and
are
in full force and effect and (ii) the filings referred to in Section
3.19(a).
Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
that is a party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party that is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited
by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity
or
at law).
3.5 No
Legal Bar.
The
execution, delivery and performance of this Agreement and the other Loan
Documents, the consummation of the Acquisitions, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Subsidiaries and will
not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any
such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to the Borrower
or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
3.6 No
Material Litigation.
No
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against
any
of their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or
(b) that could reasonably be expected to have a Material Adverse Effect (as
determined in good faith by the Borrower).
32
3.7 No
Default.
Neither
the Borrower nor any of its Subsidiaries is in default under or with respect
to
any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default
has
occurred and is continuing.
3.8 Ownership
of Property; Liens.
The
Borrower and each of its Subsidiaries has title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other Property, and none of such Property is
subject to any Lien except as permitted by Section 6.3.
3.9 Intellectual
Property.
Each of
the Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted free and clear
of all Liens, except as permitted by Section 6.3. Each of the Subsidiaries’
Trademarks (as defined in the Guarantee and Collateral Agreement) and all other
material Intellectual Property of the Subsidiaries are valid and enforceable,
not abandoned and unexpired. No claim has been threatened in writing or has
been
asserted and is pending, and no judgment regarding the same has been rendered
by
a court of competent jurisdiction, by any Person challenging or questioning
the
use of such Intellectual Property or the validity or effectiveness of such
Intellectual Property, nor do the Subsidiaries know of any valid basis for
any
such claim. No Subsidiary is a party to a material Intellectual Property license
or other material agreement concerning Intellectual Property, nor is or is
alleged in writing to be, in breach or default thereunder. The Borrower and
its
Subsidiaries represent that the transactions contemplated by this Agreement
shall not impair the Intellectual Property rights of any of the Subsidiaries.
The Borrower and its Subsidiaries take reasonable steps to protect and maintain
all material Trademarks and other material Intellectual Property of the
Subsidiaries, including executing all appropriate confidentiality agreements
and
filing for appropriate patents and registrations. The use of Intellectual
Property by the Subsidiaries does not impair or infringe on the rights of any
Person in any material respect.
3.10 Taxes.
The
Borrower and each of its Subsidiaries has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed
and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its Property and all other taxes, fees
or
other charges imposed on it or any of its Property by any Governmental Authority
(other than any the amount or validity of which are currently being contested
in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be); and no tax Lien has been filed, and, to
the
knowledge of the Borrower, no claim is being asserted, with respect to any
such
tax, fee or other charge.
3.11 Federal
Regulations.
No part
of the proceeds of any Loans, and no other extensions of credit hereunder,
will
be used for “purchasing” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from
time to time hereafter in effect or for any purpose that violates the provisions
of Regulation U. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement
to
the foregoing effect in conformity with the requirements of FR Form G-3 or
FR Form U-1 referred to in Regulation U.
3.12 Labor
Matters.
There
are no strikes or other labor disputes against the Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrower, threatened that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. Hours worked by and payment made to employees of the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that (individually or in the aggregate) could reasonably be expected
to
have a Material Adverse Effect. All payments due from the Borrower or any of
its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability
on
the books of the Borrower or the relevant Subsidiary.
33
3.13 ERISA.
Neither
a Reportable Event nor an “accumulated funding deficiency” (within the meaning
of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation
is
made or deemed made with respect to any Plan, and each Plan has complied in
all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of
the
PBGC or a Plan has arisen, during such five-year period. The present value
of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior
to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by a material
amount. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted
or
could reasonably be expected to result in a material liability under ERISA,
and
neither the Borrower nor any Commonly Controlled Entity would become subject
to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans
as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. No such Multiemployer Plan is in Reorganization or
Insolvent.
3.14 Investment
Company Act; Other Regulations.
No Loan
Party is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other
than
Regulation X of the Board) that limits its ability to incur
Indebtedness.
3.15 Subsidiaries.
(a)
The
Subsidiaries listed on Schedule 3.15
constitute all the Subsidiaries of the Borrower at the Initial Closing Date.
Schedule 3.15
sets
forth as of the Initial Closing Date the name and jurisdiction of incorporation
of each Subsidiary and, as to each Subsidiary, the percentage of each class
of
Capital Stock owned by each Loan Party.
(b) There
are
no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments of any nature relating to any Capital Stock of the
Borrower or any Subsidiary (other than any Earn-Out Consideration obligations
payable in Capital Stock of the Borrower).
3.16 Use
of
Proceeds.
The
proceeds of the Term Loans shall be used to finance the Rocawear Acquisition
and
to pay related fees and expenses. The proceeds of Incremental Loans shall be
used to finance Permitted Acquisitions, Permitted Foreign Subsidiary
Acquisitions, to pay related fees and expenses and for general corporate
purposes.
3.17 Environmental
Matters.
Other
than exceptions to any of the following that could not, individually or in
the
aggregate, reasonably be expected to have a Material Adverse
Effect:
(a) The
Borrower and its Subsidiaries: (i) are, and within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all Environmental Permits (each of which is
in full force and effect) required for any of their current or intended
operations or for any property owned, leased, or otherwise operated by any
of
them; (iii) are, and within the period of all applicable statutes of
limitation have been, in compliance with all of their Environmental Permits;
and
(iv) reasonably believe that: each of their Environmental Permits will be
timely renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.
34
(b) Materials
of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Borrower or any of
its
Subsidiaries, or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably
be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in
costs
to the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower’s or any of its Subsidiaries’ continued operations, or
(iii) impair the fair saleable value of any real property owned or leased
by the Borrower or any of its Subsidiaries.
(c) There
is
no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law
to
which the Borrower or any of its Subsidiaries is, or to the knowledge of the
Borrower or any of its Subsidiaries will be, named as a party that is pending
or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened.
(d) Neither
the Borrower nor any of its Subsidiaries has received any written request for
information, or been notified that it is a potentially responsible party under
or relating to the federal Comprehensive Environmental Response, Compensation,
and Liability Act or any similar Environmental Law, or with respect to any
Materials of Environmental Concern.
(e) Neither
the Borrower nor any of its Subsidiaries has entered into or agreed to any
consent decree, order, or settlement or other agreement, or is subject to any
judgment, decree, or order or other agreement, in any judicial, administrative,
arbitral, or other forum for dispute resolution, relating to compliance with
or
liability under any Environmental Law.
(f) Neither
the Borrower nor any of its Subsidiaries has assumed or retained, by contract
or
operation of law, any liabilities of any kind, fixed or contingent, known or
unknown, under any Environmental Law or with respect to any Material of
Environmental Concern.
3.18 Accuracy
of Information, etc. To
the
best knowledge of the Loan Parties, no statement or information contained in
this Agreement, any other Loan Document or any other document, certificate
or
statement furnished to the Administrative Agent or the Lenders or any of them,
by or on behalf of any Loan Party in writing for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state
a
material fact necessary to make the statements contained herein or therein,
taken as a whole, not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties
contained in the Acquisition Documentation are true and correct in all material
respects. There is no fact known to any Loan Party that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Loan Documents, or in any other documents, certificates
and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
35
3.19 Security
Documents.
(a)
The
Guarantee and Collateral Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and
enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when any stock certificates representing such Pledged
Stock are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when financing
statements in appropriate form are filed in the offices specified on
Schedule 3.19(a) (which financing statements have been duly completed and
delivered to the Administrative Agent) and such other filings as are specified
on Schedule 3 to the Guarantee and Collateral Agreement have been
completed, the Administrative Agent’s Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), will be perfected to the extent a security interest
in such Collateral can be perfected by the filing of a financing statement
in
such offices, in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted
by
Section 6.3).
(b) As
of the
Initial Closing Date, neither the Borrower nor any of its Subsidiaries owns
any
real property.
3.20 Solvency.
Each
Loan Party is, and after giving effect to the Acquisitions and the incurrence
of
all Indebtedness and obligations being incurred in connection herewith and
therewith will be and will continue to be, Solvent.
3.21 Certain
Documents.
The
Borrower has delivered to the Administrative Agent a complete and correct copy
of the Acquisition Documentation and the Specified License Agreements, including
any amendments, supplements or modifications with respect to any of the
foregoing.
SECTION 4. CONDITIONS
PRECEDENT
(A) This
Agreement shall take effect upon satisfaction of the following conditions
precedent:
(i) The
Administrative Agent shall have received this Agreement, executed and delivered
by the Borrower and the other parties hereto.
(ii) Each
of
the representations and warranties made by any Loan Party in or pursuant to
the
Loan Documents shall be true and correct in all material respects on and as
of
the date hereof.
(iii) No
Default or Event of Default shall have occurred and be continuing on the date
hereof.
