Exhibit 10.34
EXECUTION COPY
CREDIT AGREEMENT
dated as of December 15, 2005
among
MOVADO GROUP, INC.,
MOVADO WATCH COMPANY SA and MGI LUXURY GROUP S.A.,
as Borrowers,
the Lenders signatory hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, and as Swingline Bank,
and as Issuing Bank
----------
X.X. XXXXXX SECURITIES, INC.,
as Sole Lead Arranger and Sole Bookrunner,
BANK OF AMERICA, N.A.,
as Syndication Agent
and
THE BANK OF NEW YORK
and
CITIBANK, N.A.,
as Documentation Agents
Table of Contents
Page
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ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS................................. 1
Section 1.1. Definitions............................................ 1
Section 1.2. Accounting Terms....................................... 15
Section 1.3. Terms Generally........................................ 15
Section 1.4. Determination of Exchange Rates........................ 16
ARTICLE 2. THE LOANS..................................................... 16
Section 2.1. Syndicated Loans....................................... 16
Section 2.2. Making of Syndicated Loans............................. 16
Section 2.3. Borrowing Procedure as to Syndicated Loans............. 18
Section 2.4. Swingline Loans........................................ 18
Section 2.5. Participations by All Lenders in Swingline Loans....... 19
Section 2.6. Repayment of Loans..................................... 20
Section 2.7. Certain Fees........................................... 21
Section 2.8. Interest on Loans...................................... 22
Section 2.9. Default Interest....................................... 22
Section 2.10. Termination and Reduction of Commitments............... 22
Section 2.11. Conversion and Continuation of Borrowings.............. 23
Section 2.12. Optional Prepayment.................................... 25
Section 2.13. Mandatory Prepayments.................................. 26
Section 2.14. Payments............................................... 28
Section 2.15. Purpose................................................ 29
Section 2.16. Increase of Total Revolving Credit Commitment.......... 29
ARTICLE 3. LETTERS OF CREDIT............................................. 30
Section 3.1. Letters of Credit...................................... 30
Section 3.2 Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions..................................... 30
Section 3.3. Minimum Amount; Expiration Date........................ 31
Section 3.4. Participations......................................... 31
Section 3.5. Reimbursement.......................................... 31
Section 3.6. Obligations Absolute................................... 32
Section 3.7. Disbursement Procedures................................ 33
Section 3.8. Interim Interest....................................... 34
Section 3.9. Letter of Credit Fees.................................. 34
Section 3.10. Resignation of the Issuing Bank........................ 34
Section 3.11. Not Fiduciary.......................................... 35
Section 3.12. Purpose................................................ 35
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC............................. 35
Section 4.1. Alternate Rate of Interest............................. 35
Section 4.2. Reserve Requirement; Change in Circumstances........... 36
Section 4.3. Change in Legality..................................... 37
Section 4.4. Indemnity.............................................. 38
Section 4.5. Taxes.................................................. 39
Section 4.6. Duty to Mitigate....................................... 40
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Section 4.7. Replacement of Lenders................................. 40
Section 4.8. Certain Additional Costs............................... 41
ARTICLE 5. CONDITIONS PRECEDENT.......................................... 42
Section 5.1. Documentary Conditions Precedent....................... 42
Section 5.2. Additional Conditions Precedent........................ 44
Section 5.3. Deemed Representations................................. 44
ARTICLE 6. REPRESENTATIONS AND WARRANTIES................................ 44
Section 6.1. Incorporation, Good Standing and Due Qualification..... 44
Section 6.2. Corporate Power and Authority; No Conflicts............ 45
Section 6.3. Legally Enforceable Agreements......................... 45
Section 6.4. Litigation............................................. 45
Section 6.5. Financial Statements................................... 45
Section 6.6. Ownership and Liens.................................... 46
Section 6.7. Taxes.................................................. 46
Section 6.8. ERISA.................................................. 46
Section 6.9. Subsidiaries and Ownership of Stock.................... 47
Section 6.10. Credit Arrangements.................................... 47
Section 6.11. Operation of Business.................................. 47
Section 6.12. Hazardous Materials.................................... 48
Section 6.13. No Default on Outstanding Judgments or Orders.......... 49
Section 6.14. No Defaults on Other Agreements........................ 49
Section 6.15. Labor Disputes and Acts of God......................... 50
Section 6.16. Governmental Regulation................................ 50
Section 6.17. Partnerships........................................... 50
Section 6.18. No Forfeiture.......................................... 50
Section 6.19. Solvency............................................... 50
Section 6.20. Certain Particular Assurances as to the Foreign
Subsidiary Borrowers................................... 51
ARTICLE 7. AFFIRMATIVE COVENANTS......................................... 52
Section 7.1. Maintenance of Existence............................... 52
Section 7.2. Conduct of Business.................................... 52
Section 7.3. Maintenance of Properties.............................. 52
Section 7.4. Maintenance of Records................................. 52
Section 7.5. Maintenance of Insurance............................... 52
Section 7.6. Compliance with Laws; Payment of Taxes................. 52
Section 7.7. Right of Inspection.................................... 53
Section 7.8. Reporting Requirements................................. 53
Section 7.9. Subsidiary Guarantee................................... 56
Section 7.10. Equal and Ratable Lien................................. 57
ARTICLE 8. NEGATIVE COVENANTS............................................ 57
Section 8.1. Debt................................................... 57
Section 8.2. Guaranties, Etc........................................ 58
Section 8.3. Liens.................................................. 58
Section 8.4. Leases................................................. 60
Section 8.5. Investments............................................ 60
Section 8.6. Dividends.............................................. 61
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Section 8.7. Sale of Assets......................................... 62
Section 8.8. Stock of Subsidiaries, Etc............................. 63
Section 8.9. Transactions with Affiliates........................... 63
Section 8.10. Mergers, Etc........................................... 64
Section 8.11. Acquisitions........................................... 64
Section 8.12. No Material Change in Business......................... 65
Section 8.13. No Restriction......................................... 65
Section 8.14. Swap and Exchange Agreements........................... 65
ARTICLE 9. FINANCIAL COVENANTS........................................... 65
Section 9.1. Interest Coverage Ratio................................ 65
Section 9.2. Average Debt Coverage Ratio............................ 65
Section 9.3. Capital Expenditures................................... 65
ARTICLE 10. EVENTS OF DEFAULT............................................ 65
Section 10.1. Events of Default...................................... 65
Section 10.2. Remedies............................................... 67
ARTICLE 11. THE ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS AND
PARENT....................................................... 68
Section 11.1. Appointment, Powers and Immunities of Administrative
Agent.................................................. 68
Section 11.2. Reliance by Administrative Agent....................... 69
Section 11.3. Defaults............................................... 69
Section 11.4. Rights of Administrative Agent as a Lender............. 69
Section 11.5. Indemnification of Administrative Agent................ 70
Section 11.6. Documents.............................................. 70
Section 11.7. Non-Reliance on Administrative Agent and Other
Lenders................................................ 70
Section 11.8. Failure of Administrative Agent to Act................. 71
Section 11.9. Resignation of Administrative Agent.................... 71
Section 11.10. Amendments Concerning Agency Function.................. 71
Section 11.11. Liability of Administrative Agent...................... 71
Section 11.12. Delegation of Agency Functions......................... 71
Section 11.13. Non-Receipt of Funds by the Administrative Agent....... 72
Section 11.14. Withholding Taxes...................................... 72
Section 11.15. Several Obligations and Rights of Lenders.............. 73
Section 11.16. Pro Rata Treatment of Syndicated Loans, Etc............ 73
Section 11.17. Sharing of Payments Among Lenders...................... 73
Section 11.18. Other Agents........................................... 74
ARTICLE 12. MISCELLANEOUS................................................ 74
Section 12.1. Amendments and Waivers; Remedies Cumulative............ 74
Section 12.2. Usury.................................................. 75
Section 12.3. Expenses; Indemnity; Damage Waiver..................... 75
Section 12.4. Survival............................................... 76
Section 12.5. Assignment; Participations............................. 77
Section 12.6. Notices................................................ 80
Section 12.7. Setoff................................................. 81
Section 12.8. JURISDICTION; JURY WAIVER; IMMUNITIES.................. 81
Section 12.9. Table of Contents; Headings............................ 82
Section 12.10. Severability........................................... 82
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Section 12.11. Authorization of Parent................................ 82
Section 12.12. Integration............................................ 83
Section 12.13. GOVERNING LAW.......................................... 83
Section 12.14. Confidentiality........................................ 83
Section 12.15. Treatment of Certain Information....................... 84
Section 12.16. Judgment Currency...................................... 84
Section 12.17. Counterparts........................................... 85
Section 12.18. USA PATRIOT Act........................................ 85
Section 12.19. Termination of Existing Credit Agreement............... 85
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EXHIBITS
Exhibit A-1 Form of Syndicated Loan Note
Exhibit A-2 Form of Swingline Loan Note
Exhibit B Form of Authorization Letter
Exhibit C-1 Form of Opinion of Xxxxxxx X. Xxxxxx, Esq.
Exhibit C-2 Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
LLP
Exhibit C-3 Form of Opinion of Swiss Counsel for the Foreign Subsidiary
Borrowers
Exhibit D-1 Form of Subsidiary Guarantee
Exhibit D-2 Form of Parent Guarantee
Exhibit E Form of Assignment and Assumption Agreement
SCHEDULES
Schedule I Lenders and Revolving Credit Commitments
Schedule II Applicable Rates
Schedule III Subsidiaries of Parent
Schedule IV Credit Arrangements
Schedule V Environmental Matters
Schedule VI Affiliate Transactions
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CREDIT AGREEMENT dated as of December 15, 2005 among MOVADO GROUP,
INC., a corporation organized under the laws of New York (the "Parent"); MOVADO
WATCH COMPANY SA, a corporation organized under the laws of Switzerland ("MWC");
MGI LUXURY GROUP S.A., a corporation organized under the laws of Switzerland
("Luxury"); each of the lenders which is a signatory hereto (individually a
"Lender" and collectively the "Lenders"); and JPMORGAN CHASE BANK, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"), and as swingline bank
(in such capacity, together with its successors in such capacity, the "Swingline
Bank"), and as issuing bank (in such capacity, together with its successors in
such capacity, the "Issuing Bank").
The Parent, MWC and Luxury desire that the Lenders, the Swingline Bank
and the Issuing Bank extend credit as provided herein, and the Lenders, the
Swingline Bank and the Issuing Bank are prepared to extend such credit.
Accordingly, the Parent, MWC, Luxury, the Lenders, the Swingline Bank, the
Issuing Bank and the Administrative Agent agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.1. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"ABR Borrowing" means a Borrowing comprised of ABR Loans that are
Syndicated Loans or a Borrowing of an ABR Loan that is a Swingline Loan.
"ABR Loan" means any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article 2.
"Acquisition" is defined in Section 8.11.
"Adjusted LIBO Rate" means, with respect to any LIBOR Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/32nd of 1%) equal to (a) with respect to any LIBOR Borrowing by
the Parent, the product of (i) the LIBO Rate in effect for such Interest Period
and (ii) Statutory Reserves and (b) with respect to any LIBOR Borrowing by any
Foreign Subsidiary Borrower, the LIBO Rate in effect for such Interest Period.
"Administrative Agent" is defined in the initial paragraph of this
Agreement. If the Administrative Agent pursuant to Section 11.12 designates any
of its Affiliates to perform any of its duties or exercise any of its rights or
powers with respect to any Foreign Currency Loans or Foreign Currency
Borrowings, the term "Administrative Agent" shall include, as well, such
Affiliate with respect thereto.
"Administrative Agent Fees" is defined in Section 2.7(c).
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Aggregate Credit Exposure" means, at any time, the sum at such time
of (i) the aggregate of the Lenders' Syndicated Loan Exposures, (ii) the L/C
Exposure and (iii) the outstanding principal balance of all Swingline Loans.
"Agreement" means this Credit Agreement, as amended, restated
supplemented or otherwise modified from time to time.
"Alternate Base Rate" means, for any day, a rate per annum 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 plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Rate" means, for any day, with respect to any LIBOR Loan,
or with respect to the Commitment Fees, as the case may be, the applicable rate
per annum set forth on Schedule II under the caption "LIBOR Loan Spread" or
"Commitment Fee Rate", as the case may be, based upon the Average Debt Coverage
Ratio. Each change in the Applicable Rate resulting from a change in the Average
Debt Coverage Ratio shall be effective with respect to all outstanding LIBOR
Loans and with respect to the Commitment Fees on and after the first day of the
calendar month following the date of delivery to the Administrative Agent of the
financial statements required by paragraph (a) or (b) (as the case may be) of
Section 7.8 indicating that a change in the Average Debt Coverage Ratio has
occurred, through the date immediately preceding the first day of the calendar
month following the next date of delivery of such financial statements
indicating that another change in the Average Debt Coverage Ratio has occurred.
Notwithstanding the foregoing, but subject to the next sentence, during the
period commencing on the Closing Date and ending on the date immediately
preceding the first day of the calendar month following the date of delivery of
the first such financial statements, the Average Debt Coverage Ratio shall be
deemed to be in Category 2 (as set forth on Schedule II) for purposes of
determining the Applicable Rate. Notwithstanding the foregoing, (a) at any time
during which the Parent has failed to deliver the financial statements required
by either such paragraph of Section 7.8, or (b) at any time after the occurrence
and during the continuance of an Event of Default, the Average Debt Coverage
Ratio shall be deemed to be in Category 4 (as set forth on Schedule II) for
purposes of determining the Applicable Rate.
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
"Assignment and Assumption Agreement" means an assignment and
assumption entered into by a Lender and an assignee (with the consent of any
party whose consent is
2
required by Section 12.5), and accepted by the Administrative Agent, in the form
of Exhibit E or any other form approved by the Administrative Agent.
"Augmenting Lender" is defined in Section 2.16.
