EXHIBIT 99.2
EXECUTION COPY
LEVI XXXXXXX & CO.
FIRST AMENDMENT TO SUBSIDIARY GUARANTY
This FIRST AMENDMENT TO SUBSIDIARY GUARANTY (this "Amendment")
is dated as of January 28, 2002 and entered into by and among the undersigned
(each a "Guarantor" and collectively the "Guarantors"), and BANK OF AMERICA,
N.A., as Administrative Agent for and representative of (in such capacity herein
called "Guarantied Party") the several financial institutions (the "Lenders")
from time to time party to the Credit Agreement referred to below and any Hedge
Bank (as defined in the Credit Agreement referred to below), and for the benefit
of the other Beneficiaries (as defined in the Subsidiary Guaranty referred to
below) and is made with reference to that certain Subsidiary Guaranty dated as
of February 1, 2001 (the "Subsidiary Guaranty"), by the Guarantors. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Subsidiary Guaranty.
R E C I T A L S
- - - - - - - -
WHEREAS, the Borrower and the Lenders have agreed to enter
into that certain Second Amendment to Credit Agreement dated as of January 28,
2002 (the "Second Amendment"), to amend that certain Credit Agreement dated as
of February 1, 2001, as amended by First Amendment to Credit Agreement dated as
of July 11, 2001 (the "Credit Agreement"), by and among the Borrower, the
Lenders, the financial institutions party thereto as Co-Lead Arrangers and Joint
Book Managers, the financial institution party thereto as Syndication Agent, the
financial institution party thereto as Documentation Agent, and Bank of America,
as Administrative Agent;
WHEREAS, pursuant to the Second Amendment all of the Guarantors
may enter into Ordinary Course Hedge Agreements;
WHEREAS, in order to induce the Lenders to enter into the Second
Amendment, the Guarantors have agreed that all Obligations arising from any
Hedge Bank Hedge Agreements shall be guarantied by the Guarantors;
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Lenders and Guarantied Party to enter
into the Second Amendment, each Guarantor hereby agrees with Guarantied Party as
follows:
Section 1. AMENDMENT TO THE SUBSIDIARY GUARANTY
1.1 Amendment to Section 1: Guaranty
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Section 1(a) of the Subsidiary Guaranty is hereby amended to read in its
entirety as follows:
"(a) In order to induce the Lenders to extend credit to the
Borrower pursuant to the Credit Agreement and the entry by Hedge Banks
into the Hedge Bank Hedge Agreements, the Guarantors jointly and
severally irrevocably and unconditionally guaranty, as primary obligors
and not merely as sureties, the due and punctual payment in full of all
Guarantied Obligations (as hereinafter defined) when the same shall
become due, whether at stated maturity, by acceleration, demand or
otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. ss. 362(a)). The term "Guarantied Obligations" is used
herein in its most comprehensive sense and includes any and all
Obligations of the Borrower and all obligations of the Borrower,
FinServ, and each Guarantor under the Hedge Bank Hedge Agreements, now
or hereafter made, incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and however arising
under or in connection with the Credit Agreement, the Hedge Bank Hedge
Agreements, this Guaranty and the other Loan Documents, including those
arising under successive borrowing transactions under the Credit
Agreement which shall either continue the Obligations of the Borrower
or from time to time renew them after they have been satisfied;
provided, however, that obligations arising under or in connection with
the Hedge Bank Hedge Agreements shall be Guarantied Obligations only
until the payment in full of all Obligations under the Credit Agreement
and the other Loan Documents (other than the Hedge Bank Hedge
Agreements), the cancellation or expiration of all Letters of Credit
and the termination of the Commitments.
Each Guarantor acknowledges that a portion of the Advances may
be advanced to it, that Letters of Credit may be issued for the benefit
of its business and that the Guarantied Obligations are being incurred
for and will inure to its benefit.