(B) The
agreement of the Existing Lender to make the Term Loan requested to be made
by
it on the Initial Closing Date was subject to the satisfaction, prior to or
concurrently with the making of such Term Loan on the Initial Closing Date,
of
all of the following conditions precedent, and the agreement of each Incremental
Lender to make incremental Term Loans or Incremental Loans, as applicable,
on
any Increased Facility Closing Date, is subject to the satisfaction, prior
to or
concurrently with the making of such incremental Term Loans or Incremental
Loans, as the case may be, on such Increased Facility Closing Date of the
conditions precedent set forth in Sections 4.5, 4.9, 4.11, 4.12(i)-(ii), 4.16,
4.17 and 4.18.
36
4.1 Loan
Documents.
The
Administrative Agent shall have received (i) the Existing Credit Agreement,
executed and delivered by the Borrower and (ii) the Guarantee and
Collateral Agreement, executed and delivered by the Borrower and each Subsidiary
Guarantor.
4.2 Acquisitions.
Each
Acquisition shall have been consummated in accordance with the terms of the
applicable Acquisition Agreement, as in effect on the date thereof, in all
material respects without any waiver, modification or amendment thereof that
is
materially adverse to the Lenders (as determined by the Administrative Agent),
unless consented to by the Administrative Agent.
4.3 Pro
Forma Balance Sheet; Financial Statements.
The
Lenders shall have received (i) the Pro Forma Balance Sheet,
(ii) audited consolidated financial statements of the Borrower for the
2004, 2005 and 2006 fiscal years and (iii) unaudited interim consolidated
financial statements of the Borrower for each quarterly period ended subsequent
to the date of the latest applicable financial statements delivered pursuant
to
clause (ii) of this paragraph as to which such financial statements are
publicly available.
4.4 Minimum
Guaranteed Revenue.
The
Administrative Agent shall have received a certificate, dated as of the Initial
Closing Date and signed by the chief financial officer of the Borrower,
certifying that, as of the Initial Closing Date, the pro forma
minimum
guaranteed revenue (defined
as contractual guaranteed minimums of royalty revenue and advertising) of the
Subsidiaries for the calendar year ending on December 31, 2007, shall equal
at
least $30,000,000.
4.5 Approvals.
All
governmental and third party approvals necessary in connection with the Rocawear
Acquisition, the continuing operations of the Borrower and its Subsidiaries
and
the transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the Rocawear
Acquisition or the financing contemplated hereby.
4.6 Related
Agreements.
The
Administrative Agent shall have received (in a form reasonably satisfactory
to
the Administrative Agent), true and correct copies, certified as to authenticity
by the Borrower, of (i) each Acquisition Agreement, (ii) the Specified
License Agreements, (iii) the Danskin License Agreement and (iv) such other
documents or instruments as may be reasonably requested by the Administrative
Agent, including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Loan Parties may be a
party.
4.7 Fees.
The
Lenders and the Administrative Agent shall have received all fees required
to be
paid, and all reasonable expenses for which invoices have been presented
reasonably in advance of the Initial Closing Date (including reasonable fees,
disbursements and other charges of counsel to the Administrative Agent), on
or
before the Initial Closing Date. All such amounts will be paid with proceeds
of
Term Loans made on the Initial Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before
the
Initial Closing Date.
4.8 Business
Plan.
The
Lenders shall have received a satisfactory business plan for fiscal years 2007
-
2012 and a satisfactory written analysis of the business and prospects of the
Borrower and its Subsidiaries for the period from the Initial Closing Date
through 2012.
37
4.9 Solvency
Certificate.
The
Lenders shall have received a reasonably satisfactory solvency certificate
from
the chief financial officer of the Borrower which shall document the solvency
of
the Borrower and its Subsidiaries considered as a whole after giving effect
to
the transactions contemplated hereby.
4.10 Lien
Searches.
The
Administrative Agent shall have received the results of a recent lien search
in
the “location” (as defined in the Uniform Commercial Code (“UCC”))
of
each of the Sellers and each such search shall reveal no liens on any of such
assets, except for (i) Liens permitted by Section 6.3 and (ii) Liens to be
discharged substantially concurrently with the initial borrowing by the Borrower
under this Agreement pursuant to documentation reasonably satisfactory to the
Administrative Agent.
4.11 Closing
Certificate.
The
Administrative Agent shall have received a certificate of each Loan Party,
dated
the Initial Closing Date or the Increased Facility Closing Date, as applicable,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
4.12 Legal
Opinions.
The
Administrative Agent shall have received the following executed legal
opinions:
(i) the
legal
opinion of Blank Rome LLP, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit E-1;
(ii) the
legal
opinion of Xxxxxx Xxxxxxx, general counsel of the Borrower and its Subsidiaries,
substantially in the form of Exhibit E-2; and
(iii) to
the
extent consented to by the relevant counsel, each legal opinion, if any,
delivered in connection with the Acquisition Agreements.
Each
such
legal opinion referred to in clauses (i) and (ii) shall cover such other matters
incident to the transactions contemplated by this Agreement as the
Administrative Agent may reasonably require and shall be addressed to the
Administrative Agent and the Lenders.
4.13 Pledged
Stock; Stock Powers.
The
Administrative Agent shall have received the certificates representing the
shares of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor
thereof.
4.14 Filings,
Registrations and Recordings.
Each
document (including, without limitation, any UCC financing statement) required
by the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create
in
favor of the Administrative Agent, for the benefit of the Secured Parties,
a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.3), shall have been filed, registered or recorded or shall have been
delivered to the Administrative Agent in proper form for filing, registration
or
recordation.
4.15 Insurance.
The
Administrative Agent shall have received insurance certificates satisfying
the
requirements of Section 5.5 of this Agreement.
4.16 PATRIOT
Act.
The
Lenders shall have received, sufficiently in advance of the Initial Closing
Date
or the Increased Facility Closing Date, as applicable, all documentation and
other information required by bank regulatory authorities under applicable
“know
your customer” and anti-money laundering rules and regulations, including
without limitation the United States PATRIOT Act.
38
4.17 Representations
and Warranties.
Each of
the representations and warranties made by any Loan Party in or pursuant to
the
Loan Documents shall be true and correct in all material respects on and as
of
the Initial Closing Date or the Increased Facility Closing Date, as
applicable.
4.18 No
Default.
No
Default or Event of Default shall have occurred and be continuing on the Initial
Closing Date or after giving effect to the Loans requested to be made on the
Initial Closing Date.
No
Default or Event of Default shall have occurred and be continuing on the
Increased Facility Closing Date or after giving effect to the Loans requested
to
be made on the Increased Facility Closing Date.
The
borrowing by the Borrower of the Term Loan on the Initial Closing Date
constituted a representation and warranty by the Borrower as of the Initial
Closing Date that the conditions contained in this Section 4
were
satisfied, and each borrowing by the Borrower hereunder of an incremental Term
Loan or Incremental Loan, as applicable, shall constitute a representation
and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in Sections 4.1(iii), 4.5, 4.9, 4.11, 4.12(i)-(ii), 4.16,
4.17 and 4.18 have been satisfied.
SECTION 5. AFFIRMATIVE
COVENANTS
The
Borrower hereby agrees that, so long as the Commitments remain in effect or
any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and shall cause each of its Subsidiaries
to:
5.1 Financial
Statements.
Furnish
to the Administrative Agent (who will furnish to each Lender):
(a) as
soon
as available, but in any event within 90 days after the end of each fiscal
year of the Borrower, a copy of the audited consolidated balance sheet of the
Borrower as at the end of such fiscal year and the related audited consolidated
statements of income and of cash flows for such fiscal year, setting forth
in
each case in comparative form the figures as of the end of and for the previous
fiscal year, reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit, by BDO
Xxxxxxx, LLP or other independent certified public accountants of nationally
recognized standing;
and
(b) as
soon
as available, but in any event not later than 50 days after the end of each
of the first three quarterly periods of each fiscal year of the Borrower, the
unaudited consolidated balance sheet of the Borrower as at the end of such
quarter and the related unaudited consolidated statements of income and of
cash
flows for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures as
of
the end of and for the corresponding period in the previous year, certified
by a
Responsible Officer as being fairly stated in all material respects (subject
to
normal year-end audit adjustments);
all
such
financial statements to be complete and correct in all material respects and
to
be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
39
5.2 Certificates;
Other Information.