"Authorization Letter" means the letter agreement executed by the
Borrowers in the form of Exhibit B.
"Availability Period" means the period from and including the Closing
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Revolving Credit Commitments.
"Average Debt Coverage Ratio" means the ratio of (i) the sum of
indebtedness for borrowed money, indebtedness for the deferred purchase price of
property or services (excluding trade payables in the ordinary course of
business; and excluding wages or other compensation payable to employees of the
Parent or any of its Subsidiaries in the ordinary course of business),
obligations arising under acceptance facilities, and obligations as lessee under
Capital Leases (in all cases) of the Parent and its Consolidated Subsidiaries on
a consolidated basis as of the last day of each fiscal quarter for four
consecutive fiscal quarters, divided by four, to (ii) consolidated earnings
before interest expense, taxes, depreciation and amortization of the Parent and
its Consolidated Subsidiaries for such period of four consecutive fiscal
quarters. For purposes of this definition only, if such clause (ii) is less than
one dollar, it shall be deemed to be one dollar.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means the Parent, MWC or Luxury (as applicable).
"Borrowing" means (a) Syndicated Loans made to a single Borrower of a
single Type made, converted or continued on the same date and in the same
currency, and as to which a single Interest Period is in effect or (b) a
Swingline Loan made by the Swingline Bank on a single date.
"Borrowing Request" means a Syndicated Loan Borrowing Request or a
Swingline Loan Borrowing Request.
"Breakage Event" is defined in Section 4.4.
"Business Day" means any 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; provided, however, that: (a) when used in connection with a LIBOR
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market; (b) when
used in connection with any Loan denominated in Euros, the term "Business Day"
shall also exclude any day on which the TARGET payment system is not open for
settlement of payment in Euros; and (c) when used in connection with any Loan
denominated in a Foreign Currency other than Euros, the term "Business Day"
shall also exclude any day on which commercial banks and the London foreign
exchange market do not settle payments in the
3
principal financial center where such Foreign Currency is cleared and settled
as reasonably determined by the Administrative Agent.
"Capital Expenditures" means, for any period, the dollar amount of
gross expenditures (including obligations under Capital Leases) during such
period made for fixed assets, real property, plant and equipment, and all
renewals, improvements and replacements thereto (but not repairs thereof) that
are required to be capitalized under, and determined in accordance with, GAAP.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Cash Collateral Account" is defined in Section 2.13(f).
"Closing Date" means the date on which the conditions specified in
Section 5.1 are satisfied (or waived in accordance with Section 12.1).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment Fees" is defined in Section 2.7(b).
"Consolidated Capital Expenditures" means Capital Expenditures of the
Parent and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Parent in accordance
with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth of the
Parent and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Core Business" means the business of designing, manufacturing and
distributing watches, jewelry and other accessories (including the operation of
retail stores to distribute the same), other businesses related thereto, or
businesses that in the judgment of the board of directors of the Parent are
derived from the exploitation by the Parent of its trademarks, including the
operation of retail stores to distribute products utilizing the same.
"currency" is defined in the definition of the term "Type" in this
Section.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business;
and except wages or other compensation payable to employees of such Person in
the ordinary course of business); (c) the face amount of
4
any outstanding letters of credit issued for the account of such Person; (d)
obligations arising under acceptance facilities; (e) (without duplication of
other Debt) guaranties, endorsements (other than for collection in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss with respect to any Debt of the type referred to
in clauses (a), (b), (c), (d) and (g) of this definition; (f) Debt of others
secured by any Lien on property of such Person; and (g) obligations of such
Person as lessee under Capital Leases.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" is defined in Section 2.9.
"Defaulted Amount" is defined in Section 2.9.
"Designated Sales" means (i) sales of assets of the Parent or any
Subsidiary that are prohibited by Section 8.7 (excluding clause (f) thereof),
and (ii) sales of all the shares of capital stock of any Subsidiary that are
prohibited by Section 8.8 (excluding clause (d) thereof); and (iii) cash mergers
of a Subsidiary into another entity (that is, where the outstanding shares of
such Subsidiary are entirely converted to cash upon such merger) that are
prohibited by Section 8.10 (excluding clause (c) thereof), provided that such
sales and mergers shall be for fair market value and on an arms'-length basis.
"Dollar Equivalent" means, on any date of determination, with respect
to any amount in a particular Foreign Currency, the equivalent in dollars of
such amount, as determined by the Administrative Agent pursuant to Section 1.4
using the Exchange Rate with respect to such Foreign Currency then in effect
under Section 1.4.
"dollars" or "$" means lawful money of the United States of America.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which the Parent is a member, or (ii)
solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the
Code of which the Parent is a member.
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"Euro" means the single currency of the European Union as constituted
by the Treaty on European Union and as referred to in the legislative measures
of the European Union for the introduction of, changeover to or operation of the
Euro in one or more member states.
"Event of Default" is defined in Section 10.1.
"Exchange Rate" means, on any day, with respect to any determination
of the equivalent in dollars of a particular Foreign Currency (or in a
particular Foreign Currency of dollars), the rate at which such Foreign Currency
may be exchanged into dollars (or dollars into such Foreign Currency, as
applicable), as set forth at approximately 11:00 a.m., London time, on such day
on the Reuters World Currency Page for the relevant currency. In the event that
such rate does not appear on any Reuters World Currency Page, the Exchange Rate
shall be such exchange rate from such other source as reasonably selected by the
Administrative Agent as the rate at which such Foreign Currency may be exchanged
into dollars (or dollars into such Foreign Currency, as applicable), or, in the
absence of such other source, such Exchange Rate shall instead be the arithmetic
average of the spot rates of exchange of the Person serving as the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such Foreign Currency are then being conducted, at or
about 10:00 a.m., local time of such market, on such date for the purchase of
dollars (or such Foreign Currency, as applicable) for delivery two Business Days
later; provided that if at the time of any such determination, for any reason,
no such spot rate is being quoted, the Administrative Agent may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Swingline Bank, the Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of any Borrower hereunder,
(a) (i) income or franchise taxes imposed on (or measured by) its net income or
gross or net turnover, and (ii) any branch profits taxes or similar taxes
imposed, and (b) in the case of a Lender organized under the laws of a
jurisdiction other than the United States (a "Non-U.S. Lender"), any withholding
tax that is imposed on amounts payable hereunder to such Non-U.S. Lender to the
extent such tax is in effect and would apply as of the date such foreign Lender
becomes a party to this Agreement or designates a new Lending Office, or that is
attributable to such Non-U.S. Lender's failure to comply with Section 11.14.
"Facility Documents" means this Agreement, the Notes, the
Authorization Letter, the Parent Guarantee and each Subsidiary Guarantee.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the nearest 1/100th of 1%) 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
(rounded upwards, if necessary, to the nearest 1/100th of 1%) of the quotations
for the day for such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
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"Fees" means the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.
"Foreign Currency" means Euros or Swiss francs (as applicable).
"Foreign Currency Borrowing" means a Borrowing comprised of Syndicated
Loans denominated in a particular Foreign Currency.
"Foreign Currency Equivalent" means, on any date of determination,
with respect to an amount in dollars, the amount of the applicable Foreign
Currency that may be purchased with such amount of dollars at the Exchange Rate
with respect to such Foreign Currency on such date, as reasonably determined by
the Administrative Agent.
"Foreign Currency Loan" means a Syndicated Loan denominated in a
particular Foreign Currency.
"Foreign Currency Sublimit Dollar Amount" means $25,000,000, as the
same may be increased from time to time pursuant to Section 2.16.
"Foreign Subsidiary Borrower" means MWC or Luxury (as applicable).
"Forfeiture Proceeding" means any action or proceeding against the
Parent or any of its Subsidiaries before any court, governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
the receipt of notice by any such party that any of them is a suspect in or a
target of any governmental investigation, as to which there is a reasonable
possibility of a determination adverse to the Parent or such Subsidiary and
which (if determined adversely to the Parent or such Subsidiary) would, in any
one case or in the aggregate, materially adversely affect the financial
condition, operations or business of the Parent and its Subsidiaries taken as a
whole or the ability of any Borrower or any Guarantor to perform its obligations
under the Facility Documents to which it is a party.
"Future Permitted Private Placement Debt" means unsecured indebtedness
for money borrowed by the Parent that is privately placed with one or more
institutional investors after the Closing Date (including the indebtedness
evidenced by the Prudential Shelf Notes), provided that (a) not more than 20% of
the original principal amount of any such indebtedness shall be scheduled to
mature or to be repaid in any fiscal year prior to the Maturity Date; and (b)
the terms and conditions associated with such indebtedness (whether in the notes
evidencing such indebtedness, or in the note purchase agreements or similar
agreements pursuant to which such indebtedness is issued, or otherwise) are not
more restrictive of the Parent or any of its Subsidiaries than the corresponding
terms and conditions of this Agreement (which determination as to
restrictiveness may be made by the Administrative Agent in its reasonable
judgment); provided, however, that the foregoing clause (a) shall not apply to
the indebtedness evidenced by the Prudential Shelf Notes; and provided further
that the foregoing clause (b) shall not apply to the indebtedness evidenced by
the Prudential Shelf Notes unless the Note Purchase and Private Shelf Agreement
dated March 21, 2001, as amended prior to the Closing Date, between the Parent
and The Prudential Insurance Company of America is hereafter amended.
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"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the date hereof, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 6.5.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Xxxxxxxx Group" means the group consisting of Gedalio Xxxxxxxx, his
spouse, each of their estates and their issue; and Xxxxxx Xxxxxxxx, his spouse,
each of their estates and their issue; and every Person (other than an
individual) Controlled by any of the foregoing.
"Guarantors" means the Parent as guarantor under the Parent Guarantee
and each Subsidiary Guarantor.
"Hazardous Material" is defined in Section 6.12(a).
"Inactive Subsidiary" means a Subsidiary of the Parent that has (and
only for so long as it has) assets of less than $1,000,000; provided, however,
that (i) there shall not be more than ten Inactive Subsidiaries at any time
during the term of this Agreement and (ii) the assets of all Inactive
Subsidiaries in the aggregate shall not exceed $4,000,000.
"Increasing Lender" is defined in Section 2.16.
"Indemnified Taxes" means Taxes arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement other than Excluded Taxes and Other Taxes.
"Indemnitee" is defined in Section 12.3(b).
"Initial Subsidiary Guarantees" means the Subsidiary Guarantees
executed and delivered by the Initial Subsidiary Guarantors (respectively) on
the Closing Date in favor of the Lenders, the Swingline Bank, the Issuing Bank
and the Administrative Agent, in respect of the obligations of the Parent under
this Agreement and the other Facility Documents.
"Initial Subsidiary Guarantors" means, as of the Closing Date, Movado
Retail Group, Inc., a New Jersey corporation, and Movado LLC, a Delaware limited
liability company.
"Interest Coverage Ratio" for any period means the ratio of (a)
consolidated earnings before interest expense and taxes of the Parent and its
Consolidated Subsidiaries for such period, to (b) cash interest paid during such
period by the Parent and its Consolidated Subsidiaries on a consolidated basis.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, and the Maturity Date; (b) with respect to any LIBOR Loan, the last
day of the Interest Period applicable to the
8
Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing
with an Interest Period of more than three months' duration, each day that would
have been an Interest Payment Date had successive Interest Periods of three
months' duration been applicable to such Borrowing, and in addition, the date of
any prepayment of such Borrowing or the date of any conversion of such Borrowing
to a Borrowing of a different Type; and (c) with respect to a Swingline Loan,
the day that such Loan is required to be repaid.
"Interest Period" means, as to any LIBOR Borrowing, the period
commencing on the date of such Borrowing (or in the case of the conversion of
any ABR Borrowing into a LIBOR Borrowing, the date of such conversion or in the
case of a continuation of any LIBOR Borrowing as a LIBOR Borrowing, the date of
such continuation) and ending on the numerically corresponding day (or, if there
is no numerically corresponding day, on the last day) in the calendar month that
is 1, 2, 3, 6 or (subject to availability for each Lender) 9 or 12 months
thereafter, as the applicable Borrower may elect; provided, however, that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Issuing Bank" means JPMCB. The Issuing Bank may, in its reasonable
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"Issuing Bank Fees" is defined in Section 3.9.
"JPMCB" means JPMorgan Chase Bank, N.A. and its successors.
"Judgment Currency" is defined in Section 12.16(a).
"Judgment Currency Conversion Date" is defined in Section 12.16(a).
"L/C Commitment" means the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Article 3.
"L/C Disbursement" means a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.
"L/C Exposure" means at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Lender at any time means its Pro Rata
Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" is defined in Section 3.9.
"Lenders" means (a) the Persons listed on Schedule I (other than any
such Person that has ceased to be a party hereto pursuant to an Assignment and
Assumption Agreement) and
9
(b) any Person that has become a party hereto pursuant to an Assignment and
Assumption Agreement or pursuant to Section 2.16.
"Lending Office" means, for each Lender and for each Type of Loan to
each Borrower, the lending office of such Lender (or of an Affiliate of such
Lender) specified in writing by such Lender from time to time to the
Administrative Agent and the Parent as the office by which its Loans of such
Type to such Borrower are to be made and maintained.
"Letter of Credit" means any letter of credit issued pursuant to
Article 3.
"LIBO Rate" means (a) with respect to any LIBOR Borrowing denominated
in dollars, for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the
Administrative Agent, in consultation with the Parent, from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period; and (b) with
respect to any LIBOR Borrowing denominated in a Foreign Currency, for any
Interest Period, the rate determined by reference to the British Bankers'
Association Interest Settlement Rates (as reflected on the applicable Telerate
service) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, as the rate for deposits in such
Foreign Currency with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such LIBOR Borrowing for such Interest Period shall
be the rate at which the Person serving as the Administrative Agent is offered
deposits in dollars of, or deposits in the applicable Foreign Currency for the
Foreign Currency Equivalent of, $5,000,000 and for a maturity comparable to such
Interest Period in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIBOR Borrowing" means a Borrowing comprised of LIBOR Loans.