Any interest on any portion of the Guarantied Obligations that
accrues after the commencement of any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of the Borrower, FinServ, or
any Guarantor (or, if interest on any portion of the Guarantied
Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on
such portion of the Guarantied Obligations if said proceeding had not
been commenced) shall be included in the Guarantied Obligations because
it is the intention of each Guarantor and the Guarantied Party that the
Guarantied Obligations should be determined without regard to any rule
of law or order that may relieve the Borrower, FinServ, or any
Guarantor of any portion of such Guarantied Obligations.
In the event that all or any portion of the Guarantied
Obligations is paid, the obligations of each Guarantor hereunder shall
continue and remain in full force and effect
or be reinstated, as the case may be, in the event that all or any part
of such payment(s) is rescinded or recovered directly or indirectly from
the Guarantied Party or any other Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments that are so
rescinded or recovered shall constitute Guarantied Obligations.
Subject to the other provisions of this Section 1, upon the
failure of the Borrower, FinServ, or any Guarantor to pay any of the
Guarantied Obligations when and as the same shall become due, each
Guarantor will upon demand pay, or cause to be paid, in cash, to the
Guarantied Party for the ratable benefit of Beneficiaries, an amount
equal to the aggregate of the unpaid Guarantied Obligations."
1.2 Amendment to Section 2: Guaranty Absolute; Continuing
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Guaranty
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Section 2 of the Subsidiary Guaranty is hereby amended to read in its
entirety as follows:
"The obligations of each Guarantor hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a
guarantor or surety other than payment in full of the Guarantied
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees that: (a) this Guaranty is a
guaranty of payment when due and not of collectibility; (b) the
Guarantied Party may enforce this Guaranty upon the occurrence of an
Event of Default under the Credit Agreement notwithstanding the
existence of any dispute between the Borrower, FinServ, or any
Guarantor and any Beneficiary with respect to the existence of such
event; (c) the obligations of each Guarantor hereunder are independent
of the obligations of the Borrower under the Loan Documents or of the
Borrower and FinServ under the Hedge Bank Hedge Agreements and the
obligations of any other Guarantor hereunder or under the Hedge Bank
Hedge Agreements and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not any action is brought
against the Borrower, FinServ or any of such other Guarantors and
whether or not the Borrower, FinServ or any other Guarantor is joined
in any such action or actions; and (d) a payment of a portion, but not
all, of the Guarantied Obligations by one or more Guarantors shall in
no way limit, affect, modify or abridge the liability of such or any
other Guarantor for any portion of the Guarantied Obligations that has
not been paid. This Guaranty is a continuing guaranty and shall be
binding upon each Guarantor and its successors and assigns, and each
Guarantor irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guarantied Obligations."
1.3 Amendment to Section 4(f): No Discharge
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Section 4(f) of the Subsidiary Guaranty is hereby amended to read in
its entirety as follows:
"(f) any defenses, set-offs or counterclaims which the Borrower,
FinServ, or any other Guarantor may assert against the Guarantied Party
or any Beneficiary in respect of the Guarantied Obligations, including
but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury, and"
1.4 Amendment to Sections 5: Waivers
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A. Sections 5(a)(iii), 5(b) and 5(f) of the Subsidiary Guaranty
are hereby amended to read in their entirety as follows:
"(a)(iii) proceed against or have resort to any balance of any deposit
account or credit on the books of any Beneficiary in favor of the
Borrower, FinServ, any other Guarantor, or any other Person, or
"(b)any defense arising by reason of the incapacity, lack of authority
or any disability or other defense of the Borrower, FinServ, or any
other Guarantor, including any defense based on or arising out of the
lack of validity or the unenforceability of the Guarantied Obligations
or any agreement or instrument relating thereto or by reason of the
cessation of the liability of the Borrower, FinServ, or any other
Guarantor from any cause other than payment in full of the Guarantied
Obligations;
"(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit
Agreement, notices of default, close out or early termination under any
Hedge Bank Hedge Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to the Borrower, FinServ, or any other Guarantor
and notices of any of the matters referred to in Sections 3 and 4
hereof and any right to consent to any thereof; and"
B. The first sentence of the second paragraph of Section 5 of
the Subsidiary Guaranty is hereby amended to read in its entirety as follows:
"As used in this paragraph, any reference to "the principal" includes
the Borrower, FinServ, and any other Guarantor party to any Hedge Bank
Hedge Agreement and any reference to "the creditor" includes the
Guarantied Party and each other Beneficiary."