Furnish
to the Administrative Agent (who will furnish to each Lender), or, in the case
of clause (e), to the relevant Lender:
(a) concurrently
with the delivery of any financial statements pursuant to
Section 5.1,
(i) a
Compliance Certificate of a Responsible Officer (x) stating that, to the best
of
such Responsible Officer’s knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that
such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, (y) containing all information and
calculations necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein as of
the
last day of the fiscal quarter or fiscal year of the Borrower, as the case
may
be and (z) to the extent not previously disclosed to the Administrative
Agent, containing a listing of any Intellectual Property acquired by the
Borrower or any Subsidiary Guarantor since the date of the most recent list
delivered pursuant to this clause (ii) (or, in the case of the first such
list so delivered, since the Initial Closing Date); and (ii) a schedule
certified by a Responsible Officer setting forth the aggregate amount of (x)
all
cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries and
its Unrestricted Subsidiaries on a consolidated basis, (y) all Restricted Cash
and (z) all Unrestricted Cash, in each case showing in reasonable detail how
such amounts are calculated;
(b) as
soon
as available, and in any event no later than 75 days after the end of each
fiscal year of the Borrower, a reasonably detailed consolidated budget for
the
following fiscal year (including a projected consolidated balance sheet of
the
Borrower as of the end of the following fiscal year, and projected consolidated
income and a description of the underlying assumptions applicable thereto),
and,
as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year, and the Subsidiaries’ Financial
Information (collectively, the “Projections”),
which
Projections shall in each case be accompanied by a certificate of a Responsible
Officer stating that such Projections are based on reasonable estimates,
information and assumptions and that such Responsible Officer has no reason
to
believe that such Projections are incorrect or misleading in any material
respect;
(c) no
later
than three Business Days after the effectiveness thereof, copies of any
amendment, supplement, waiver or other modification with respect to any
Acquisition Agreement or any Specified License Agreement;
(d) within
five days after the same are sent, copies of all reports filed on Form 8-K
that
the Borrower may make to, or file with, the SEC; and
(e) promptly,
such additional financial and other information as any Lender may from time
to
time reasonably request.
5.3 Payment
of Obligations.
Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever nature,
except where the amount or validity thereof is currently being contested in
good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
5.4 Conduct
of Business and Maintenance of Existence; Compliance.
(a)(i) Preserve, renew and keep in full force and effect its organizational
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 6.4
and
except, the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and
(b) comply with all Contractual Obligations and Requirements of Law, except
to the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
40
5.5 Maintenance
of Property; Insurance.
(a) Keep all Property and systems useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted and
(b) maintain with financially sound and reputable insurance companies
insurance on all its Property in at least such amounts and against at least
such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business.
5.6 Inspection
of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) permit representatives of the Administrative Agent and any Lender
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time upon reasonable prior
written notice, and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
of the Borrower and its Subsidiaries;
provided,
that
all such visits and inspections by all such representatives, shall not occur
more than once in any twelve-month period.
5.7 Notices.
Promptly after receipt of actual knowledge thereof give notice to the
Administrative Agent (who will furnish to each Lender) of:
(a) the
occurrence of any Default or Event of Default;
(b) any
(i) event of default under any Contractual Obligation of the Borrower or
any of its Subsidiaries or (ii) litigation, investigation or proceeding
which may exist at any time between the Borrower or any of its Subsidiaries
and
any Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;
(c) any
litigation or proceeding (other than the BAI Litigation and the Unzipped
Litigation) affecting the Borrower or any of its Subsidiaries (i) in which
the
amount involved is $2,500,000 or more and not covered by insurance, (ii) in
which injunctive or similar relief is sought or (iii) which relates to any
Loan
Document;
(d) the
following events, as soon as possible and in any event within 30 days after
the
Borrower knows or has reason to know thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a
Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of,
any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled Entity
or any Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) any
amendment or modification, or any waiver of any provision, of any Specified
License Agreement; and
(f) any
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
41
Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to
take
with respect thereto.
5.8 Environmental
Laws.
(a)
Comply
in all material respects with, and endeavor to ensure compliance in all material
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all material respects with and
maintain, and endeavor to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.
(b) Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.
5.9 Interest
Rate Protection.
In the
case of the Borrower, within 120 days after the Initial Closing Date, enter
into, and thereafter maintain for a period of not less than three years, Hedge
Agreements to the extent necessary to provide that at least 30% of the aggregate
principal amount of the Loans is subject to either a fixed interest rate or
interest rate protection for a period of not less than three years, which such
Hedge Agreements shall have terms and conditions reasonably satisfactory to
the
Administrative Agent; provided
that
Xxxxxx Brothers Special Financing shall have been afforded an opportunity to
provide such Hedge Agreements on terms satisfactory to the Borrower in its
reasonable discretion.
5.10 Additional
Collateral, etc. (a)
With
respect to any Property acquired after the Initial Closing Date by any
Subsidiary (other than (x) any real property or any Property described in
paragraph (c)
of this
Section, (y) any Property subject to a Lien expressly permitted by Section
6.3(g)
and
(z) Property acquired by an Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have
a
perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary to grant to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property and (ii) take all actions necessary to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in such Property, including without limitation,
the filing of UCC financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law.
(b) With
respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $1,000,000 acquired after the Initial Closing
Date by any Subsidiary (other than any such real property owned by an Excluded
Foreign Subsidiary or subject to a Lien expressly permitted by
Section 6.3(g)),
promptly (i) execute and deliver a first priority Mortgage in favor of the
Administrative Agent, for the benefit of the Secured Parties, covering such
real
property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent) as well as a current ALTA survey thereof, together with a surveyor’s
certificate and (y) any consents or estoppels reasonably deemed necessary
by the Administrative Agent in connection with such Mortgage, each of the
foregoing in form and substance reasonably satisfactory to the Administrative
Agent and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
42
(c) With
respect to any new Subsidiary (other than an Excluded Foreign Subsidiary)
created or acquired after the Initial Closing Date (which, for the purposes
of
this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary), by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest
in
the Capital Stock of such new Subsidiary that is owned by the Borrower or any
of
its Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement and (B) to take
such actions necessary or advisable to grant to the Administrative Agent for
the
benefit of the Secured Parties a perfected first priority security interest
in
the Collateral described in the Guarantee and Collateral Agreement with respect
to such new Subsidiary, including, without limitation, the filing of UCC
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With
respect to any new Excluded Foreign Subsidiary created or acquired after the
Initial Closing Date by the Borrower or any of its Subsidiaries (other than
any
Excluded Foreign Subsidiaries), promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent deems necessary or advisable
in order to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in the Capital Stock
of
such new Subsidiary that is owned by the Borrower or any of its Subsidiaries
(other than any Excluded Foreign Subsidiaries), (provided
that in
no event shall more than 65% of the total outstanding Capital Stock of any
such
new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be,
and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
5.11 Further
Assurances.
From
time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take such actions, as
the
Administrative Agent may reasonably request for the purposes of implementing
or
effectuating the provisions of this Agreement and the other Loan Documents,
or
of more fully perfecting or renewing the rights of the Administrative Agent
and
the Lenders with respect to the Collateral (or with respect to any additions
thereto or replacements or proceeds thereof or with respect to any other
property or assets hereafter acquired by the Borrower or any Subsidiary which
may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon
the
exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to this Agreement or the other Loan Documents
which
requires any consent, approval, recording, qualification or authorization of
any
Governmental Authority, the Borrower will execute and deliver, or will cause
the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent or such Lender may
be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or
authorization.
43
SECTION 6. NEGATIVE
COVENANTS
The
Borrower hereby agrees that, so long as any Loan or other amount is owing to
any
Lender or the Administrative Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
6.1 Total
Leverage Ratio.
Permit
the Total Leverage Ratio as at the last day of any period of four consecutive
fiscal quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Initial Closing Date) ending with any fiscal quarter during
the period set forth below to exceed the ratio set forth below opposite such
fiscal quarter:
Fiscal
Period
|
Total
Leverage Ratio
|
June
30, 2007 - December 31, 2007
|
5.00:1.00
|
March
31, 2008 -December 31, 2008
|
4.75:1.00
|
March
31, 2009 -December 31, 2009
|
4.50:1.00
|
March
31, 2010 -December 31, 2010
|
4.25:1.00
|
March
31, 2011 and thereafter
|
4.00:1.00
|
;
provided,
that
for the purposes of determining the ratio described above for the fiscal
quarters of the Borrower ending June 30, 2007, September 30. 2007 and December
31, 2007, Consolidated EBITDA for the relevant period shall be deemed to equal
Consolidated EBITDA for such fiscal quarter multiplied
by
4, 2 and
4/3, respectively.
6.2 Limitation
on Indebtedness.