"LIBOR Loan" means any Syndicated Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article 2.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loans" means Syndicated Loans and Swingline Loans.
"Luxury" is defined in the initial paragraph of this Agreement.
"MWC" is defined in the initial paragraph of this Agreement.
"Maturity Date" means December 15, 2010.
10
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Parent or any ERISA Affiliate
and which is covered by Title IV of ERISA.
"Non-U.S. Lender" is defined in the definition of the term "Excluded
Taxes" in this Section.
"Notes" means the Syndicated Loan Notes and the Swingline Loan Note.
"Obligation Currency" is defined in Section 12.16(a).
"Other Credit Agreement" means the 90,000,000 Swiss franc Credit
Agreement dated as of the date hereof between MWC and Luxury, as borrowers, the
Parent, the lenders party thereto and JPMCB, as administrative agent for such
lenders.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies or any
value added or similar tax arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.
"Parent" is defined in the initial paragraph of this Agreement.
"Parent Guarantee" means the guarantee executed and delivered by the
Parent on the Closing Date in favor of the Lenders and the Administrative Agent,
in respect of the obligations of MWC and Luxury under this Agreement and the
other Facility Documents, in substantially the form attached hereto as Exhibit
D-2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United
11
States of America or any State thereof that has a combined capital and
surplus and undivided profits of not less than $500,000,000; and
(d) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined capital
and surplus and undivided profits of not less than $500,000,000.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Parent or any ERISA
Affiliate and which is covered by Title IV of ERISA, other than a Multiemployer
Plan.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by the entity which is the Administrative Agent as its prime
rate in effect at its principal office in New York City; each change in such
prime rate shall be effective from and including the date such change is
publicly announced as being effective.
"Pro Rata Percentage" of any Lender at any time means the percentage
of the Total Revolving Credit Commitment represented by such Lender's Revolving
Credit Commitment (or, if the Lenders' Revolving Credit Commitments shall have
expired or been terminated in accordance with this Agreement and the Aggregate
Credit Exposure is greater than zero, such percentage immediately prior to such
expiration or termination, giving effect to any assignments by or to such Lender
pursuant to Section 12.5).
"Prudential Existing Notes" means (a) the promissory notes of the
Parent in the original aggregate principal amount of $40,000,000 issued pursuant
to the Note Agreement dated as of November 9, 1993, as amended prior to the
Closing Date, between the Parent and The Prudential Insurance Company of
America, and (b) the Series A promissory notes of the Parent in the original
aggregate principal amount of $25,000,000 issued pursuant to the Note Purchase
and Private Shelf Agreement dated as of November 30, 1998, as amended prior to
the Closing Date, between the Parent and The Prudential Insurance Company of
America.
"Prudential Shelf Notes" means, to the extent hereafter actually
issued, the shelf promissory notes of the Parent in the aggregate principal
amount of up to $40,000,000 authorized pursuant to the Note Purchase and Private
Shelf Agreement dated as of March 21, 2001, as amended prior to the Closing
Date, between the Parent and The Prudential Insurance Company of America.
"Qualifying Bank" means any legal entity which is recognized as a bank
by the banking laws in force in its country of incorporation and which exercises
as its main purpose a true banking activity, having bank personnel, premises,
communication devices of its own and the authority of decision-making.
"Rate" is defined in the definition of the term "Type" in this
Section.
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"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees and agents
of such Person and such Person's Affiliates.
"Release" is defined in Section 6.12(a).
"Required Lenders" means, at any time, Lenders having Syndicated Loan
Exposure, L/C Exposure and unused Revolving Credit Commitments representing more
than 50% of the sum of all Syndicated Loan Exposure, L/C Exposure and unused
Revolving Credit Commitments at such time.
"Required Payment" is defined in Section 11.13.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Syndicated Loans, and to acquire
participations in Letters of Credit and Swingline Loans, hereunder as set forth
on Schedule I, or in the Assignment and Assumption Agreement pursuant to which
such Lender assumed its Revolving Credit Commitment, or pursuant to Section
2.16, as applicable, as the same may be (a) reduced from time to time pursuant
to Section 2.10, (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.5 and/or (c) increased
from time to time pursuant to Section 2.16.
"S&P" means Standard & Poor's Ratings Services.
"Statutory Reserves" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve, liquid asset or similar
percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by any Governmental Authority of
the jurisdiction of such currency to which the entity which is the
Administrative Agent in such jurisdiction is subject for any category of
deposits or liabilities customarily used to fund loans in such currency or by
reference to which interest rates applicable to Loans in such currency are
determined. Such reserve, liquid asset or similar percentages shall, in the case
of dollars, include those imposed by the Board with respect to the Adjusted LIBO
Rate for Eurocurrency Liabilities (as defined in Regulation D of the Board).
LIBOR Loans shall be deemed to constitute Eurocurrency Liabilities and to be
subject to such reserve requirements without benefit of or credit from
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any other applicable law, rule or regulation.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting
13
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by such Person. Unless the context otherwise requires, references in
this Agreement to a Subsidiary mean a Subsidiary of the Parent.
"Subsidiary Guarantee" means a guarantee executed and delivered by a
Subsidiary Guarantor in favor of the Lenders, the Swingline Bank, the Issuing
Bank and the Administrative Agent, in respect of the obligations of the Parent
under this Agreement and the other Facility Documents, in substantially the form
attached hereto as Exhibit D-1 (including the Initial Subsidiary Guarantees).
"Subsidiary Guarantors" means the Initial Subsidiary Guarantors and
each other Subsidiary that becomes a Subsidiary Guarantor pursuant to Section
7.9.
"Swingline Bank" means JPMCB.
"Swingline Loan Borrowing Request" means a request by the Parent for a
Swingline Loan in accordance with the terms of Section 2.4 in form satisfactory
to the Administrative Agent.
"Swingline Loan Note" is defined in Section 2.6(b).
"Swingline Loans" means the revolving loans made by the Swingline Bank
to the Parent pursuant to Section 2.4. Each Swingline Loan shall be an ABR Loan.
"Swiss francs" means the lawful money of Switzerland.
"Syndicated Loan Borrowing Request" means a request by the Parent (on
its own behalf or on behalf of the applicable Foreign Subsidiary Borrower) for
Syndicated Loans in accordance with the terms of Section 2.3 in form
satisfactory to the Administrative Agent.
"Syndicated Loan Exposure" means, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Syndicated
Loans of such Lender denominated in dollars plus the Dollar Equivalent at such
time of the aggregate principal amount at such time of all outstanding
Syndicated Loans of such Lender that are Foreign Currency Loans.
"Syndicated Loan Note" is defined in Section 2.6(a).
"Syndicated Loans" means the revolving loans made by the Lenders to
the Parent or a Foreign Subsidiary Borrower (as the case may be) pursuant to
Section 2.1. Each Syndicated Loan to the Parent shall be denominated in dollars
and shall be outstanding as a LIBOR Loan or an ABR Loan, and each Syndicated
Loan to a Foreign Subsidiary Borrower shall be outstanding as a Foreign Currency
Loan.
"Tangible Net Worth" of a Person means, at any date of determination
thereof, the excess of total assets of such Person over total liabilities of
such Person, excluding, however, (A) from the determination of total assets: (i)
all assets which would be classified as intangible assets under GAAP, including,
without limitation, goodwill (whether representing the excess of
14
cost over book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, and deferred charges (including, without
limitation, unamortized debt discount and expense, organization cost, and
research and development costs); and (ii) any write-up in the book value of any
asset since January 31, 2005; and (B) any foreign exchange translation
adjustment in the cumulative amount, and any adjustments to other comprehensive
income for derivative instruments and other hedging activities, that would (in
each case) be properly shown in the shareholders' equity section of such
Person's balance sheet prepared in accordance with GAAP.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Revolving Credit Commitment" means, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Type", when used in respect of any Syndicated Loan or Borrowing of
Syndicated Loans, shall refer to the Rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined and the currency in
which such Loan or the Loans comprising such Borrowing are denominated. For
purposes hereof, the term "Rate" means the Adjusted LIBO Rate or the Alternate
Base Rate, and the term "currency" means dollars, Euros or Swiss francs.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Parent or
any ERISA Affiliate under Title IV of ERISA.
Section 1.2. Accounting Terms. All accounting terms used herein and
not specifically defined herein shall be construed in accordance with GAAP, and
all financial data required to be delivered hereunder shall be prepared in
accordance with GAAP. If any change in GAAP, as in effect on the date hereof,
occurs after the date of this Agreement, compliance with all financial covenants
contained herein shall continue to be determined in accordance with GAAP as in
effect on the date hereof, except to the extent that the Parent and the Required
Lenders otherwise agree in writing.
Section 1.3. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to
15
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.4. Determination of Exchange Rates. Not later than 11:00
a.m., New York City time, on each date on which a calculation of the Exchange
Rate is to be made in connection with a Borrowing or a continuation or a
conversion of a Borrowing, the Administrative Agent shall (i) determine the
Exchange Rate as of such date and (ii) give prompt notice thereof to the Lenders
and the Parent (on behalf of itself and the Foreign Subsidiary Borrowers).
ARTICLE 2. THE LOANS.
Section 2.1. Syndicated Loans. Subject to the terms and conditions
hereof, each Lender agrees, severally and not jointly, to make, from time to
time during the Availability Period, (a) Syndicated Loans to the Parent
denominated in dollars, (b) Syndicated Loans to MWC denominated in a Foreign
Currency and (c) Syndicated Loans to Luxury denominated in a Foreign Currency,
in an aggregate principal amount at any time outstanding that will not result
in:
(i) the sum of (x) such Lender's Syndicated Loan Exposure, plus (y)
such Lender's L/C Exposure, plus (z) such Lender's Pro Rata Percentage of
all outstanding Swingline Loans exceeding such Lender's Revolving Credit
Commitment, or
(ii) the Dollar Equivalent of such Lender's outstanding Foreign
Currency Loans exceeding such Lender's Pro Rata Percentage of the Foreign
Currency Sublimit Dollar Amount; or
(iii) the Aggregate Credit Exposure exceeding the Total Revolving
Credit Commitment.
Within the limits set forth in the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrowers may borrow, pay or
prepay and reborrow Syndicated Loans.
Section 2.2. Making of Syndicated Loans. (a) Each Syndicated Loan
shall be made as part of a Borrowing consisting of Syndicated Loans made by the
Lenders ratably in accordance with their respective Revolving Credit
Commitments; provided, however, that the failure of any Lender to make any
Syndicated Loan shall not in itself relieve any other Lender of its obligation
to lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Syndicated Loan
required to be made by such other Lender). The Syndicated Loans comprising any
Borrowing shall be in an
16
aggregate principal amount that is an integral multiple of $250,000 and that is
not less than $1,000,000 (in the case of each ABR Borrowing) or $2,000,000 (in
the case of a LIBOR Borrowing denominated in dollars) or 3,000,000 units of a
particular Foreign Currency in the case of a LIBOR Borrowing denominated in such
Foreign Currency; provided, however, that an ABR Borrowing may be in an amount
that is equal to the remaining balance of the Total Revolving Credit Commitment.
Syndicated Loans that are made pursuant to any Foreign Currency Borrowing shall
be made in the particular Foreign Currency and in an aggregate principal amount
specified in the applicable Syndicated Loan Borrowing Request (and the dollar
amount thereof shall be determined by the Administrative Agent as of the day
that is three Business Days before the day such Loans are made using the current
Exchange Rate as of the day that is three Business Days before the day such
Loans are made, which determination shall be conclusive absent manifest error).
(b) Subject to Sections 4.1 and 4.3, each Borrowing of Syndicated
Loans denominated in dollars shall be comprised entirely of ABR Loans or LIBOR
Loans as the Parent may request pursuant to Section 2.3; and each Borrowing of
Syndicated Loans in a particular Foreign Currency shall be comprised entirely of
LIBOR Loans. Each Lender may at its option make any LIBOR Loan by causing any
domestic or foreign branch of such Lender or any Affiliate of such Lender which
is a Qualifying Bank to make such Loan; provided that any exercise of such
option shall not affect the obligation of the applicable Borrower to repay such
Loan in accordance with the terms of this Agreement. Borrowings of more than one
Type may be outstanding at the same time; provided, however, that no Borrower
shall be entitled to request any Borrowing that, if made, would result in more
than twelve LIBOR Borrowings outstanding hereunder at any time. Borrowings
having different Interest Periods (regardless of whether they commence on the
same date), or denominated in different currencies, or made by different
Borrowers, shall be considered separate Borrowings.
(c) Each Lender shall make each Syndicated Loan denominated in dollars
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, on such date to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. Each Lender shall make each Syndicated Loan
denominated in a Foreign Currency to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds by 12:00 noon,
London time (or the time of such other city designated by the Administrative
Agent), on such date to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make such Loans available to the applicable Borrower by promptly
crediting the amounts so received, in like funds, to an account of such Borrower
maintained with (i) the Administrative Agent in New York City in the case of
such Loans denominated in dollars or (ii) the Administrative Agent (or its
designee) in London (or such other city as the Administrative Agent may in its
reasonable judgment designate in respect of particular Foreign Currency Loans)
in the case of Foreign Currency Loans, in each case designated by the Parent (on
its own behalf or on behalf of the applicable Foreign Subsidiary Borrower) in
the applicable Syndicated Loan Borrowing Request; or if a Borrowing shall not
occur on such date because any condition precedent herein specified shall not
have been met, the Administrative Agent shall return the amounts so received to
the respective Lenders.
17
(d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request any Borrowing of Syndicated Loans that are LIBOR
Loans if the Interest Period requested with respect thereto would end after the
Maturity Date.