1.5 Amendment to Section 6: Guarantors' Rights of Subrogation,
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Contribution, Etc.; Subordination of Other Obligations
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Section 6 of the Subsidiary Guaranty is hereby amended to read in its
entirety as follows:
"Until the Guarantied Obligations shall have been paid in full, the
Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, no Guarantor shall exercise any claim, right
or remedy, direct or indirect, that such Guarantor now has or may
hereafter have against the Borrower, FinServ, any other Guarantor or
their respective assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under
contract, by statute (including under California Civil Code Section
2847, 2848 or 2849), under common law or otherwise and including (a)
any right
of subrogation, reimbursement or indemnification that such Guarantor now
has or may hereafter have against the Borrower, FinServ, or any other
Guarantor, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have
against the Borrower, FinServ, or any other Guarantor, and (c) any
benefit of, and any right to participate in, any collateral or security
now or hereafter held by any Beneficiary. Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of
its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have
against the Borrower, FinServ, or any other Guarantor or against any
collateral or security, and any rights of contribution such Guarantor
may have against any such other guarantor, shall be junior and
subordinate to any rights the Guarantied Party or the other
Beneficiaries may have against the Borrower, FinServ, or any other
Guarantor, to all right, title and interest the Guarantied Party or the
other Beneficiaries may have in any such collateral or security, and to
any right the Guarantied Party or the other Beneficiaries may have
against such other guarantor.
Any indebtedness of the Borrower, FinServ, or any other Guarantor now
or hereafter held by any Guarantor is subordinated in right of payment
to the Guarantied Obligations, and any such indebtedness of the
Borrower, FinServ, or any other Guarantor to a Guarantor collected or
received by such Guarantor after an Event of Default has occurred and
is continuing, and any amount paid to a Guarantor on account of any
subrogation, reimbursement, indemnification or contribution rights
referred to in the preceding paragraph when all Guarantied Obligations
have not been paid in full, shall be held in trust for the Guarantied
Party on behalf of Beneficiaries and shall forthwith be paid over to
the Guarantied Party for the benefit of Beneficiaries to be credited
and applied against the Guarantied Obligations."
1.6 Amendment to Section 8: Financial Condition of the Borrower
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or FinServ
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Section 8 of the Subsidiary Guaranty is hereby amended to read in its
entirety as follows:
"Financial Condition of the Borrower, FinServ, or any other Guarantor.
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No Beneficiary shall have any obligation, and each Guarantor waives any
duty on the part of any Beneficiary, to disclose or discuss with such
Guarantor its assessment, or such Guarantor's assessment, of the
financial condition of the Borrower, FinServ, or any other Guarantor or
any matter or fact relating to the business, operations or condition of
the Borrower, FinServ, or any other Guarantor. Each Guarantor has
adequate means to obtain information from the Borrower, FinServ, or any
other Guarantor on a continuing basis concerning the financial
condition of the Borrower, FinServ, or any other Guarantor and its
ability to perform its obligations under the Loan Documents and the
Hedge Bank Hedge Agreements, as the case may be, and each Guarantor
assumes the responsibility for being and keeping informed of the
financial condition of the Borrower, FinServ, or any other Guarantor
and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations."