Create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness
of any Loan Party pursuant to any Loan Document;
(b) Indebtedness
of any Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness
(including, without limitation, Capital Lease Obligations) secured by Liens
permitted by Section 6.3(g) in an aggregate principal amount not to exceed
$10,000,000 at any one time outstanding;
(d) Indebtedness
outstanding on the Initial Closing Date and listed on Schedule 6.2(d) and
any refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof or any shortening of the maturity
of
any principal amount thereof);
(e) Guarantee
Obligations made in the ordinary course of business by the Borrower or any
of
its Subsidiaries of obligations of any Subsidiary Guarantor;
(f) Guarantee
Obligations made in the ordinary course of business by the Borrower of
obligations of any Unrestricted Subsidiary in an aggregate amount, together
with
any Investment made pursuant to Section 6.8(k) and any Restricted Cash used
to
fund a Permitted Unrestricted Subsidiary Acquisition, not to exceed $30,000,000
plus the Retained Excess Cash Flow Amount during the term of this
Agreement;
44
(g) unsecured,
senior subordinated or subordinated Indebtedness of the Borrower (including
(x)
any unsecured, senior subordinated or subordinated guarantee by the Borrower
of
a Permitted Convertible Notes Offering of an Unrestricted Subsidiary and (y)
unsecured, senior subordinated or subordinated guarantees by any Subsidiary
Guarantor of Indebtedness of the Borrower) (such Indebtedness and/or guarantees
incurred under this clause (g) or refinancings thereof being collectively
referred to as the “Permitted
Subordinated Indebtedness”);
provided
that (i)
no scheduled principal payments, prepayments, redemptions or sinking fund or
like payments of any Permitted Subordinated Indebtedness shall be required
prior
to the date at least 180 days after the Loan Maturity Date (or, if any
Incremental Loans are outstanding at the time of such incurrence, the
Incremental Loan Maturity Date, if later) (unless such Indebtedness constitutes
a Permitted Convertible Notes Offering, in which case the maturity can be five
years, provided that the Loans shall become due and payable six months prior
to
the maturity date of such Permitted Convertible Notes Offering), (ii) the terms
of subordination applicable to any Permitted Subordinated Indebtedness shall
be
reasonably satisfactory to the Administrative Agent and shall, in any event,
define “senior indebtedness” or a similar phrase for purposes thereof to include
all of the Obligations of the Loan Parties, (iii) no Default or Event of Default
shall have occurred and be continuing at the time of incurrence of such
Indebtedness or would result therefrom and (iv) after giving effect to the
incurrence of such Permitted Subordinated Indebtedness, the Borrower shall
be in
pro forma
compliance with Section 6.1;
and
provided,
further,
that
notwithstanding anything to the contrary contained in this Agreement, the
Borrower shall not permit an Unrestricted Subsidiary to use the Net Cash
Proceeds of any Permitted Convertible Notes Offering unless the Borrower would
have been able to use such Net Cash Proceeds in accordance with this Agreement
had such Net Cash Proceeds been received by the Borrower;
(h) (i)
obligations of the Borrower for any Earn-Out Consideration under the Acquisition
Documentation and (ii) obligations of the Borrower or any of its Subsidiaries
for any other Earn-Out Consideration payable in cash in an aggregate amount
(for
this clause (ii)) not to exceed the greater of $10,000,000 or 50% of the initial
purchase price of the relevant Permitted Acquisition Transaction; and
(i) additional
Indebtedness of the Borrower or any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed
$5,000,000 at any one time outstanding.
6.3 Limitation
on Liens.
Create,
incur, assume or suffer to exist any Lien upon any of its Property, whether
now
owned or hereafter acquired, except for:
(a) Liens
for
taxes not yet due or that are being contested in good faith by appropriate
proceedings, provided
that
adequate reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business;
(c) pledges
or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;
(d) deposits
to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, including the
Replevin Bond, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
45
(e) easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that do not materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(f) Liens
in
existence on the Initial Closing Date listed on Schedule 6.3(f), securing
Indebtedness permitted by Section 6.2(d),
provided
that no
such Lien is spread to cover any additional Property after the Initial Closing
Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens
securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant
to Section 6.2(c)
to
finance the acquisition of fixed or capital assets, provided
that
(i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any Property other than the Property financed by such Indebtedness
and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens
created pursuant to the Security Documents;
(i) any
interest or title of a lessor under any lease entered into by the Borrower
or
any other Subsidiary in the ordinary course of its business and covering only
the assets so leased;
(j) Liens
on
the Capital Stock of any Unrestricted Subsidiary to secure the Guarantee
Obligations of the Borrower with respect to such Unrestricted Subsidiary
permitted by Section 6.2(f);
(k) Liens
not
otherwise permitted by this Section so long as neither (i) the
aggregate outstanding principal amount of the obligations secured thereby nor
(ii) the aggregate fair market value (determined, in the case of each such
Lien, as of the date such Lien is incurred) of the assets subject thereto
exceeds (as to the Borrower and all Subsidiaries) $5,000,000 at any one
time;
(l) any
Lien
with respect to the Xxx River Agreement;
(m) Liens
on
Unrestricted Cash;
(n) the
interests of licensees under license agreements entered into in the ordinary
course of business; and
(o) (i)
Liens
granted by the Borrower in favor of Unrestricted Subsidiaries in connection
with
Permitted Securitization Transactions and Permitted Unrestricted Subsidiary
Acquisitions and (ii) Liens granted by the Borrower in favor of Restricted
Subsidiaries in connection with Permitted Acquisitions and Permitted Foreign
Subsidiary Acquisitions.
6.4 Limitation
on Fundamental Changes.
Enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
or
substantially all of its Property or business, except that:
(a) any
Subsidiary of the Borrower may be merged or consolidated with or into any Wholly
Owned Subsidiary Guarantor (provided
that
(i) the Wholly Owned Subsidiary Guarantor shall be the continuing or
surviving entity or (ii) simultaneously with such transaction, the
continuing or surviving entity shall become a Wholly Owned Subsidiary Guarantor
and the Borrower shall comply with Section 5.10
in
connection therewith); and
46
(b) any
Subsidiary of the Borrower may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to any Wholly Owned Subsidiary
Guarantor.
6.5 Limitation
on Disposition of Property.
Dispose
of any of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any
Person, except:
(a) the
Disposition of obsolete or worn out Property in the ordinary course of
business;
(b) the
sale
of inventory in the ordinary course of business;
(c) the
Disposition of cash for payment of any Earn-Out Consideration obligations
permitted by Section 6.2(h) to the extent related to Permitted Acquisitions
and
Permitted Foreign Subsidiary Acquisitions;
(d) Dispositions
permitted by Section 6.4(b);
(e) the
Disposition of any or all of the assets of the Borrower to any Wholly Owned
Subsidiary Guarantor;
(f) the
sale
or issuance of any Subsidiary’s Capital Stock to the Borrower or any Subsidiary
Guarantor;
(g) the
Disposition of the Capital Stock of any Unrestricted Subsidiary or its
assets;
(h) Permitted
Securitization Transactions;
(i) Permitted
Unrestricted Subsidiary Acquisitions;
(j) the
Disposition of other assets having a fair market value not to exceed $10,000,000
in the aggregate for any of the Borrower’s fiscal years;
(k) any
Recovery Event, provided,
that
the requirements of Section 2.7(b)
are
complied with in connection therewith;
(l) Dispositions
of Unrestricted Cash;
(m) licenses
of Intellectual Property in the ordinary course of business; and
(n) Permitted
Foreign Subsidiary Acquisitions.
6.6 Limitation
on Restricted Payments.
Declare
or pay any dividend on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities
or
stock exchange or clearinghouse (a “Derivatives
Counterparty”)
obligating the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital
Stock
(collectively, “Restricted
Payments”),
except that:
47
(a) any
Subsidiary may make Restricted Payments to any Wholly Owned Subsidiary Guarantor
or the Borrower;
(b) the
Borrower may make Restricted Payments with Unrestricted Cash;
(c) the
Borrower may make Restricted Payments in an aggregate amount not to exceed
$5,000,000 plus, if the Total Leverage Ratio as of the last day of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 5.1 (after giving pro forma effect to the making of
such Restricted Payment) is less than 2.50:1.00, the Retained Excess Cash Flow
Amount;
(d) the
Borrower may purchase the Borrower’s common stock or common stock options from
present or former officers or employees of the Borrower or any Subsidiary upon
the death, disability or termination of employment of such officer or employee,
provided,
that
the aggregate amount of payments under this paragraph subsequent to the Initial
Closing Date (net of any proceeds received by the Borrower subsequent to the
Initial Closing Date in connection with resales of any common stock or common
stock options so purchased) shall not exceed $5,000,000; and
(e) the
Borrower may enter into hedge and warrant option transactions in connection
with
a Permitted Convertible Notes Offering.
6.7 Limitation
on Capital Expenditures.
Make or
commit to make any Capital Expenditure, except (i) Capital Expenditures of
the Borrower and its Subsidiaries in the ordinary course of business not
exceeding $5,000,000 per fiscal year; provided, that (x) up to $2,500,000
of any such amount referred to above, if not so expended in the fiscal year
for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (y) Capital Expenditures made pursuant to this
Section during any fiscal year shall be deemed made, first, in respect of
amounts permitted for such fiscal year as provided above and second, in respect
of amounts carried over from the prior fiscal year pursuant to clause (x)
above; and (ii) Capital Expenditures made with Unrestricted Cash.