Section 2.3. Borrowing Procedure as to Syndicated Loans. In order to
request a Borrowing of Syndicated Loans, the Parent (on its own behalf or on
behalf of the applicable Foreign Subsidiary Borrower) shall hand deliver or
telecopy to the Administrative Agent a duly completed Syndicated Loan Borrowing
Request (a) in the case of a LIBOR Borrowing, not later than (i) 11:00 a.m., New
York City time (in the case of a Borrowing denominated in dollars) or (ii) 11:00
a.m., London time (in the case of a Borrowing denominated in a Foreign
Currency), three Business Days before a proposed Borrowing, and (b) in the case
of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business
Day before a proposed Borrowing. Notwithstanding the immediately preceding
sentence, the Administrative Agent agrees that it will (subject to the
Authorization Letter) accept from the Parent a Syndicated Loan Borrowing Request
by telephone by the applicable date and time specified in the immediately
preceding sentence, provided that the same is confirmed by the Parent to the
Administrative Agent in writing promptly (and in all events on the same day as
such telephone communication). Each Syndicated Loan Borrowing Request shall be
irrevocable, shall be signed by the Parent (on its own behalf or on behalf of
the applicable Foreign Subsidiary Borrower), shall refer to this Agreement and
shall specify the following information: (a) that such Request relates to
Syndicated Loans and not a Swingline Loan; (b) whether the Borrowing then being
requested is to be a LIBOR Borrowing or an ABR Borrowing; (c) the date of such
Borrowing (which shall be a Business Day); (d) the number and location of the
account to which funds are to be disbursed (which shall be an account that
complies with the requirements of Section 2.2(c)); (e) the amount of such
Borrowing (which shall be expressed in dollars, regardless of whether such
Borrowing is a Foreign Currency Borrowing); (f) whether such Borrowing is to be
a Borrowing denominated in dollars or in a Foreign Currency (and, if a Foreign
Currency, identifying the Foreign Currency); (g) if such Borrowing is to be a
LIBOR Borrowing, the Interest Period or Periods with respect thereto; and (h)
the identity of the applicable Borrower of such Borrowing; provided, however,
that notwithstanding any contrary specification in any Syndicated Loan Borrowing
Request, each requested Borrowing of Syndicated Loans shall comply with the
requirements set forth in Section 2.2. If no election (or an incomplete
election) as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing if such Borrowing is denominated
in dollars. If no Interest Period with respect to any LIBOR Borrowing is
specified in any such notice, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration. The Administrative
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section (and the contents thereof), and of each Lender's portion of the
requested Borrowing, and (in the case of a Foreign Currency Borrowing) of the
particular Foreign Currency in which it is to be denominated and the Foreign
Currency Equivalent of the specified dollar amount of such Borrowing and the
Exchange Rate utilized to determine such Foreign Currency Equivalent.
Section 2.4. Swingline Loans. (a) Subject to the terms and conditions
hereof, the Swingline Bank agrees to make Swingline Loans to the Parent, from
time to time during the Availability Period, in dollars, in an aggregate
principal amount at any time outstanding that will not result in:
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(i) the aggregate principal amount of Swingline Loans being in excess
of $10,000,000, or
(ii) the Aggregate Credit Exposure exceeding the Total Revolving
Credit Commitment;
provided, however, that the Swingline Bank shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within such limits,
and subject to the terms, conditions and limitations set forth herein, the
Parent may borrow, pay or prepay and reborrow Swingline Loans from the Swingline
Bank.
(b) The Swingline Loans shall be made in dollars and maintained as ABR
Loans.
(c) Each Borrowing of a Swingline Loan shall be in an amount not less
than $1,000,000 and shall be in integral multiples of $250,000.
(d) In order to request a Borrowing of a Swingline Loan, the Parent
shall hand deliver or telecopy to the Administrative Agent a duly completed
Swingline Loan Borrowing Request not later than 11:00 a.m., New York City time,
on the Business Day on which the proposed Borrowing is to be made.
Notwithstanding the immediately preceding sentence, the Administrative Agent
agrees that it will (subject to the Authorization Letter) accept from the Parent
a Swingline Loan Borrowing Request by telephone by the applicable date and time
specified in the immediately preceding sentence, provided that the same is
confirmed by the Parent to the Administrative Agent in writing promptly (and in
all events on the same day as such telephone communication). Each Swingline Loan
Borrowing Request shall be irrevocable, shall be signed on behalf of the Parent,
shall refer to this Agreement and shall state (i) that the requested Borrowing
is to be of a Swingline Loan, (ii) the amount of such Borrowing and (iii) the
date of such Borrowing (which is to be a Business Day). The Administrative Agent
shall promptly notify the Swingline Bank of such Swingline Loan Borrowing
Request. On the date so specified, the Swingline Bank shall make available the
amount of the Swingline Loan to be made by it on such date to the Administrative
Agent, in immediately available funds, at an account designated and maintained
by the Administrative Agent. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Parent by depositing the same in an account of the Parent maintained at
the Administrative Agent.
Section 2.5. Participations by All Lenders in Swingline Loans. The
Swingline Bank may by written notice given to the Administrative Agent not later
than 10:00 a.m., New York City time, on any Business Day require the Lenders to
acquire participations on such Business Day in all or a portion of the Swingline
Loans outstanding. Such notice shall specify the aggregate amount of Swingline
Loans in which the Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender's Pro Rata Percentage of such Swingline
Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Bank, such Lender's Pro Rata Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees
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that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default or reduction or termination of the Revolving Credit
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds to the Administrative Agent not later than 2:00 p.m., New York City time,
on the day it receives such notice (or, if such Lender shall have received such
notice later than 10:00 a.m. on any Business Day, then not later than 10:00 a.m.
on the following Business Day). If any Lender does not pay such amount to the
Administrative Agent on the date required by the immediately preceding sentence,
such Lender shall (independently of and in addition to the Parent's obligation
to pay interest on such amount) pay interest on such amount, for each day from
and including the date such amount is so required to be paid by such Lender to
but excluding the date such amount is paid, to the Administrative Agent for the
account of the Swingline Bank at (i) for the first such day, the Federal Funds
Effective Rate, and (ii) for each day thereafter, one percent per annum in
excess of the Federal Funds Effective Rate. The Administrative Agent shall
promptly pay to the Swingline Bank the amounts so received by it from the
Lenders. The Administrative Agent shall notify the Parent of any participations
in any Swingline Loan acquired pursuant to this paragraph. Any amounts received
by the Administrative Agent from the Parent (or other party on behalf of the
Parent) in respect of a Swingline Loan after receipt by the Swingline Bank of
the proceeds of a sale of participations therein shall be promptly remitted by
the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Bank, as their interests may
appear; provided that any such payment so remitted shall be repaid to the
Administrative Agent, if and to the extent such payment is required to be
refunded to the Parent for any reason. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve the Parent of any
default in the payment thereof. Notwithstanding the foregoing, (x) a Lender
shall not have any obligation to purchase a participation in a Swingline Loan
pursuant to this paragraph if an Event of Default shall have occurred and be
continuing at the time such Swingline Loan was made and (aa) such Lender or any
other Lender shall have notified the Swingline Bank in writing, at least one
Business Day prior to the time such Swingline Loan was made, that such Event of
Default has occurred and that such notifying Lender will not acquire
participations in Swingline Loans made while such Event of Default is continuing
(unless the notifying Lender shall have withdrawn such notice), or (bb) the
Parent shall have notified the Swingline Bank in writing, at least one Business
Day prior to the time such Swingline Loan was made, that such Event of Default
has occurred; and (y) a Lender shall not have any obligation to purchase a
participation pursuant to this paragraph to the extent of its Pro Rata
Percentage of the aggregate amount of the excess (if any) of Swingline Loans
outstanding on the day of a Borrowing of any Swingline Loan over the limitation
in clause (i) or (ii) of Section 2.4(a), unless the Parent subsequently
eliminates such excess.
Section 2.6. Repayment of Loans. (a) Each Borrower hereby
unconditionally agrees to pay to the Administrative Agent for the account of
each Lender on the Maturity Date the then unpaid principal amount of each
Syndicated Loan of such Lender to such Borrower in the applicable currency of
such Syndicated Loan. Upon the request of any Lender at any time, such
obligation of each Borrower in favor of such Lender shall be evidenced by a
promissory note of such Borrower in favor of such Lender in substantially the
form of Exhibit A-1 hereto (the "Syndicated Loan Note" of such Lender as to the
applicable Borrower).
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(b) The Parent hereby unconditionally agrees to pay to the
Administrative Agent for the account of the Swingline Bank the unpaid principal
amount of each Swingline Loan on the earlier of the Maturity Date or the first
date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least two Business Days after such Swingline Loan is
made; provided that on each day that a Syndicated Borrowing by the Parent is
made, the Parent shall pay all Swingline Loans then outstanding. Upon the
request of the Swingline Bank at any time, such obligation of the Parent in
favor of the Swingline Bank shall be evidenced by a single promissory note of
the Parent in favor of the Swingline Bank in the amount of $10,000,000 in
substantially the form of Exhibit A-2 hereto (the "Swingline Loan Note").
(c) Each Lender and the Swingline Bank shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
each Borrower to such Lender or the Swingline Bank (as applicable) resulting
from each Loan made by such Lender or the Swingline Bank from time to time,
including the amounts of principal and interest payable and paid to such Lender
or the Swingline Bank from time to time under this Agreement.
(d) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the identity of the
applicable Borrower thereof, the Type thereof, the Interest Period applicable
thereto, the currency in which it is made, and whether such Loan is a Syndicated
Loan or a Swingline Loan, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each Lender or the
Swingline Bank hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from any Borrower or any Guarantor and each
Lender's or the Swingline Bank's share thereof.
(e) The entries made in the accounts maintained pursuant to paragraphs
(c) and (d) above shall be prima facie evidence of the existence and amounts of
the obligations therein recorded; provided, however, that the failure of any
Lender or the Swingline Bank or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
any Borrower to repay its Loans in accordance with their terms.
Section 2.7. Certain Fees. (a) The Parent agrees to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December in each year and on the date on which the Revolving
Credit Commitment of such Lender shall expire or be terminated as provided
herein, a commitment fee equal to the average daily unused amount of the
Revolving Credit Commitment of such Lender during the preceding quarter (or
other period commencing with the Closing Date or ending with the Maturity Date
or the date on which the Revolving Credit Commitment of such Lender shall expire
or be terminated) multiplied by the Applicable Rate for such quarter or other
period (appropriately pro-rated, if the Applicable Rate changes during such
quarter or other period). "Usage" of the Revolving Credit Commitment of a Lender
shall include the Syndicated Loans of such Lender and such Lender's Pro Rata
Percentage of the L/C Exposure, but shall exclude Swingline Loans.
(b) All commitment fees described in paragraph (a) of this Section
(the "Commitment Fees") shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the
21
Closing Date and shall cease to accrue on the date on which the Revolving Credit
Commitment of such Lender shall expire or be terminated as provided herein.
(c) The Parent agrees to pay to the Administrative Agent, for its own
account, the fees with respect to the Administrative Agent's services hereunder
payable at the times and in the amounts separately agreed upon between the
Parent and the Administrative Agent (the "Administrative Agent Fees").
(d) The Commitment Fees and the Administrative Agent Fees shall be
paid on the dates due in dollars and in immediately available funds to the
Administrative Agent, for distribution, if and as appropriate, among the
Lenders. Once paid, none of such Fees shall be refundable under any
circumstances.
Section 2.8. Interest on Loans. (a) Subject to the provisions of
Section 2.9, the Loans comprising each ABR Borrowing (whether of Syndicated
Loans or of a Swingline Loan) shall bear interest at a rate per annum equal to
the Alternate Base Rate. Such interest shall be computed on the basis of the
actual number of days elapsed, over (if such interest is determined on the basis
of the Prime Rate) a year of 365 or 366 days, as the case may be, or (if such
interest is determined on the basis of the Federal Funds Effective Rate) a year
of 360 days.
(b) Subject to the provisions of Section 2.9, the Loans comprising
each LIBOR Borrowing of Syndicated Loans shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate in effect from time to time.
(c) Interest on each Loan shall be payable by the Borrower of such
Loan on the Interest Payment Dates applicable to such Loan except as otherwise
provided in this Agreement. The applicable Alternate Base Rate or applicable
Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as
the case may be, shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
Section 2.9. Default Interest. If any Borrower shall default in the
payment required to be made by it of the principal of or interest on any Loan or
any other amount becoming due under this Agreement (the "Defaulted Amount"), at
stated maturity, by acceleration or otherwise, or under any other Facility
Document, then each Borrower shall on demand from time to time pay interest, to
the extent permitted by law, on its Loans then or thereafter outstanding
(irrespective of whether or not such Loans are due) and on all other amounts
then or thereafter due from it under this Agreement, to but excluding the date
of actual payment (after as well as before judgment) of the Defaulted Amount, at
a rate (the "Default Rate") equal to (a) in the case of overdue principal of
each outstanding Loan, the rate otherwise applicable to such Loan pursuant to
Section 2.8 plus 2.0% per annum and (b) in all other cases, the Alternate Base
Rate plus 2.0% per annum.
Section 2.10. Termination and Reduction of Commitments. (a) The
Revolving Credit Commitments and the L/C Commitment shall automatically expire
and terminate on the Maturity Date.
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(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Parent may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Revolving Credit Commitments; provided, however, that (i) each partial reduction
of the Revolving Credit Commitments shall be an integral multiple of $1,000,000
and in a minimum amount of $5,000,000 and (ii) the Total Revolving Credit
Commitment shall not be reduced to an amount that is less than the Aggregate
Credit Exposure at the time (after giving effect to any concurrent prepayment of
Loans). If the Administrative Agent receives such a notice from the Parent, the
Administrative Agent shall promptly advise the Lenders thereof.