1.7 Amendment to Section 12: Discharge of Guaranty Upon Sale of
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Guarantor
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Section 12 of the Subsidiary Guaranty is hereby amended to read in its
entirety as follows:
"If all of the stock of a Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of
(including by merger or consolidation) in any sale or other disposition
to a Person other than a Subsidiary or an Affiliate of the Borrower not
prohibited by the Credit Agreement or otherwise consented to by
Required Lenders, the obligations of such Guarantor or such successor
in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary
or any other Person effective as of the time of such sale; provided
that, if the sale of such stock constitutes a disposition of assets as
a condition precedent to such discharge and release, the Guaranteed
Party shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to the Guaranteed Party
of the Net Cash Proceeds (if any) as required by the Credit Agreement."
1.8 Amendment to Section 14: Miscellaneous
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The second paragraph of Section 14 is hereby amended to read in its
entirety as follows:
"The rights, powers and remedies given to Beneficiaries by this
Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given to Beneficiaries by virtue of any
statute or rule of law or in any of the Loan Documents or Hedge Bank
Hedge Agreements or any agreement between one or more Guarantors and
one or more Beneficiaries or between the Borrower, FinServ, or any
Guarantor party to any Hedge Bank Hedge Agreement and one or more
Beneficiaries. Any forbearance or failure to exercise, and any delay by
any Beneficiary in exercising, any right, power or remedy hereunder
shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any
such right, power or remedy."
Section 2. REPRESENTATIONS AND WARRANTIES
Each Guarantor represents and warrants that the following
statements are true, correct and complete:
A. Organization and Powers. Such Guarantor is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite power and
authority (including, without limitation, all Governmental Authorizations) to
enter into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Subsidiary Guaranty as amended by this
Amendment (the "Amended Agreement").
B. No Conflict. The execution and delivery of this Amendment and
performance by such Guarantor of the Amended Agreement is within such
Guarantor's powers, has been duly authorized by all necessary action, and do not
(i) contravene such Guarantor's Constitutive Documents, (ii) violate any
Requirements of Law, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting such Guarantor, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created or permitted under the Loan
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of such Guarantor or any of its
Subsidiaries. Neither such Guarantor nor any of its Subsidiaries is in violation
of any such Requirements of Law or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely to have a Material
Adverse Effect.
C. Governmental Consents. No Governmental Authorization, and no
other authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority or any other third party is required
for the due execution, delivery, recordation or filing of this Amendment or the
performance by such Guarantor of the Amended Agreement.
D. Binding Obligation. This Amendment and the Amended Agreement
have been duly executed and delivered by such Guarantor, and are, the legal,
valid and binding obligation of each Loan Party party thereto, enforceable
against such Loan Party in accordance with its terms.
Section 3. MISCELLANEOUS
A. Reference to and Effect on the Subsidiary Guaranty and the
Other Loan Documents.
(i) On and after the date hereof, each reference in the
Subsidiary Guaranty to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Subsidiary Guaranty, and each reference in
the other Loan Documents to the "Subsidiary Guaranty", "thereunder", "thereof"
or words of like import referring to the Subsidiary Guaranty shall mean and be a
reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Subsidiary Guaranty and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of Guarantied
Party or any Lender under, the Subsidiary Guaranty or any of the other Loan
Documents.
B. Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
C. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.
D. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery by telecopier of an executed counterpart of a signature page to this
Amendment shall be effective as delivery of an original executed counterpart of
this Amendment. This Amendment shall become effective upon the execution of a
counterpart hereof by the Guarantors and Guarantied Party.
IN WITNESS WHEREOF, the Guarantors and Guarantied Party have caused
this Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BATTERY STREET ENTERPRISES, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX FINANCIAL CENTER
CORPORATION
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX FUNDING, LLC
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX GLOBAL FULFILLMENT
SERVICES, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX GLOBAL
OPERATIONS, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX INTERNATIONAL
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI XXXXXXX LATIN AMERICA, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
LEVI'S ONLY STORES, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
NF INDUSTRIES, INC.
By: __________________________________
Name: Xxxxxx X. Xxxxxx
Title: Treasurer
BANK OF AMERICA, N.A.,
As Administrative Agent, as Guarantied Party
By: __________________________________
Name: Xxxxxxxx Carry
Title: Vice President