6.8 Limitation
on Investments.
Make
any advance, loan, extension of credit (by way of guaranty or otherwise) or
capital contribution to, or purchase any Capital Stock, bonds, notes, debentures
or other debt securities of, or any assets constituting an ongoing business
from, or make any other investment in, any other Person (all of the foregoing,
“Investments”),
except:
(a) extensions
of trade credit in the ordinary course of business;
(b) Investments
in Cash Equivalents;
(c) Investments
arising in connection with the incurrence of Indebtedness permitted by
Section 6.2(b),
(e) and
(f);
(d) loans
and
advances to employees of the Borrower or any Subsidiaries of the Borrower in
the
ordinary course of business (including, without limitation, for travel,
entertainment and relocation expenses) in an aggregate amount for the Borrower
and Subsidiaries of the Borrower not to exceed $1,000,000 at any one time
outstanding;
48
(e) the
Acquisitions;
(f) Investments
in assets useful in the Borrower’s business made by any Wholly Owned Subsidiary
Guarantor with the proceeds of any Reinvestment Deferred Amount;
(g) Investments
(other than those relating to the incurrence of Indebtedness permitted by
Section 6.8(c))
by the
Borrower or any of its Subsidiaries in any Person that, prior to such
Investment, is a Wholly Owned Subsidiary Guarantor;
(h) Permitted
Acquisitions;
(i) Permitted
Securitization Transactions;
(j) Permitted
Unrestricted Subsidiary Acquisitions;
(k) in
addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries in an aggregate amount
(valued at cost),
together with any Guarantee Obligations of the Borrower incurred pursuant to
Section 6.2(f) and any Restricted Cash used to fund a Permitted Unrestricted
Subsidiary Acquisition, not
to
exceed $30,000,000 plus the Retained Excess Cash Flow Amount during the term
of
this Agreement; provided
that (i)
no Default or Event of Default shall have occurred and be continuing at the
time
of such Investment or shall result therefrom and (ii) the Borrower is in
pro forma
compliance with Section 6.1
before
and after giving effect to such Investment;
(l) Investments
(other than an acquisition of all or a majority controlling interest in the
Capital Stock, or all or substantially all of the assets, of any Person, or
of
all or substantially all of the assets constituting a division, product line
or
business line of any Person) made with Unrestricted Cash;
(m) Permitted
Foreign Subsidiary Acquisitions;
(n) Investments
pursuant to the Rocawear Joint Venture Agreement made on the Initial Closing
Date and any future Investments made pursuant to the Rocawear Joint Venture
Agreement, which future Investments shall not exceed $5,000,000 in the
aggregate; and
(o) hedge
and
warrant option transactions entered into by the Borrower in connection with
a
Permitted Convertible Notes Offering.
6.9 Limitation
on Optional Payments and Modifications of Debt Instruments, etc. (a)
Make or offer to make any optional or voluntary payment, prepayment, repurchase
or redemption of, or otherwise voluntarily or optionally defease, any Permitted
Subordinated Indebtedness, or segregate funds for any such payment, prepayment,
repurchase, redemption or defeasance, or enter into any derivative or other
transaction with any Derivatives Counterparty obligating the Borrower or any
Subsidiary to make payments to such Derivatives Counterparty as a result of
any
change in market value of any Permitted Subordinated Indebtedness (other than
any hedge and warrant option transactions entered into by the Borrower in
connection with a Permitted Convertible Notes Offering), (b) amend, modify
or
otherwise change, or consent or agree to any amendment, modification, waiver
or
other change to, any of the terms of any Permitted Subordinated Indebtedness
(other than any such amendment, modification, waiver or other change which
(i)
would extend the maturity or reduce the amount of any payment of principal
thereof, reduce the rate or extend the date for payment of interest thereon
or
relax any covenant or other restriction applicable to the Borrower or any of
its
Subsidiaries and (ii) does not involve the payment of a consent fee), (c)
designate any Indebtedness of the Borrower or any of its Subsidiaries (other
than the Obligations) as “Designated Senior Indebtedness” for the purposes of
any Permitted Subordinated Indebtedness or (d) amend its certificate of
incorporation in any manner reasonably determined by the Administrative Agent
to
be materially adverse to the Lenders.
49
6.10 Limitation
on Transactions with Affiliates.
Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than any Wholly
Owned Subsidiary Guarantor) unless such transaction is (a) otherwise permitted
under this Agreement, (b) in the ordinary course of business of the Borrower
or
such Subsidiary, as the case may be, and (c) upon fair and reasonable terms
no
less favorable to the Borrower or such Subsidiary, as the case may be, than
it
would obtain in a comparable arm’s length transaction with a Person that is not
an Affiliate.
6.11 Limitation
on Sales and Leasebacks.
Enter
into any arrangement with any Person providing for the leasing by the Borrower
or any Subsidiary of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary to such Person or to any
other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary.
6.12 Limitation
on Changes in Fiscal Periods.
Permit
the fiscal year of the Borrower to end on a day other than December 31 or
change the Borrower’s method of determining fiscal quarters, provided that the
Borrower may make one election after the Initial Closing Date to change its
fiscal year end, if the Borrower enters into such amendments to this Agreement
as the Administrative Agent shall request to reflect such change, including
modifications to this Section, such that the covenants affected by such change
shall have the same effect (or, in any case, be substantively no less favorable
to the Lenders, in the reasonable determination of the Administrative Agent)
after giving effect thereto as if such change were not made. The Lenders hereby
authorize the Administrative Agent to enter into such amendments to effect
such
modifications, if any, in accordance with the provisions of this Section.
6.13 Limitation
on Negative Pledge Clauses.
Enter
into or suffer to exist or become effective any agreement that prohibits or
limits the ability of the Borrower or any of the Subsidiary Guarantors to
create, incur, assume or suffer to exist any Lien upon the Collateral, whether
now owned or hereafter acquired, to secure the Obligations or, in the case
of
any Subsidiary Guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents and
(b) any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed
thereby).
6.14 Limitation
on Restrictions on Subsidiary Distributions.
Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay
any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of
its assets to the Borrower or any other Subsidiary, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock
or assets of such Subsidiary and (iii) restrictions with respect to
distributions by any Foreign Subsidiary.
50
6.15 Limitation
on Lines of Business.
Enter
into any business, either directly or through any Subsidiary, except for (i)
those businesses in which the Borrower and its Subsidiaries are engaged on
the
date of this Agreement (after giving effect to the Acquisitions) or that are
reasonably related thereto and (ii) those businesses in which the Borrower
and
its Subsidiaries are not engaged on the date of this Agreement if (x) such
businesses are acquired in connection with a Permitted Acquisition Transaction
and (y) the Borrower intends to Dispose of such businesses or otherwise
transition such businesses into the licensing business or businesses reasonably
related thereto.
6.16 Limitation
on Amendments to Acquisition Documentation.
(a) Amend, supplement or otherwise modify (pursuant to a waiver or
otherwise) the terms and conditions of the indemnities and licenses (other
than
the Wal-Mart License Agreement) furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Documentation such that after giving
effect thereto such indemnities or licenses shall be materially less favorable
to the interests of the Loan Parties or the Lenders with respect thereto or
(b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Documentation except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have
a
Material Adverse Effect or amend or otherwise modify the terms and conditions
of
any Specified License Agreement (other than the Wal-Mart License Agreement)
such
that after giving effect thereto such Specified License Agreement shall be
materially less favorable to the interests of the Loan Parties or the Lenders
with respect thereto.
6.17 Limitation
on Hedge Agreements.
Enter
into any Hedge Agreement other than Hedge Agreements entered into in the
ordinary course of business, and not for speculative purposes, to protect
against changes in interest rates or foreign exchange rates.