(c) If proceeds of the sale(s) of assets by the Parent or any of its
Subsidiaries are applied to the complete or partial retirement of the Prudential
Existing Notes or any Future Permitted Private Placement Debt (whether by
prepayment or reacquisition by the Parent or such Subsidiary or otherwise), each
Lender's Revolving Credit Commitment shall be reduced by the percentage
equivalent of a fraction whose numerator is the aggregate outstanding principal
amount of the Prudential Existing Notes and the Future Permitted Private
Placement Debt so retired and whose denominator is the aggregate outstanding
principal amount of the Prudential Existing Notes and the Future Permitted
Private Placement Debt immediately prior to such retirement. The Parent shall
give the Administrative Agent and the Lenders at least seven days' prior written
notice of any complete or partial retirement of the Prudential Existing Notes or
the Future Permitted Private Placement Debt out of proceeds of any such sale(s)
of assets.
(d) Each reduction in the Revolving Credit Commitments hereunder shall
be made ratably among the Lenders in accordance with their respective Revolving
Credit Commitments. The Parent shall pay to the Administrative Agent for the
account of the applicable Lenders, on the date of each termination or reduction,
the Commitment Fees on the amount of the Revolving Credit Commitments so
terminated or reduced accrued to but excluding the date of such termination or
reduction.
Section 2.11. Conversion and Continuation of Borrowings. (a) The
Parent (on its own behalf, in the case of a Borrowing denominated in dollars; or
on behalf of the applicable Foreign Subsidiary Borrower, in the case of a
Borrowing denominated in a Foreign Currency) or the applicable Foreign
Subsidiary Borrower (in the case of a Borrowing denominated in a Foreign
Currency) shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (x) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any LIBOR Borrowing in dollars into
an ABR Borrowing, (y) not later than 11:00 a.m., New York City time (or 11:00
a.m., London time, if a Borrowing is being continued as or converted to a
Borrowing denominated in a Foreign Currency), three Business Days prior to
conversion or continuation, to convert any ABR Borrowing of Syndicated Loans
into a LIBOR Borrowing in dollars or to continue any LIBOR Borrowing as a LIBOR
Borrowing in the same currency for an additional Interest Period or Periods, and
(z) not later than 11:00 a.m., New York City time (or 11:00 a.m., London time,
if such Borrowing is denominated in a Foreign Currency), three Business Days
prior to conversion, to convert the Interest Period with respect to any LIBOR
Borrowing to another permissible Interest Period, subject in each case to the
following:
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(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.2(a) and 2.2(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any LIBOR Loan (or portion thereof)
being converted shall be paid by the applicable Borrower at the time of
conversion;
(iv) if any LIBOR Borrowing is converted at a time other than the end
of the Interest Period applicable thereto, the applicable Borrower shall
pay, upon demand, any amounts due the Lenders pursuant to Section 4.4;
(v) no ABR Borrowing may be converted into a LIBOR Borrowing during
the one-month period prior to the Maturity Date; and no LIBOR Borrowing
whose Interest Period ends during the one-month period prior to the
Maturity Date may be continued as a LIBOR Borrowing for an additional
Interest Period; and
(vi) any portion of a LIBOR Borrowing that cannot be continued as a
LIBOR Borrowing by reason of the immediately preceding clause shall at the
end of the Interest Period in effect for such Borrowing be automatically
converted into an ABR Borrowing (if such LIBOR Borrowing is denominated in
dollars) or repaid by the applicable Borrower (if such LIBOR Borrowing is
denominated in a Foreign Currency).
Each notice pursuant to this Section shall be irrevocable and shall
refer to this Agreement and specify (i) the identity of the Borrower of the
applicable Borrowing and the amount of the Borrowing that is requested to be
converted or continued, (ii) whether such Borrowing is to be converted to or
continued as a LIBOR Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day), and (iv) if such Borrowing is to be converted to or continued as a LIBOR
Borrowing, the Interest Period with respect thereto. No such notice shall be
given more than seven Business Days prior to the effective date of the
applicable conversion or continuation. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a LIBOR
Borrowing, the applicable Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall advise the
Lenders of any notice given pursuant to this Section and of each Lender's
portion of any converted or continued Borrowing. If notice shall not have been
given in accordance with this Section to continue any LIBOR Borrowing of
Syndicated Loans into a subsequent Interest Period or (in the case of the
Borrowing denominated in dollars) to convert such Borrowing to an ABR Borrowing,
such
24
Borrowing at the end of the Interest Period applicable thereto shall
automatically be converted to an ABR Borrowing (if such Borrowing is denominated
in dollars) or shall be repaid (if such Borrowing is denominated in a Foreign
Currency).
(b) Notwithstanding any contrary provision contained in this
Agreement, upon notice to the Parent from the Administrative Agent given at the
request of the Required Lenders, after the occurrence and during the continuance
of an Event of Default, (i) no outstanding Loan denominated in dollars may be
converted into, or continued as, a LIBOR Loan, and (ii) each LIBOR Borrowing
(unless such Borrowing is paid at or before the end of the Interest Period
applicable thereto) shall at the end of the Interest Period applicable thereto
(if such Borrowing is denominated in dollars) be converted to an ABR Borrowing
or (if such Borrowing is denominated in a Foreign Currency) be continued as a
LIBOR Borrowing with an Interest Period of one month's duration in the same
currency, subject to paragraph (c) of this Section.
(c) Notwithstanding anything to the contrary contained in this
Agreement, if an Event of Default described in paragraph (e) of Section 10.1
occurs (other than clause (i) thereof), or if the maturity of the Loans is
accelerated pursuant to Article 10, all Loans denominated in a Foreign Currency
shall on the date of such occurrence or acceleration be converted into, and all
amounts due thereunder shall accrue and be payable in, dollars at the current
Exchange Rate on such date, and on and after such date the interest rate
applicable thereto shall be the rate applicable to overdue ABR Loans.
(d) A Swingline Loan may not be converted into a LIBOR Loan.
Section 2.12. Optional Prepayment. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days' (in the case of LIBOR Borrowings) or
one Business Day's (in the case of ABR Borrowings of Syndicated Loans) prior
written or telecopy notice to the Administrative Agent before 11:00 a.m., New
York City time (or 11:00 a.m., London time, if such Borrowing is denominated in
a Foreign Currency), or (in the case of a Borrowing of a Swingline Loan) upon
such notice to the Administrative Agent before 11:00 a.m., New York City time,
on the day of such prepayment; provided, however, that each partial prepayment
shall be in an amount that is an integral multiple of $500,000 (in the case of a
Borrowing denominated in dollars) and not less than $1,000,000 (or the Foreign
Currency Equivalent of $1,000,000, if such Borrowing is denominated in a Foreign
Currency). Notwithstanding the immediately preceding sentence, the
Administrative Agent agrees that it will (subject to the Authorization Letter)
accept from the Parent notice by telephone of prepayment by the dates and time
specified in the immediately preceding sentence, provided that the same is
confirmed by the Parent to the Administrative Agent in writing promptly (and in
all events on the same day as such telephone communication).
(b) Each notice of prepayment shall specify the identity of the
Borrower, the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
applicable Borrower to prepay such Borrowing by the amount stated therein on the
date stated therein. All prepayments under this Section shall be subject to
Section 4.4 but otherwise without premium or penalty. All prepayments under this
25
Section shall be accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
Section 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments, each Borrower shall on the
date of such termination repay or prepay all its outstanding Borrowings of
Syndicated Loans and Swingline Loans and (if any L/C Exposure exists) the Parent
shall remit to the Administrative Agent for deposit in the Cash Collateral
Account cash in an amount equal to the L/C Exposure to secure the payment when
due of the reimbursement obligation of the Parent in respect of the aggregate
undrawn face amount of Letters of Credit.
(b) In the event of any partial reduction of the Revolving Credit
Commitments, then (x) at or prior to the effective date of such reduction, the
Administrative Agent shall notify the Parent and the Lenders of the Aggregate
Credit Exposure after giving effect thereto and (y) if the Aggregate Credit
Exposure would exceed the Total Revolving Credit Commitment after giving effect
to such reduction, then on the date of such reduction one or more Borrowers
shall prepay its or their respective Borrowings in an amount sufficient to
eliminate such excess, and (if the prepayment of Borrowings is not sufficient to
eliminate such excess) the Parent shall remit to the Administrative Agent for
deposit in the Cash Collateral Account cash in the remaining amount of such
excess to secure the payment when due of the reimbursement obligation of the
Parent in respect of the aggregate undrawn face amount of Letters of Credit.
Without limiting the generality of the reductions referred to in this paragraph
of the Revolving Credit Commitments, such reductions shall include reductions
referred to in Section 2.10(c).
(c) In addition, if as of the last Business Day of each calendar month
the Dollar Equivalent (computed by the Administrative Agent using the current
Exchange Rate as of such Business Day and promptly notified to the Lenders and
the Parent (on behalf of itself and the Foreign Subsidiary Borrowers)) of the
aggregate outstanding principal balance of Foreign Currency Loans shall exceed
110% of the Foreign Currency Sublimit Dollar Amount, one or more Foreign
Subsidiary Borrowers shall, within five Business Days after the Parent's receipt
of such notice, prepay Foreign Currency Loans in an amount sufficient so as to
reduce the Dollar Equivalent of the aggregate outstanding principal balance of
Foreign Currency Loans to an amount that is equal to or less than the Foreign
Currency Sublimit Dollar Amount.
(d) All prepayments of Borrowings under this Section shall be subject
to Section 4.4, but shall otherwise be without premium or penalty.
(e) Amounts to be applied pursuant to this Section to the prepayment
by the Parent of Swingline Loans and/or Syndicated Loans shall be applied, as
applicable, first to reduce outstanding Swingline Loans, then to reduce
outstanding Syndicated Loans that are ABR Loans. Any amounts remaining after
each such application shall be applied to prepay LIBOR Loans of the Parent
immediately and/or, if elected by the Parent so long as no Event of Default
exists, be deposited in the Cash Collateral Account; and any amount to be
remitted by the Parent pursuant to paragraph (a) or (b) of this Section in
respect of Letters of Credit shall be deposited in the Cash Collateral Account.
In the case of such an immediate prepayment of LIBOR Loans of the Parent, the
Parent shall (unless an Event of Default exists) be entitled to designate which
LIBOR Borrowings of the Parent are to be prepaid, by giving written notice of
such designation
26
to the Administrative Agent at or before the remittance to the Administrative
Agent of the amounts to be applied in prepayment. Amounts to be applied pursuant
to this Section to the prepayment by a Foreign Subsidiary Borrower of Syndicated
Loans shall be applied to prepay LIBOR Loans of such Foreign Subsidiary Borrower
immediately and/or, if elected by the Parent (on behalf of such Foreign
Subsidiary Borrower) or such Foreign Subsidiary Borrower so long as no Event of
Default exists, be deposited in the Cash Collateral Account. In the case of such
an immediate prepayment by a Foreign Subsidiary Borrower of LIBOR Loans of such
Foreign Subsidiary Borrower, the Parent (on behalf of such Foreign Subsidiary
Borrower) or such Foreign Subsidiary Borrower shall (unless an Event of Default
exists) be entitled to designate which LIBOR Borrowings of such Foreign
Subsidiary Borrower are to be prepaid, by giving written notice of such
designation to the Administrative Agent at or before the remittance to the
Administrative Agent of the amounts to be applied in prepayment.
(f) The Administrative Agent shall apply any cash deposited in the
Cash Collateral Account (i) in respect of LIBOR Loans of the Parent, to prepay
LIBOR Loans of the Parent on the last day of their respective Interest Periods
(or, at the direction of the Parent, on any earlier date) until all such
outstanding Loans have been prepaid or until all the allocable cash on deposit
with respect to such Loans has been exhausted; (ii) in respect of L/C Exposure,
to pay as and when the same becomes due the reimbursement obligation of the
Parent in respect of Letters of Credit; and (iii) in respect of LIBOR Loans of a
Foreign Subsidiary Borrower, to prepay LIBOR Loans of such Foreign Subsidiary
Borrower on the last day of their respective Interest Periods (or, at the
direction of the Parent on behalf of such Foreign Subsidiary Borrower, on any
earlier date) until all such outstanding Loans of such Foreign Subsidiary
Borrower have been prepaid or until all the allocable cash on deposit with
respect to such Loans has been exhausted. If any Letter of Credit so secured by
such cash collateral expires without being drawn (or, if drawn, whose
reimbursement is paid by the Parent with funds other than such cash collateral),
the Administrative Agent shall remit to the Parent such cash collateral securing
such Letter of Credit promptly after a request by the Parent therefor, provided
that no Default or Event of Default exists. For purposes of this Agreement, the
term "Cash Collateral Account" shall mean an account established by the Parent
(on its own behalf or on behalf of the applicable Foreign Subsidiary Borrower)
with the Administrative Agent and over which the Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal for
application in accordance with this paragraph. The Administrative Agent will, at
the request of the Parent (on its own behalf or on behalf of the applicable
Foreign Subsidiary Borrower), invest amounts on deposit in the Cash Collateral
Account in Permitted Investments; provided, however, that (i) the Administrative
Agent shall not be required to make any investment that, in its sole judgment,
would require or cause the Administrative Agent to be in, or would result in
any, violation of any law, statute, rule or regulation, and (ii) the
Administrative Agent shall have no obligation to invest amounts on deposit in
the Cash Collateral Account if an Event of Default shall have occurred and be
continuing, and (iii) as to amounts on deposit for the prepayment of LIBOR
Borrowings, such Permitted Investments shall mature prior to the last day of the
applicable Interest Periods of the LIBOR Borrowings to be prepaid. The Parent or
the applicable Foreign Subsidiary Borrower (as the case may be) shall indemnify
the Administrative Agent for any losses relating to the investments so that the
amount available to prepay LIBOR Borrowings of the Parent or the applicable
Foreign Subsidiary Borrower (as the case may be) on the last day of the
applicable Interest Period, and (in the case of the Parent) to pay L/C Exposure
as and when the same becomes due, is not less than the amount that would have
been available had no
27
investments been made pursuant hereto. Other than any interest earned on such
investments, the Cash Collateral Account shall not bear interest. Interest or
profits, if any, on such investments shall be deposited in the Cash Collateral
Account and reinvested and disbursed as specified above. If the maturity of the
Loans has been accelerated pursuant to this Agreement, the Administrative Agent
may, in its sole discretion, apply all amounts on deposit in the Cash Collateral
Account to satisfy any of the amounts due under this Agreement or any other
Facility Document, except that amounts deposited in the Cash Collateral Account
by a Foreign Subsidiary Borrower in respect of LIBOR Loans of such Foreign
Subsidiary Borrower shall not be applied to the Loans or other amounts owing
under this Agreement by the other Foreign Subsidiary Borrower or to the Loans or
other amounts owing under this Agreement by the Parent. Each Borrower hereby
grants to the Administrative Agent, for the benefit of the Administrative Agent,
the Swingline Bank, the Issuing Bank and the Lenders, a security interest in the
Cash Collateral Account to secure all amounts due from such Borrower under this
Agreement and (in the case of the Parent) due from the Parent under the Parent
Guarantee.