SECTION 7. EVENTS
OF
DEFAULT
If
any of
the following events shall occur and be continuing:
(a) the
Borrower shall fail to pay any principal of any Loan when due in accordance
with
the terms hereof; or the Borrower shall fail to pay any interest on any Loan,
or
any other amount payable hereunder or under any other Loan Document, within
five
days after any such interest or other amount becomes due in accordance with
the
terms hereof or thereof; or
(b) any
representation or warranty made or deemed made by any Loan Party herein or
in
any other Loan Document or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made
or
furnished; or
(c) any
Loan
Party shall default in the observance or performance of any agreement contained
in clause (i) of Section 5.4(a)
(with
respect to the Borrower only), Section 5.7(a)
or
Section 6
of this
Agreement; or
(d) any
Loan
Party shall default in the observance or performance of any other agreement
contained in this Agreement or any other Loan Document (other than as provided
in paragraphs (a)
through
(c)
of this
Section), and such default shall continue unremedied for a period of
30 days; or
(e) the
Borrower or any of its Subsidiaries shall (i) default in making any payment
of any principal of any Indebtedness (including, without limitation, any
Guarantee Obligation, but excluding the Loans) on the scheduled or original
due
date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary)
to
cause (other than any unexercised right of conversion provided for in a
Permitted Convertible Notes Offering), with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or to become
subject to a mandatory offer to purchase by the obligor thereunder or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided,
that
(x) a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e)
shall
not at any time constitute an Event of Default unless, at such time, one or
more
defaults, events or conditions of the type described in clauses (i), (ii)
and (iii) of this paragraph (e)
shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $25,000,000 and (y) a
default, event or condition described in clause (iii) of this paragraph (e)
with
respect to a Permitted Convertible Notes Offering shall not at any time
constitute an Event of Default if the holders of such Permitted Convertible
Notes Offering holding $25,000,000 or less thereof elect to cause the purchase
thereof by the obligor thereunder or if the holders of such Permitted
Convertible Notes Offering that elect to cause the purchase thereof by the
obligor thereunder are paid with Unrestricted Cash; or
51
(f) (i) the
Borrower or any of its Subsidiaries shall commence any case, proceeding or
other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or
other relief with respect to it or its debts, or (B) seeking appointment of
a receiver, trustee, custodian, conservator or other similar official for it
or
for all or any substantial part of its assets, or , the Borrower or any of
its
Subsidiaries shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against, the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against, the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within
60 days from the entry thereof; or (iv), the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v), the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any
Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any “accumulated funding deficiency” (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan, or
any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower
or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment
of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA,
(iv) any Single Employer Plan shall terminate for purposes of Title IV
of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in
the reasonable opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse Effect;
or
52
(h) one
or
more judgments or decrees shall be entered against the Borrower or any of its
Subsidiaries involving for the Borrower and its Subsidiaries taken as a whole
a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $25,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof;
or
(i) any
of
the Security Documents shall cease, for any reason (other than by reason of
the
express release thereof pursuant to Section 9.15),
to be
in full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) the
guarantee contained in Section 2 of the Guarantee and Collateral Agreement
shall cease, for any reason (other than by reason of the express release thereof
pursuant to Section 9.15),
to be
in full force and effect or any Loan Party or any Affiliate of any Loan Party
shall so assert; or
(k) any
Change of Control shall occur; or
(l) (i)
any
Specified License Agreement shall terminate or otherwise cease, for any reason,
to be in full force and effect or cease to be the legally valid, binding and
enforceable obligation of any Person party thereto; (ii) any Person party
thereto shall, directly or indirectly, contest such effectiveness, validity,
binding nature or enforceability by the filing of a claim, complaint or notice
with an arbitrator or any court or other Governmental Authority; (iii) any
party
to a Specified License Agreement shall fail to perform or observe the material
terms or conditions thereof (including, without limitation, the payment terms
and conditions) or shall breach or otherwise be in default thereunder, in any
case, beyond any applicable grace period expressly provided for in such
Specified License Agreement, and any such party pursues a right of termination
that could reasonably be expected to be successful in a court of law; or (iv)
any party to a Specified License Agreement shall assign (or permit any
counterparty to assign) any of its rights or obligations under any Specified
License Agreement other than an assignment to an Affiliate of such party so
long
as such assignment is permitted by the applicable Specified License Agreement
and is not and could not reasonably be expected to be materially adverse to
the
Lenders; provided that it shall not be an Event of Default under this paragraph
if (x) the Borrower shall be in pro forma
compliance with Section 6.1 (calculated without giving effect to such Specified
License Agreement) or (y) such Specified License Agreement is replaced (whether
or not with the same or different parties or the same or different trademarks)
on or prior to the date that occurs 90 days after any event specified in this
paragraph and such replacement contract is for a period of at least two years
and provides revenue to the applicable Subsidiary in an amount equal to at
least
the amount that would cause the Borrower to be in pro forma
compliance
with Section 6.1 (calculated after giving effect to such replacement); then,
and
in any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f)
above
with respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents shall
immediately become due and payable, and (B) if such event is any other
Event of Default, with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative
Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the
other
Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
53
SECTION 8. THE
ADMINISTRATIVE AGENT
8.1 Appointment.
Each
Lender hereby irrevocably designates and appoints the Administrative Agent
as
the agent of such Lender under this Agreement and the other Loan Documents,
and
each Lender irrevocably authorizes the Administrative Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and
the
other Loan Documents and to exercise such powers and perform such duties as
are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere
in
this Agreement, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
8.2 Delegation
of Duties.
The
Administrative Agent may execute any of its duties under this Agreement and
the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
8.3 Exculpatory
Provisions.
Neither
the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except to the extent that any of
the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made
by any Loan Party or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to
the
observance or 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 Loan Party.
54
8.4 Reliance
by Administrative Agent.
The
Administrative Agent shall be entitled to rely, and shall be fully protected
in
relying, upon any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and
to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to
the
Loan Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of
any Note as the owner thereof for all purposes unless such Note shall have
been
transferred in accordance with Section 9.6
and all
actions required by such Section in connection with such transfer shall have
been taken. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders or any other instructing
group of Lenders specified by this Agreement) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement), and such request
and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
8.5 Notice
of Default.
The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent shall have received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent shall receive such a notice, the Administrative Agent
shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders or any other instructing group of Lenders specified by this Agreement);
provided that unless and until the Administrative Agent shall have received
such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
8.6 Non-Reliance
on Administrative Agent and Other Lenders.
Each
Lender expressly acknowledges that neither the Administrative Agent nor any
of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
have
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of
a
Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any
representation or warranty by any Agent to any Lender. Each Lender represents
to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and
made
its own decision to make its Loans hereunder and enter into this Agreement.
Each
Lender also represents that it will, independently and without reliance upon
the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation
as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness
of
any Loan Party or any affiliate of a Loan Party that may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
55
8.7 Indemnification.
The
Lenders agree to indemnify the Administrative Agent in its capacity as such
(to
the extent not reimbursed by the Borrower and without limiting the obligation
of
the Borrower to do so), ratably according to their respective Aggregate Exposure
Percentages in effect on the date on which indemnification is sought under
this
Section (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such Aggregate Exposure Percentages immediately
prior
to such date), for, and to save the Administrative Agent harmless from and
against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of,
the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent’s gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
8.8 Agent
in Its Individual Capacity.
The
Administrative Agent and its affiliates may make loans to, accept deposits
from
and generally engage in any kind of business with any Loan Party as though
the
Administrative Agent were not the Administrative Agent. With respect to its
Loans made or renewed by it, the Administrative Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender
and
may exercise the same as though it were not the Administrative Agent, and the
terms “Lender” and “Lenders” shall include the Administrative Agent in its
individual capacity.
8.9 Successor
Administrative Agent.
The
Administrative Agent may resign as Administrative Agent upon 30 days’
notice to the Lenders and the Borrower. If the Administrative Agent shall resign
as Administrative Agent under this Agreement and the other Loan Documents,
then
the Required Lenders shall appoint from among the Lenders a successor agent
for
the Lenders, which successor agent shall (unless an Event of Default under
Section 7(a)
or
Section 7(f)
with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld
or
delayed), whereupon such successor agent shall succeed to the rights, powers
and
duties of the Administrative Agent, and the term “Administrative Agent” shall
mean such successor agent effective upon such appointment and approval, and
the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or
any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 8
shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan
Documents.
8.10 Authorization
to Release Liens and Guarantees.
The
Administrative Agent is hereby irrevocably authorized by each of the Lenders
to
effect any release of Liens or guarantee obligations contemplated by Section
9.15.
56
8.11 The
Arranger.
Neither
the Arranger nor the Syndication Agent, in their respective capacity as such,
shall have any duties or responsibilities, nor shall it incur any liability,
under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments
and Waivers.
Neither
this Agreement or any other Loan Document, nor any terms hereof or thereof
may
be amended, supplemented or modified except in accordance with the provisions
of
this Section 9.1.
The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or
(with the written consent of the Required Lenders) the Administrative Agent
and
each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and
to the other Loan Documents (including amendments and restatements hereof or
thereof) for the purpose of adding any provisions to this Agreement or the
other
Loan Documents or changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive
the principal amount or extend the final scheduled date of maturity of any
Loan,
reduce the stated rate of any interest or fee payable under this Agreement
(except in connection with the waiver of applicability of any post-default
increase in interest rates (which waiver shall be effective with the consent
of
the Required Lenders)) or extend the scheduled date of any payment thereof,
or
increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender directly affected
thereby;
(ii) amend,
modify or waive any provision of this Section or reduce any percentage specified
in the definition of Required Lenders, consent to the assignment or transfer
by
the Borrower of any of its rights and obligations under this Agreement and
the
other Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors from their
guarantee obligations under the Guarantee and Collateral Agreement, in each
case
without the consent of all the Lenders;
(iii) amend,
modify or waive any provision of Section 8,
or any
other provision affecting the rights, duties or obligations of the
Administrative Agent, without the consent of the Administrative
Agent;
(iv) amend,
modify or waive any provision of Section 2.13
without
the consent of each Lender directly affected thereby; or
(v) impose
restrictions on assignments and participations that are more restrictive than,
or additional to, those set forth in Section 9.6.