Section 2.14. Payments. (a) Each Borrower shall make each payment
required to be made by it hereunder and under any Facility Document (whether of
principal, interest, fees, reimbursement of L/C Disbursements or otherwise) not
later than 12:00 noon, local time at the place of payment, on the date when due
in immediately available funds, without setoff, defense or counterclaim. Any
amounts received after such time on any date may, in the reasonable discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. Each such
payment (other than Issuing Bank Fees, which shall be paid directly to the
Issuing Bank) shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (or as otherwise instructed by the
Administrative Agent, in the case of amounts payable in a Foreign Currency) or
to such other address as the Administrative Agent may designate to the Parent in
writing. Each such payment shall be made in dollars, except that (subject to
Section 2.11(c)) (i) all principal of and interest on each Loan denominated in a
Foreign Currency shall be made in such Foreign Currency and (ii) any amounts
payable in respect of reimbursement of expenses or indemnification incurred in a
currency other than dollars shall be paid in such currency unless otherwise
agreed by the relevant parties. The Administrative Agent, or any Lender for
whose account any such payment is to be made, may (but shall not be obligated
to) debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Parent or the applicable Foreign Subsidiary
Borrower with the Administrative Agent or such Lender, as the case may be, and
any Lender so doing shall promptly notify the Administrative Agent; such Lender
or (if the Administrative Agent effects such debit) the Administrative Agent
shall promptly after effecting such debit give notice thereof to the Parent (on
behalf of itself or the applicable Foreign Subsidiary Borrower) as well,
provided, however, that a failure to give such notice to the Parent or the
applicable Foreign Subsidiary Borrower shall not affect the validity of such
debit or place such Lender or the Administrative Agent under any liability to
the Parent or the applicable Foreign Subsidiary Borrower. Each Borrower (or the
Parent on behalf of the applicable Foreign Subsidiary Borrower) shall, at the
time of making each payment under this Agreement or the Notes, specify to the
Administrative Agent the principal or other amount payable by the applicable
Borrower under this Agreement or the Notes to which such payment is to be
applied (and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing), the Administrative Agent may apply
such payment as it may elect in its sole discretion (subject to Section 11.16)).
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(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Facility
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may, except as otherwise provided in the definition
of Interest Period, be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.
Section 2.15. Purpose. Each Borrower shall use the proceeds of the
Loans borrowed by it for working capital and general corporate purposes. Such
proceeds shall not be used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of Regulation
U in contravention of Regulation U.
Section 2.16. Increase of Total Revolving Credit Commitment. The
Parent may from time to time elect to increase the Total Revolving Credit
Commitment, provided that (i) each such increase is not less than $5,000,000 and
(ii) after giving effect to each increase that becomes effective, the aggregate
amount of increases of the Total Revolving Credit Commitment under this Section
does not exceed $50,000,000. The Parent may arrange for any such increase to be
provided by (a) one or more then-existing Lenders agreeing (in the sole
discretion of such Lenders) to an increase in their own respective Revolving
Credit Commitments (each Lender so agreeing to an increase in its Revolving
Credit Commitment being called herein an "Increasing Lender") and/or (b) one or
more banks, financial institutions or other entities becoming party to this
Agreement as Lenders and providing Revolving Credit Commitments (each such bank,
financial institution or other entity being called an "Augmenting Lender"),
provided that (x) each Augmenting Lender shall be subject to the approval of the
Parent, the Administrative Agent, the Issuing Bank and the Swingline Bank (such
approval, in each case, not to be unreasonably withheld) and (y) the Borrowers
and the relevant Increasing Lenders and Augmenting Lenders shall execute and
deliver all such documentation as the Administrative Agent shall reasonably
request (in form and substance reasonably satisfactory to the Administrative
Agent) solely to evidence (in the case of an Increasing Lender) the increased
Revolving Credit Commitment of such Increasing Lender or (in the case of an
Augmenting Lender) the status of the Augmenting Lender as a Lender and its new
Revolving Credit Commitment (which documentation, including an amendment to this
Agreement, shall not be required to be executed by any Lender other than such
Increasing Lender(s) and/or Augmenting Lender(s) as applicable). Increases in
Revolving Credit Commitments and new Revolving Credit Commitments shall become
effective on the date agreed by the Borrowers, the Administrative Agent and (as
applicable) the Increasing Lenders and Augmenting Lenders, and the
Administrative Agent shall notify the other Lenders thereof. Notwithstanding the
foregoing, no increase in the Total Revolving Credit Commitment shall become
effective pursuant to this Section unless (aa) on the proposed date of the
effectiveness of such increase, the conditions set forth in paragraphs (a) and
(b) of Section 5.2 are satisfied as of such date (and the Administrative Agent
shall have received a certificate to that effect dated such date executed by the
Borrowers) as if such increase were an extension of credit hereunder and (bb)
the Administrative Agent shall have received documents consistent with those
delivered on the Closing Date under paragraphs (d), (e) and (f) of Section 5.1
as to the corporate power and authority of each Borrower to borrow and otherwise
obtain extensions of credit hereunder after giving effect to such increase. Each
increase in the Total Revolving Credit Commitment that becomes effective shall
automatically effectuate an increase in the Foreign Currency Sublimit
29
Dollar Amount by an amount equal to one-half of such increase in the Total
Revolving Credit Commitment. On the effective date of each such increase in the
Total Revolving Credit Commitment, each Borrower shall make such Borrowings and
repayments as shall, in the determination of the Administrative Agent, be
necessary to effect the reallocation of Pro Rata Percentages in outstanding
Syndicated Loans to each Borrower that is represented by the increase and/or
addition of Revolving Credit Commitments pursuant to this Section, and such
repayments shall be subject to indemnification by the applicable Borrower
pursuant to Section 4.4 if any repayment occurs on a day other than the last day
of the applicable Interest Period.
ARTICLE 3. LETTERS OF CREDIT
Section 3.1. Letters of Credit. Subject to the terms and conditions
hereof, the Parent may request, and the Issuing Bank shall issue, one or more
standby or commercial letters of credit (each a "Letter of Credit") denominated
in dollars, for the account of the Parent or any Foreign Subsidiary Borrower, in
form acceptable to the Issuing Bank, from time to time during the Availability
Period, provided that, after giving effect to the issuance thereof:
(a) the L/C Exposure shall not exceed $15,000,000, and
(b) the Aggregate Credit Exposure shall not exceed the Total Revolving
Credit Commitment.
Section 3.2 Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Parent (on its own behalf or
on behalf of the applicable Foreign Subsidiary Borrower) shall hand deliver or
telecopy to the Issuing Bank and the Administrative Agent (not later than two
Business Days in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit (together
with, if requested by the Issuing Bank, a completed Letter of Credit application
in the Issuing Bank's then standard form), or identifying the Letter of Credit
to be amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with Section 3.3), the amount of such Letter of Credit, the name and
address of the beneficiary thereof, the account party thereof and such other
information as shall be necessary to prepare such Letter of Credit.
Notwithstanding the immediately preceding sentence, the Issuing Bank and the
Administrative Agent agree that they will (subject to the Authorization Letter)
accept from the Parent such notice by telephone by the date that is two Business
Days in advance as aforesaid, provided that such notice is confirmed in writing
promptly (and in all events on the same day as such telephone communication) and
that (in the case of a requested issuance of a Letter of Credit) such
confirmation is accompanied by such completed Letter of Credit application form.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Parent (on its own behalf or on
behalf of the applicable Foreign Subsidiary Borrower) to, or entered into by the
Parent with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
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Section 3.3. Minimum Amount; Expiration Date. (a) The stated amount of
each Letter of Credit shall not be less than $1,000,000 or such lesser amount as
is acceptable to the Issuing Bank.
(b) Each Letter of Credit shall expire by its terms not later than the
earlier of (A)(i) in the case of a commercial Letter of Credit, 180 days after
the issuance thereof (unless the Issuing Bank agrees to a more extended expiry
date) or (ii) in the case of a standby Letter of Credit, one year after the date
of issuance thereof (subject to an "evergreen" provision, if and to the extent
acceptable to the Issuing Bank); or (B) the day that is five Business Days
before the Maturity Date.
Section 3.4. Participations. By the issuance of each Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, as provided in Section 3.5, such Lender's Pro Rata
Percentage of each L/C Disbursement made by the Issuing Bank and not reimbursed
by the applicable Borrower forthwith on the date due as provided in Section 3.5,
or of any reimbursement payment required to be refunded to such Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of a Letter of Credit,
or the occurrence and continuance of a Default or an Event of Default, or a
reduction or termination of the Revolving Credit Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. The Administrative Agent and the Issuing Bank shall be entitled to
offset amounts received for the account of a Lender under this Agreement or any
of the other Facility Documents against unpaid amounts due from such Lender to
the Administrative Agent or the Issuing Bank hereunder.
Section 3.5. Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the applicable Borrower shall
reimburse such L/C Disbursement by paying to the Administrative Agent an amount
equal to such L/C Disbursement not later than 12:00 noon, New York City time, on
the date that such L/C Disbursement is made, if such Borrower shall have
received notice of such L/C Disbursement prior to 10:00 a.m., New York City
time, on such date, or, if such notice has not been received by such Borrower
prior to such time on such date, then not later than 12:00 noon, New York City
time, on (i) the Business Day that such Borrower receives such notice, if such
notice is received prior to 10:00 a.m., New York City time, on the day of
receipt, or (ii) the Business Day immediately following the day that such
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that, if such L/C Disbursement is not less than
$1,000,000, such Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.3 or 2.4 that such payment be
financed with a Syndicated Borrowing of ABR Loans or a Swingline Loan in an
equivalent amount and, to the extent so financed, such Borrower's obligation to
make such payment shall be deemed reimbursed, discharged and replaced by the
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resulting Syndicated Borrowing of ABR Loans or such Swingline Loan. If such
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable L/C Disbursement, the payment then due from
such Borrower in respect thereof and such Lender's Pro Rata Percentage thereof.
Upon its receipt of such notice, each Lender shall pay to the Administrative
Agent such Lender's Pro Rata Percentage of the payment then due from such
Borrower, in immediately available funds not later than 2:00 p.m., New York City
time, on the day such Lender receives such notice (or if such Lender shall have
received such notice later than 12:00 noon, then not later than 10:00 a.m., New
York City time, on the next succeeding Business Day). If any Lender does not pay
to the Administrative Agent the amount of such Lender's Pro Rata Percentage of
the payment then due from the applicable Borrower as required by the immediately
preceding sentence, such Lender shall (independently of and in addition to such
Borrower's obligation to pay interest on such amount) pay interest on such
amount, for each day from and including the date such amount is so required to
be paid by such Lender to but excluding the date such amount is paid, to the
Administrative Agent for the account of the Issuing Bank at (i) for the first
such day, the Federal Funds Effective Rate, and (ii) for each day thereafter one
percent per annum in excess of the Federal Funds Effective Rate. The
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the applicable Borrower pursuant to
this Section, the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any L/C Disbursement (other
than the funding of ABR Syndicated Loans or a Swingline Loan as contemplated
above) shall not constitute a Loan and shall not relieve the Parent of its
obligation to reimburse such L/C Disbursement. Notwithstanding anything in this
Article 3 to the contrary, the maximum amount that any Lender shall be required
to fund in respect of any L/C Disbursement, whether pursuant to Section 3.4 or
this Section or as an ABR Loan pursuant to this Section, shall not exceed such
Lender's Pro Rata Percentage of such L/C Disbursement.
Section 3.6. Obligations Absolute. Each Borrower's obligation to
reimburse L/C Disbursements as provided in Section 3.5 shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or
any Facility Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Facility Document;
(iii) the existence of any claim, setoff, defense or other right that
such Borrower, any other party guaranteeing, or otherwise obligated with,
such Borrower, any Subsidiary or other Affiliate thereof or any other
person may at any time have against the beneficiary under any Letter of
Credit, the Issuing Bank, the Administrative Agent or any Lender or any
other Person, whether in connection with this Agreement, any other Facility
Document or any other related or unrelated agreement or transaction;
32
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit, provided that such draft and other
documents substantially comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other Person or
any other event or circumstances whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of such Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of each
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or willful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
each Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by such Borrower to the
extent permitted by applicable law) suffered by such Borrower that are caused by
the Issuing Bank's gross negligence or willful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuing Bank.
Section 3.7. Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall as promptly
as possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the applicable Borrower of such demand for payment and
whether the Issuing Bank has made or will make an L/C Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve such Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such L/C Disbursement. The Administrative Agent
shall promptly give each Lender notice thereof.
33
Section 3.8. Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the applicable
Borrower shall reimburse such L/C Disbursement in full on the date on which such
L/C Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date of such L/C Disbursement to but excluding
the date that such Borrower reimburses such L/C Disbursement, at the rate per
annum that would apply to such amount if such amount were an ABR Loan. Interest
accrued pursuant to this Section shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to Section 3.4 or 3.5 to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
Section 3.9. Letter of Credit Fees. Each Borrower agrees to pay (i) to
each Lender, through the Administrative Agent, on the last day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding quarter (or
shorter period commencing with the date hereof, or ending with the Maturity Date
or the date on which all Letters of Credit have been canceled or have expired
and the Revolving Credit Commitments of all Lenders have been terminated) at a
rate equal to (in the case of standby Letters of Credit) the same Applicable
Rate used to determine the interest rate applicable to LIBOR Loans and (in the
case of commercial Letters of Credit) 0.20% per annum, and (ii) to the Issuing
Bank with respect to each Letter of Credit, a facing fee at a rate equal to
0.0625% per annum in respect of each standby Letter of Credit (payable at the
same times that the L/C Participation Fee is payable) plus, in the case of any
Letter of Credit, the standard issuance and drawing fees specified from time to
time by the Issuing Bank (the "Issuing Bank Fees"). All L/C Participation Fees
and Issuing Bank Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. The L/C Participation Fee and the Issuing
Bank Fees shall be paid on the dates due in immediately available funds, (in the
case of the L/C Participation Fee) to the Administrative Agent for distribution
as appropriate among the Lenders and (in the case of the Issuing Bank Fees)
directly to the Issuing Bank.
Section 3.10. Resignation of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Parent. The Parent shall have the
right to appoint any Lender as successor Issuing Bank, subject to the consent of
the Required Lenders including the appointed Lender (which consent of the
appointed Lender shall be in such Lender's sole discretion, and which consent of
the other Required Lenders shall not be unreasonably withheld). Upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the retiring
Issuing Bank (except to the extent provided for in the last sentence of this
Section) and the retiring Issuing Bank shall be discharged from its obligations
to issue additional Letters of Credit hereunder. At the time such resignation
shall become effective, each Borrower shall pay to such retiring Issuing Bank
all accrued and unpaid Issuing Bank Fees on the Letters of Credit issued for
such Borrower's account. The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form satisfactory to the Parent and the Administrative
Agent, and from and after
34
the effective date of such agreement (i) such successor Lender shall have all
the rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Facility Documents with respect to Letters of Credit
issued by it prior to such resignation, but shall not be required to issue
additional Letters of Credit.
Section 3.11. Not Fiduciary. In no event shall the Issuing Bank be
deemed a fiduciary of the Lenders with respect to Letters of Credit. As between
the Issuing Bank (on the one hand) and the Lenders (on the other hand), the
Issuing Bank shall have in connection with the Letters of Credit all the rights
and protections that are afforded to the Administrative Agent in Article 11.
Section 3.12. Purpose. No Letter of Credit shall be used by any
Borrower for the purpose, whether immediate, incidental or ultimate, of buying
or carrying "margin stock" within the meaning of Regulation U in contravention
of Regulation U.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.
Section 4.1. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a LIBOR Borrowing denominated in any currency:
(a) the Administrative Agent determines (which determination, if made
on a reasonable and nondiscriminatory basis, shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Borrowing for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Parent (on behalf
of itself and the Foreign Subsidiary Borrowers, if applicable) and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Parent (on behalf of itself and the Foreign
Subsidiary Borrowers, if applicable) and the Lenders that the circumstances
giving rise to such notice no longer exist, (i) any request to convert any
Borrowing to, or to continue any Borrowing as, a LIBOR Borrowing in such
currency shall be ineffective, and any LIBOR Borrowing denominated in such
currency shall be repaid on the last day of the then current Interest Period
with respect thereto or (at the option of the Parent, in the case of a LIBOR
Borrowing denominated in dollars) shall be converted to an ABR Borrowing in
accordance with this Agreement on the last day of the then current Interest
Period with respect thereto, (ii) if any Syndicated Loan Borrowing Request
requests a LIBOR Borrowing denominated in such currency, (x) if such currency is
dollars, such Borrowing shall be made as
35
an ABR Borrowing, and (y) if such currency is not dollars, such Borrowing
Request shall be ineffective.
Section 4.2. Reserve Requirement; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the
Swingline Bank or the Issuing Bank of the principal of or interest on any LIBOR
Loan made by such Lender or any Fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income of such
Lender or the Swingline Bank or the Issuing Bank by the jurisdiction in which
such Lender or the Swingline Bank or the Issuing Bank has its principal office
or by any political subdivision or taxing authority therein), or shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by any
Lender or the Swingline Bank or the Issuing Bank (except only such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or the Swingline Bank or the Issuing Bank or the London interbank
market (or other relevant interbank market) any other condition affecting this
Agreement or LIBOR Loans made by such Lender or any Letter of Credit or
participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Swingline Bank or the Issuing Bank of
making or maintaining any LIBOR Loan or of issuing or maintaining any Letter of
Credit or purchasing or maintaining a participation therein or to reduce the
amount of any sum received or receivable by such Lender or the Swingline Bank or
the Issuing Bank hereunder in respect thereof (whether of principal, interest or
otherwise) by an amount deemed by such Lender or the Swingline Bank or the
Issuing Bank to be material, then the Parent or the applicable Foreign
Subsidiary Borrower shall pay to such Lender or the Swingline Bank or the
Issuing Bank, as the case may be, upon demand such additional amount or amounts
as will compensate such Lender or the Swingline Bank or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered. There
shall be no duplication of payments in respect of Indemnified Taxes and Other
Taxes required to be made by this Section and by Section 4.5.
(b) If any Lender or the Swingline Bank or the Issuing Bank shall have
determined that the adoption after the date hereof of any law, rule, regulation,
agreement or guideline regarding capital adequacy or any change after the date
hereof in any law, rule, regulation, agreement or guideline regarding capital
adequacy (whether or not such law, rule, regulation, agreement or guideline has
been adopted) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
the Swingline Bank or the Issuing Bank or any Lender's or the Swingline Bank's
or the Issuing Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any Governmental
Authority has or would have the effect of reducing the rate of return on such
Lender's or the Swingline Bank's or the Issuing Bank's capital or on the capital
of such Lender's or the Swingline Bank's or the Issuing Bank's holding company,
if any, as a consequence of this Agreement or the Loans made or participation in
Letters of Credit purchased by such Lender or by the Swingline Bank pursuant
hereto or the Letters of Credit issued by the Issuing Bank pursuant hereto to a
level below that which such Lender or the Swingline Bank or
36
the Issuing Bank or such Lender's or the Swingline Bank's or the Issuing Bank's
holding company could have achieved but for such applicability, adoption, change
or compliance (taking into consideration such Lender's or the Swingline Bank's
or the Issuing Bank's policies and the policies of such Lender's or the
Swingline Bank's or the Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Swingline Bank or the
Issuing Bank to be material, then from time to time the Parent or the applicable
Foreign Subsidiary Borrower shall pay to such Lender or the Swingline Bank or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Swingline Bank or the Issuing Bank or such
Lender's or the Swingline Bank's or the Issuing Bank's holding company for any
such reduction suffered.
(c) A certificate of a Lender or the Swingline Bank or the Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
the Swingline Bank or the Issuing Bank or its holding company, as applicable, as
specified in paragraph (a) or (b) above shall be delivered to the Parent and
shall (if the determination of such amount or amounts is made on a reasonable
and nondiscriminatory basis) be conclusive absent manifest error. The Parent or
the applicable Foreign Subsidiary Borrower shall pay such Lender or the
Swingline Bank or the Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 days after receipt by the Parent of the
same.
(d) Failure or delay on the part of any Lender or the Swingline Bank
or the Issuing Bank to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender's or the Swingline Bank or the Issuing Bank's
right to demand such compensation; provided, however, that if any Lender or the
Swingline Bank or the Issuing Bank demands such compensation in respect of a
period prior to the date on which written demand therefor is given to the
Parent, then the obligation of the Parent or the applicable Foreign Subsidiary
Borrower to pay such compensation in respect of such period shall be limited to
the three months prior to the giving of such written demand, plus (if such
demand results from a retroactive change in the aforesaid law, regulation,
interpretation, administration, or guideline) the period of such retroactivity;
however, such limitation shall not apply in respect of the period from and after
the giving of such written demand. The protection of this Section shall be
available to each Lender and the Swingline Bank or the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the law,
rule, regulation, agreement, guideline or other change or condition that shall
have occurred or been imposed.
Section 4.3. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any LIBOR Loan denominated in a particular
currency or to give effect to its obligations as contemplated hereby with
respect to any LIBOR Loan denominated in a particular currency, then, by written
notice to the Parent (on behalf of itself or a Foreign Subsidiary Borrower, as
applicable) and to the Administrative Agent:
37
(x) such Lender may declare that LIBOR Loans in such currency will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods) and that Loans
of any other Type will not thereafter (for such duration) be converted into
LIBOR Loans denominated in such currency; whereupon (if such currency is
dollars) any request for a LIBOR Borrowing in dollars (or to convert an ABR
Borrowing into a LIBOR Borrowing in dollars or to continue a LIBOR
Borrowing in dollars for an additional Interest Period) shall as to such
Lender only be deemed a request for an ABR Loan unless such declaration is
subsequently withdrawn; and
(y) such Lender may require that all outstanding LIBOR Loans made by
it in such currency be converted to ABR Loans (if such currency is dollars)
or be repaid by the applicable Foreign Subsidiary Borrower (if such
currency is a Foreign Currency), in which event all such LIBOR Loans shall
be so converted or repaid (as applicable) as of the effective date of such
notice as provided in paragraph (b) of this Section.
In the case of any conversion pursuant to the exercise by any Lender of its
rights under clause (x) or (y) above, all payments and prepayments of principal
that would otherwise have been applied to repay the LIBOR Loans in dollars that
would have been made by such Lender or the converted LIBOR Loans in dollars of
such Lender shall instead be applied to repay the ABR Loans made by such Lender
in lieu of, or resulting from the conversion of, such LIBOR Loans in dollars.
(b) For purposes of this Section, a notice to the Parent by any Lender
shall be effective as to each LIBOR Loan made by such Lender, if lawful, on the
last day of the Interest Period then applicable to such LIBOR Loan; in all other
cases such notice shall be effective on the date of receipt by the Parent.
Section 4.4. Indemnity. As to the Loans of each Borrower, such
Borrower shall indemnify each Lender against any loss or expense that such
Lender may sustain or incur as a consequence of (a) any event, other than a
default by such Lender in the performance of its obligations hereunder, which
results in (i) such Lender receiving or being deemed to receive any amount on
account of the principal of any LIBOR Loan prior to the end of the Interest
Period in effect therefor, (ii) the conversion of any LIBOR Loan to an ABR Loan,
or the conversion of the Interest Period with respect to any LIBOR Loan, in each
case other than on the last day of the Interest Period in effect therefor, or
(iii) any LIBOR Loan to be made by such Lender (including any LIBOR Loan to be
made pursuant to a conversion or continuation under Section 2.11) not being made
after notice of such Loan shall have been given by the Parent or applicable
Foreign Subsidiary Borrower hereunder (any of the events referred to in this
clause (a) being called a "Breakage Event") or (b) any default in the making of
payment or prepayment required to be made hereunder. In the case of any Breakage
Event, such loss shall include an amount equal to the excess, as reasonably
determined by such Lender, of (i) its cost of obtaining funds for the LIBOR Loan
that is the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that would
have been in effect) for such Loan over (ii) the amount of interest likely to be
realized by such Lender in redeploying the funds released or not utilized by
reason of such Breakage Event for such period. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
38
pursuant to this Section shall be delivered to the Parent (on behalf of itself
or the applicable Foreign Subsidiary Borrower) and shall (if the determination
of such amount or amounts is made on a reasonable and nondiscriminatory basis)
be conclusive absent manifest error.
Section 4.5. Taxes. (a) Any and all payments by or on account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes except as otherwise required
by applicable law; provided that, if any Borrower shall be required by
applicable law to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent, each Lender, the
Swingline Bank or the Issuing Bank (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
applicable Borrower shall make such deductions, and (iii) the applicable
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes payable by it
to the relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent, each
Lender, the Swingline Bank and the Issuing Bank, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent, such Lender, the Swingline Bank or the Issuing
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of such Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Parent (on behalf of itself or the applicable Foreign Subsidiary
Borrower) by a Lender or the Swingline Bank or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Swingline
Bank or the Issuing Bank, shall (if there is a reasonable basis for such payment
or liability, and if the determination of the amount thereof is made on a
reasonable basis) be conclusive absent manifest error.
(d) After payment by a Borrower to the demanding party of the amount
demanded pursuant to paragraph (c) of this Section, such Borrower shall be
entitled to commence a legal proceeding against the applicable Governmental
Authority to recover the Indemnified Taxes or Other Taxes so paid by the
demanding party; and (after such payment by such Borrower to the demanding
party) the demanding party shall at the sole expense of such Borrower cooperate
with such Borrower as such Borrower may reasonably request with respect to such
legal proceeding, provided that the demanding party may do so without material
risk of liability.
(e) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by a Borrower to a Governmental Authority, such Borrower shall
deliver to the
39
Administrative Agent written evidence thereof reasonably satisfactory to the
Administrative Agent.
(f) If the Administrative Agent or any Lender determines, in its sole
discretion, or becomes aware that it has received, or is entitled to, a refund
of any Taxes or Other Taxes as to which it has been indemnified by the
applicable Borrower or with respect to which such Borrower has paid additional
amounts pursuant to this Section, the Administrative Agent or such Lender, as
the case may be, shall pay over to such Borrower (i) such refund or (ii) if the
Administrative Agent or such Lender, as the case may be, has decided to not make
a claim for a refund to the relevant Governmental Authority, the amount of any
refund the Administrative Agent or such Lender, as the case may be, would have
been entitled, in its reasonable judgment, to receive had it made such claim
(but, in each case, only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all reasonable and documented
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that each Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority.