Any
such
waiver and any such amendment, supplement or modification shall apply equally
to
each of the Lenders and shall be binding upon the Loan Parties, the Lenders,
the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, any Default or Event of Default waived shall be deemed to be cured
and
not continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon. Any such
waiver, amendment, supplement or modification shall be effected by a written
instrument signed by the parties required to sign pursuant to the foregoing
provisions of this Section; provided,
that
delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
57
For
the
avoidance of doubt, this Agreement and any other Loan Document may be amended
(or amended and restated) with the written consent of the Required Lenders,
the
Administrative Agent and each Loan Party to each relevant Loan Document
(x) to add one or more additional credit facilities to this Agreement and
to permit the extensions of credit from time to time outstanding thereunder
and
the accrued interest and fees in respect thereof (collectively, the
“Additional
Extensions of Credit”)
to
share ratably in the benefits of this Agreement and the other Loan Documents
with the Loans and the accrued interest and fees in respect thereof and
(y) to include appropriately the Lenders holding such credit facilities in
any determination of the Required Lenders.
It
is
understood that any amendments,
supplements or modifications to
this
Agreement (including any amendment and restatement thereof), for
the
purpose of modifying any provisions to this Agreement,
shall
be considered the same credit facility, as amended, and not a new
loan.
In
addition, notwithstanding the foregoing, this Agreement may be amended with
the
written consent of the Administrative Agent, the Borrower and the Lenders
providing the relevant Replacement Loans (as defined below) to permit the
refinancing or modification of all outstanding Loans (“Refinanced
Loans”)
with a
replacement term loan tranche hereunder (“Replacement
Loans”),
provided
that (a)
the aggregate principal amount of such Replacement Loans shall not exceed the
aggregate principal amount of such Refinanced Loans, (b) the Applicable Margin
for such Replacement Loans shall not be higher than the Applicable Margin for
such Refinanced Loans, (c) the weighted average life to maturity of such
Replacement Loans shall not be shorter than the weighted average life to
maturity of such Refinanced Loans at the time of such refinancing and (d) all
other terms applicable to such Replacement Loans shall be substantially
identical to, or less favorable to the Lenders providing such Replacement Loans
than, those applicable to such Refinanced Loans, except to the extent necessary
to provide for covenants and other terms applicable to any period after the
latest final maturity of the Loans in effect immediately prior to such
refinancing.
9.2 Notices.
All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made
when
delivered, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed
(a) in the case of the Borrower and the Administrative Agent, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Assumption, in such Assignment and Assumption or (c) in the case of any
party, to such other address as such party may hereafter notify to the other
parties hereto:
The
Borrower:
|
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxx Xxxx, CEO
Telecopy:
(000) 000-0000
Telephone:
(000) 000-0000
|
|
The
Administrative Agent:
|
Xxxxxx
Commercial Paper Inc. Loan Portfolio Group, 5th
Floor
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxx
Telecopy:
(000) 000-0000
Telephone:
(000) 000-0000
|
58
Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided
that the
foregoing shall not apply to notices pursuant to Section 2 unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided
that
approval of such procedures may be limited to particular notices or
communications.
9.3 No
Waiver; Cumulative Remedies.
No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents 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. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
9.4 Survival
of Representations and Warranties.
All
representations and warranties made herein, in the other Loan Documents and
in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit
hereunder.
9.5 Payment
of Expenses.
The
Borrower agrees (a) to pay or reimburse the Administrative Agent for all
its reasonable out-of-pocket costs and expenses incurred in connection with
the
syndication of the Facility (other than fees payable to syndicate members)
and
the development, preparation and execution of, and any amendment, supplement
or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges
of
one counsel to the Administrative Agent and, if reasonably necessary, one local
counsel in any relevant jurisdiction and the charges of Intralinks, (b) to
pay or reimburse each Lender and the Administrative Agent for all their costs
and expenses incurred in connection with the enforcement or preservation of
any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation,
the
reasonable fees and disbursements and other charges of one counsel to the
Administrative Agent and the other Lenders and, if reasonably necessary, one
local counsel in any relevant jurisdiction, (c) to pay, indemnify, or
reimburse each Lender and the Administrative Agent for, and hold each Lender
and
the Administrative Agent harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of,
or
consummation or administration of any of the transactions contemplated by,
or
any amendment, supplement or modification of, or any waiver or consent under
or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify or reimburse each Lender, the
Administrative Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an “Indemnitee”)
for,
and hold each Indemnitee harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever incurred
by an
Indemnitee or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of
the
proceeds thereof, (iii) any actual or alleged presence or release of Materials
of Environmental Concern on or from any property owned, occupied or operated
by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries or any or their respective
properties, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract,
tort
or any other theory, and regardless of whether any Indemnitee is a party thereto
(all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”),
provided, that the Borrower shall have no obligation hereunder to any Indemnitee
with respect to Indemnified Liabilities to the extent such Indemnified
Liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by unauthorized persons of information or other materials
sent through electronic, telecommunications or other information transmission
systems that are intercepted by such persons or for any special, indirect,
consequential or punitive damages in connection with the Facility. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and
hereby waives and agrees to cause its Subsidiaries so to waive, all rights
for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any
of
them might have by statute or otherwise against any Indemnitee. All amounts
due
under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall
be
submitted at the address of the Borrower set forth in Section 9.2,
or to
such other Person or address as may be hereafter designated by the Borrower
in a
notice to the Administrative Agent. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
59
9.6 Successors
and Assigns; Participations and Assignments.
(a)
This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign
or
transfer any of its rights or obligations under this Agreement without the
prior
written consent of the Administrative Agent and each Lender.
(b) Any
Lender may, without the consent of the Borrower, in accordance with applicable
law, at any time sell to one or more banks, financial institutions or other
entities (each, a “Participant”)
participating interests in any Loan owing to such Lender, any Commitment of
such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender’s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan
Documents, and the Borrower and the Administrative Agent shall continue to
deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents. In no event
shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to
any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to
Section 9.1.
The
Borrower agrees that if amounts outstanding under this Agreement and the Loans
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall,
to
the maximum extent permitted by applicable law, be deemed to have the right
of
setoff 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 Lender under this Agreement, provided
that, in
purchasing such participating interest, such Participant shall be deemed to
have
agreed to share with the Lenders the proceeds thereof as provided in
Section 9.7
as fully
as if such Participant were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of Sections 2.14,
2.15
and
2.16
with
respect to its participation in the Commitments and the Loans outstanding from
time to time as if such Participant were a Lender; provided
that, in
the case of Section 2.15,
such
Participant shall have complied with the requirements of said Section, and
provided,
further,
that no
Participant shall be entitled to receive any greater amount pursuant to any
such
Sections 2.14,
2.15
or
2.16
than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
60
(c) Any
Lender (an “Assignor”)
may,
in accordance with applicable law and upon written notice to the Administrative
Agent, at any time and from time to time assign to any Lender or any affiliate,
Related Fund or Control Investment Affiliate thereof or, with the consent of
the
Administrative Agent (which, in each case, shall not be unreasonably withheld
or
delayed); provided
that no
such consent need be obtained by any Xxxxxx Entity, to an additional bank,
financial institution or other entity (an “Assignee”)
all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Assumption, substantially in the form of Exhibit D, executed
by such Assignee and such Assignor (and, where the consent of the Administrative
Agent is required pursuant to the foregoing provisions, by the Administrative
Agent) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided
that no
such assignment to an Assignee (other than any Lender or any affiliate thereof)
shall be in an aggregate principal amount of less than $1,000,000 (other than
in
the case of an assignment of all of a Lender’s interests under this Agreement),
unless otherwise agreed by the Borrower and the Administrative Agent. Upon
such
execution, delivery, acceptance and recording, from and after the effective
date
determined pursuant to such Assignment and Assumption, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Assumption, have the rights and obligations of a Lender hereunder
with Commitments and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Assumption,
be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of an Assignor’s rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, except
as
to Section 2.14,
2.15
and
9.5
in
respect of the period prior to such effective date). For purposes of the minimum
assignment amounts set forth in this paragraph, multiple assignments by two
or
more Related Funds shall be aggregated.
(d) The
Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 9.2
a copy
of each Assignment and Assumption delivered to it and a register (the
“Register”)
for
the recordation of the names and addresses of the Lenders and the Commitment
of,
and principal amount of the Loans owing to, each Lender from time to time.
The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and
any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in
the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Assumption;
thereupon one or more new Notes in the same aggregate principal amount shall
be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked “canceled”. The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender’s Loans) at any reasonable time and from time to
time upon reasonable prior notice.
61
(e) Upon
its
receipt of an Assignment and Assumption executed by an Assignor and an Assignee
(and, in any case where the consent of any other Person is required by
Section 9.6(c),
by each
such other Person) together with payment to the Administrative Agent of a
registration and processing fee of $3,500 (treating multiple, simultaneous
assignments by or to two or more Related Funds as a single assignment) (except
that no such registration and processing fee shall be payable (y) in
connection with an assignment by or to a Xxxxxx Entity or (z) in the case
of an Assignee which is an affiliate or Related Fund of a Lender or a Person
under common management with a Lender), the Administrative Agent shall
(i) promptly accept such Assignment and Assumption and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation
to
the Borrower. On or prior to such effective date, the Borrower, at its own
expense, upon request, shall execute and deliver to the Administrative Agent
(in
exchange for the Notes of the assigning Lender) a new Note to the order of
such
Assignee in an amount equal to the Loans assumed or acquired by it pursuant
to
such Assignment and Assumption and, if the Assignor has retained Loans, upon
request, a new Note to the order of the Assignor in an amount equal to the
Loans
retained by it hereunder. Such new Note or Notes shall be dated the Initial
Closing Date and shall otherwise be in the form of the Note or Notes replaced
thereby.
(f) For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section concerning assignments of Loans and Notes relate
only
to absolute assignments and that such provisions do not prohibit assignments
creating security interests in Loans and Notes, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
(g) Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting
Lender”)
may
grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower
all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided
that
(i) nothing herein shall constitute a commitment by any SPC to make any
Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such
SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof. In
addition, notwithstanding anything to the contrary in this
Section 9.6(g),
any SPC
may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account
of
such SPC to support the funding or maintenance of Loans, and (B) disclose
on a confidential basis any non-public information relating to its Loans to
any
rating agency, commercial paper dealer or provider of any surety, guarantee
or
credit or liquidity enhancement to such SPC; provided
that
non-public information with respect to the Borrower may be disclosed only with
the Borrower’s consent which will not be unreasonably withheld. This
paragraph (g)
may not
be amended without the written consent of any SPC with Loans outstanding at
the
time of such proposed amendment.
62
9.7 Adjustments;
Set-off.
(a)
Except
to the extent that this Agreement provides for payments to be allocated to
a
particular Lender, if any Lender (a “Benefited
Lender”)
shall
at any time receive any payment of all or part of the Obligations owing to
it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f),
or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s
Obligations, such Benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender’s
Obligations, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower hereunder (whether
at the stated maturity, by acceleration or otherwise), to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the
account of the Borrower. Each Lender agrees promptly to notify the Borrower
and
the Administrative Agent after any such setoff and application made by such
Lender, provided
that the
failure to give such notice shall not affect the validity of such setoff and
application.
9.8 Counterparts.
This
Agreement may be executed by one or more of the parties to this Agreement on
any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an
executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
9.9 Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
9.10 Integration.
This
Agreement and the other Loan Documents represent the entire agreement of the
Borrower, the Administrative Agent, the Arranger and the Lenders with respect
to
the subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Arranger, the Administrative Agent or
any
Lender relative to subject matter hereof not expressly set forth or referred
to
herein or in the other Loan Documents.
9.11 GOVERNING
LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
63
9.12 Submission
To Jurisdiction; Waivers.
Each of
the parties hereto hereby irrevocably and unconditionally:
(a) submits
for itself and its Property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;
(b) consents
that any such action or proceeding may be brought in such courts and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address set forth
in Section 9.2
or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to xxx in any other
jurisdiction; and
(e) waives,
to the maximum extent not prohibited by law, any right it may have to claim
or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
9.13 Acknowledgments.
The
Borrower hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;
(b) neither
the Arranger, the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Arranger, the Administrative Agent and the Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that
of debtor and creditor; and
(c) no
joint
venture is created hereby or by the other Loan Documents or otherwise exists
by
virtue of the transactions contemplated hereby among the Arranger, the
Administrative Agent and the Lenders or among the Borrower and the
Lenders.
9.14 Confidentiality.
The
Administrative Agent and each of the Lenders agrees to keep confidential all
non-public information provided to it by any Loan Party pursuant to this
Agreement that is designated by such Loan Party as confidential; provided that
nothing herein shall prevent the Administrative Agent or any Lender from
disclosing any such information (a) to the Arranger, the Administrative
Agent, any other Lender or any Affiliate of any thereof, on a need-to-know
basis, (b) to any Participant or Assignee (each, a “Transferee”)
or
prospective Transferee that agrees to comply with the provisions of this Section
or substantially equivalent provisions, (c) to any of its employees,
directors, agents, attorneys, accountants and other professional advisors,
on a
need-to-know basis, (d) to any financial institution that is a direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty’s professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by
the
provisions of this Section), (e) upon the request or demand of any
Governmental Authority having jurisdiction over it; provided
that
notice of such disclosure shall be provided to the Loan Parties upon such
request or demand, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law; provided
that
notice of such disclosure shall be provided to the Loan Parties upon such order,
or prior to such disclosure if such disclosure is required pursuant to any
Requirement of Law, (g) in connection with any litigation or similar
proceeding, provided
that
notice of such disclosure shall be provided to the Loan Parties prior to such
disclosure, (h) that has been publicly disclosed other than in breach of
this Section, or, to the Administrative Agent’s or such Lender’s knowledge,
other than in breach of any other confidentiality agreement, (i) to the
National Association of Insurance Commissioners or any similar organization
or
any nationally recognized rating agency that requires access to information
about a Lender’s investment portfolio in connection with ratings issued with
respect to such Lender or (j) in connection with the exercise of any remedy
hereunder or under any other Loan Document, to the extent necessary to enable
the Administrative Agent or such Lender to exercise any such
remedy.
64
9.15 Release
of Collateral and Guarantee Obligations.
(a)
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, upon request of the Borrower in connection with any Disposition of
Property permitted by the Loan Documents, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate of
any
Lender that is a party to any Specified Hedge Agreement) take such actions
as
shall be required to release its security interest in any Collateral being
Disposed of in such Disposition, and to release any guarantee obligations under
any Loan Document of any Person being Disposed of in such Disposition, to the
extent necessary to permit consummation of such Disposition in accordance with
the Loan Documents.
(b) Notwithstanding
anything to the contrary contained herein or any other Loan Document, when
all
Obligations (other than obligations in respect of any Specified Hedge Agreement)
have been paid in full and all Commitments have terminated or expired, upon
request of the Borrower, the Administrative Agent shall (without notice to,
or
vote or consent of, any Lender, or any affiliate of any Lender that is a party
to any Specified Hedge Agreement) take such actions as shall be required to
release its security interest in all Collateral, and to release all guarantee
obligations under any Loan Document, whether or not on the date of such release
there may be outstanding Obligations in respect of Specified Hedge Agreements.
Any such release of guarantee obligations shall be deemed subject to the
provision that such guarantee obligations shall be reinstated if after such
release any portion of any payment in respect of the Obligations guaranteed
thereby shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payment had not been made.
9.16 Accounting
Changes.
In the
event that any “Accounting Change” (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of
this
Agreement so as to equitably reflect such Accounting Change with the desired
result that the criteria for evaluating the Borrower’s financial condition shall
be the same after such Accounting Change as if such Accounting Change had not
been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue
to
be calculated or construed as if such Accounting Change had not occurred.
“Accounting Change” refers to any change in accounting principles required by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.
65
9.17 [RESERVED].
9.18 WAIVERS
OF JURY TRIAL.
THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
66
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
ICONIX BRAND GROUP, INC. | ||
|
|
|
By: | /s/ Xxxxxx Xxxxxx | |
Name:
Xxxxxx Xxxxxx
Title:
CFO
|
||
XXXXXX
BROTHERS INC.,
as
Arranger
|
||
|
|
|
By: | /s/ Xxxxx X. Xxxxxx | |
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
|
||
XXXXXX
COMMERCIAL PAPER INC.,
as
Syndication Agent
|
||
|
|
|
By: | /s/ Xxxxx X. Xxxxxx | |
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
|
||
XXXXXX
COMMERCIAL PAPER INC.,
as
Administrative Agent and as a Lender
|
||
|
|
|
By: | /s/ Xxxxx X. Xxxxxx | |
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
|
||
[Signature
Page to the Credit Agreement]
EXHIBIT A
[See Exhibit 10.2 to this Form 8-K]