(g) This Section shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to any Borrower or any other
Person.
Section 4.6. Duty to Mitigate. If (i) any Lender or the Swingline Bank
or the Issuing Bank shall request compensation under Section 4.2, (ii) any
Lender or the Swingline Bank or the Issuing Bank delivers a notice described in
Section 4.3 or (iii) a Borrower is required to pay any additional amount to any
Lender or the Swingline Bank or the Issuing Bank or any Governmental Authority
on account of any Lender or the Swingline Bank or the Issuing Bank, pursuant to
Section 4.5, then such Lender or the Swingline Bank or the Issuing Bank shall
use reasonable efforts (which shall not require such Lender or the Swingline
Bank or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Parent or (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 4.2 or enable it to withdraw its notice pursuant to
Section 4.3 or would reduce amounts payable pursuant to Section 4.5, as the case
may be, in the future. The Parent hereby agrees to pay all reasonable and
documented costs and expenses incurred by any Lender or the Swingline Bank or
the Issuing Bank in connection with any such filing or assignment, delegation
and transfer.
Section 4.7. Replacement of Lenders. If any Lender or the Swingline
Bank or the Issuing Bank requests compensation under Section 4.2, or if any
Lender or the Swingline Bank or the Issuing Bank delivers a notice described in
Section 4.3, or if a Borrower is required
40
to pay any additional amount to any Lender, the Swingline Bank, the Issuing Bank
or any Governmental Authority for the account of any Lender or the Swingline
Bank or the Issuing Bank pursuant to Section 4.5, or if any Lender defaults in
its obligation to fund Loans hereunder, then the Parent may, at its sole expense
and effort, upon notice to such Lender or the Swingline Bank or the Issuing
Bank, as the case may be, and the Administrative Agent, require such Lender or
the Swingline Bank or the Issuing Bank, as the case may be, to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 12.5, which restrictions shall apply, for purposes of this
Section, with reference to the Swingline Bank and the Issuing Bank, as well as
with reference to a Lender) all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) if
the assignee is not a Lender, the Parent shall have received the prior written
consent of the Administrative Agent (and the Swingline Bank and the Issuing
Bank), which consent shall not be unreasonably withheld; and (ii) such Lender or
the Swingline Bank or the Issuing Bank shall have received payment of an amount
equal to the outstanding principal of its Loans and unreimbursed L/C
Disbursements and funded participations in Swingline Loans, accrued interest
thereon and accrued fees and other amounts (including amounts under Sections
4.2, 4.3, 4.4 and 4.5) payable to it hereunder from the assignee or the
applicable Borrower, and (if the Issuing Bank is to be the assignor) the Issuing
Bank shall have received from the Parent cash collateral or other collateral
satisfactory to it, having a value not less than the aggregate undrawn face
amount of all Letters of Credit that are outstanding, as security for the
reimbursement obligation of the Parent in respect of such Letters of Credit; and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 4.2 or payments required to be made pursuant to Section 4.3 or
4.5, such assignment will result in a reduction in such compensation or
payments. A Lender, the Swingline Bank or the Issuing Bank (as the case may be)
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender, the Swingline Bank or the
Issuing Bank (as the case may be) or otherwise, the circumstances entitling the
Parent to require such assignment and delegation cease to apply. The interests,
rights and obligations hereunder of a Lender that serves as either or both of
the Issuing Bank or the Swingline Bank hereunder shall include its interests,
rights and obligations in all such capacities.
Section 4.8. Certain Additional Costs. (a) If and so long as any
Lender is required to comply with reserve assets, liquidity, cash margin or
other requirements of any monetary or other authority (including any such
requirement imposed by the European Central Bank or the European System of
Central Banks, but excluding requirements reflected in the Statutory Reserve
Rate) in respect of any of such Lender's Foreign Currency Loans, such Lender may
require the Borrower to which such Lender has made a Foreign Currency Loan to
pay, contemporaneously with each payment of interest on each of such Lender's
Foreign Currency Loans subject to such requirements, additional interest on such
Foreign Currency Loan at a rate per annum specified by such Lender to be the
cost to such Lender of complying with requirements in relation to such Foreign
Currency Loan. Any additional interest owed pursuant to this paragraph shall be
determined by the relevant Lender, which determination (if made on a reasonable
and nondiscriminatory basis) shall be conclusive absent manifest error, and
notified to the Parent (on behalf of the applicable Foreign Subsidiary Borrower)
(with a copy to the Administrative Agent) at least five Business Days before
each date on which interest is payable for the relevant Foreign Currency Loan,
and such additional interest so notified by such Lender
41
shall be payable to the Administrative Agent for the account of such Lender on
each date on which interest is payable for such Foreign Currency Loan.
(b) If the cost to any Lender of making or maintaining any Loan to
either Foreign Subsidiary Borrower is increased (or the amount of any sum
received or receivable by any Lender (or its applicable lending office) is
reduced) by an amount deemed in good faith by such Lender to be material, by
reason of the fact that the applicable Foreign Subsidiary Borrower is
incorporated in, or conducts business in, a jurisdiction outside the United
States, such Foreign Subsidiary Borrower shall indemnify such Lender for such
increased cost or reduction. A certificate of a Lender setting forth the amount
or amounts necessary to indemnify such Lender as specified in this paragraph
shall be delivered to the Parent (on behalf of the applicable Foreign Subsidiary
Borrower) and shall (if made on a reasonable and nondiscriminatory basis) be
conclusive absent manifest error. The applicable Foreign Subsidiary Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof by the Parent.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.1. Documentary Conditions Precedent. The execution and
delivery of this Agreement by the Lenders, the Administrative Agent, the
Swingline Bank and the Issuing Bank are subject to the condition precedent that
the Administrative Agent shall have received not later than December 1, 2005
each of the following, in form and substance satisfactory to the Administrative
Agent and its counsel:
(a) if requested by any Lender prior to such date, a duly executed
Syndicated Loan Note of the Parent, MWC and
Luxury, payable in each case to such Lender;
(b) the Authorization Letter, duly executed by the Borrowers;
(c) the Parent Guarantee, duly executed by the Parent; and the Initial
Subsidiary Guarantees, duly executed by the Initial Subsidiary Guarantors;
(d) a certificate of the Secretary or Assistant Secretary of the
Parent, dated the Closing Date, attesting (i) to all corporate action taken by
the Parent, including resolutions of its Board of Directors, authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement; (ii)
to a true and complete copy of its certificate of incorporation and by-laws;
(iii) to the names and true signatures of officers of the Parent authorized to
sign the Facility Documents to which it is a party and the other documents to be
delivered by the Parent under this Agreement and (iv) to the good standing of
the Parent in the State of New York, which shall be evidenced by a certificate
of the appropriate Governmental Authority thereof;
(e) a certificate of the Secretary (or equivalent officer) of MWC,
dated the Closing Date, attesting (i) to all corporate action taken by MWC,
including resolutions of its shareholders and its Board of Directors,
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement; (ii) to a true and complete copy of its organizational documents; and
(iii) to the
42
names and true signatures of officers of MWC authorized to sign the Facility
Documents to which it is a party and the other documents to be delivered by MWC
under this Agreement;
(f) a certificate of the Secretary (or equivalent officer) of Luxury,
dated the Closing Date, attesting (i) to all corporate action taken by Luxury,
including resolutions of its shareholders and its Board of Directors,
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement; (ii) to a true and complete copy of its organizational documents; and
(iii) to the names and true signatures of officers of Luxury authorized to sign
the Facility Documents to which it is a party and the other documents to be
delivered by Luxury under this Agreement;
(g) a certificate of the Secretary or Assistant Secretary of each
Initial Subsidiary Guarantor dated the Closing Date, attesting (i) to all
corporate action taken by such Initial Subsidiary Guarantor, including
resolutions of its Board of Directors and consents of its members, authorizing
the execution, delivery and performance of its Initial Subsidiary Guarantee;
(ii) to a true and complete copy of its certificate of incorporation and by-laws
or certificate of formation and operating agreement (as applicable); (iii) to
the names and true signatures of the officers of such Initial Subsidiary
Guarantor authorized to sign its Initial Subsidiary Guarantee and (iv) to the
good standing of such Subsidiary in the state of its organization, which shall
be evidenced by a certificate of the appropriate Governmental Authority thereof;
(h) a certificate of each of the Parent, MWC and Luxury, dated the
Closing Date, stating that the representations and warranties in Article 6 are
true and correct on such date as though made on and as of such date and that no
event has occurred and is continuing which constitutes a Default or an Event of
Default;
(i) opinions of domestic counsel for the Parent, the Foreign
Subsidiary Borrowers and the Initial Subsidiary Guarantors (Xxxxxxx X. Xxxxxx,
Esq. and Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP), dated the Closing Date,
in substantially the forms of Exhibit C-1 and Exhibit C-2 (respectively) and as
to such other matters as the Administrative Agent, any Lender, the Swingline
Bank or the Issuing Bank may reasonably request;
(j) an opinion of Swiss counsel for the Foreign Subsidiary Borrowers,
dated the Closing Date, in substantially the form of Exhibit C-3 and as to such
other matters as the Administrative Agent or any Lender may reasonably request;
(k) evidence that the Parent has paid in full (i) all fees that are
required to be paid by the Parent to the Lenders on the Closing Date; and (ii)
the reasonable and documented fees and disbursements of New York and Swiss
counsel for the Administrative Agent in connection with the closing of the
transaction contemplated by this Agreement;
(l) evidence that (i) the Borrowers have paid in full all amounts
owing under the Credit Agreement dated as of June 17, 2003 among the Parent,
Concord Watch Company, S.A., MWC, the lenders party thereto and JPMCB, as
administrative agent, swingline bank and issuing bank, (ii) all commitments of
such lenders thereunder have terminated and (iii) all letters
43
of credit issued thereunder have been terminated, replaced or continued under
this Agreement; and
(m) such other approvals, opinions, certificates and documents as the
Administrative Agent may reasonably request.
Section 5.2. Additional Conditions Precedent. The obligations of the
Lenders to make any Syndicated Loans pursuant to a Borrowing which increases the
amount of Syndicated Loans outstanding hereunder (including the initial
Borrowing), and of the Swingline Bank to make any Swingline Loan (including the
initial Borrowing), and of the Issuing Bank to issue, amend, renew or extend any
Letter of Credit hereunder, shall be subject to the further conditions precedent
that on the date of such Syndicated Loans or such Swingline Loan or such
issuance, amendment, renewal or extension of such Letter of Credit (as the case
may be), the following statements shall be true:
(a) the representations and warranties contained in Article 6 are true
and correct in all material respects on and as of the date such Syndicated Loans
are made or such Swingline Loan is made or such Letter of Credit is issued,
amended, renewed or extended (as the case may be) as though made on and as of
such date, provided that (i) any representation and warranty contained in
Section 6.5 that specifically relates to January 31, 2005 (other than the last
sentence of Section 6.5) shall be true and correct as of January 31, 2005; and
(ii) any such representation or warranty which by its terms contains a
materiality qualification is true and correct in all respects on and as of such
date; and
(b) no Default or Event of Default has occurred and is continuing, or
would result from such Syndicated Loans or such Swingline Loans or the issuance,
amendment, renewal or extension of such Letter of Credit.
Section 5.3. Deemed Representations. Each Borrowing Request and each
acceptance by the applicable Borrower of the proceeds of such Borrowing, and
each request by the Parent for the issuance, amendment, renewal or extension of
a Letter of Credit and each issuance, amendment, renewal or extension of a
Letter of Credit, shall constitute a representation and warranty by the
Borrowers that the statements contained in Section 5.2 are true and correct both
on the date of such Borrowing Request or request with respect to a Letter of
Credit and, unless the Parent otherwise notifies the Administrative Agent prior
to such Borrowing or such issuance, amendment, renewal or extension, as of the
date of such Borrowing or such issuance, amendment, renewal or extension.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers hereby represents and warrants as follows (provided,
however, that such representations and warranties by each Foreign Subsidiary
Borrower shall be as to such Foreign Subsidiary Borrower and its Subsidiaries
only):
Section 6.1. Incorporation, Good Standing and Due Qualification. Each
of the Parent and its Subsidiaries is duly incorporated or formed, validly
existing and (where such concept exists) in good standing under the laws of the
jurisdiction of its incorporation or organization, has the corporate, limited
liability company or other power and authority to own its
44
assets and to transact the business in which it is now engaged, and is duly
qualified as a foreign corporation, limited liability company or partnership and
in good standing under the laws of each other jurisdiction in which the failure
to be so qualified would have a material adverse effect on the business,
financial condition or operations of the Parent and its Subsidiaries taken as a
whole.
Section 6.2. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by each of the Borrowers and each Guarantor
of the Facility Documents to which it is a party are within its corporate,
limited liability company or other power and authority and have been duly
authorized by all necessary corporate, limited liability company or other action
and do not and will not: (a) require any consent or approval of its stockholders
or members; (b) contravene any of its organizational documents; (c) violate any
provision of, or require any filing, registration, consent or approval under,
any law, rule, regulation (including, without limitation, Regulation U), order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to the Parent or any Subsidiaries or Affiliates of the
Parent; (d) result in a breach of or constitute a default or require any consent
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or Guarantor is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties now owned
or hereafter acquired by any Borrower or Guarantor; or (f) cause the Parent (or
any Subsidiary or Affiliate of the Parent, as the case may be) to be in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
Section 6.3. Legally Enforceable Agreements. Each Facility Document to
which any Borrower or Guarantor is a party is a legal, valid and binding
obligation of such Borrower or Guarantor (as the case may be) enforceable
against such Borrower or Guarantor (as the case may be) in accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law).
Section 6.4. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of any Borrower, threatened, against or affecting
the Parent or any of its Subsidiaries before any court, governmental agency or
arbitrator, as to which there is a reasonable possibility of determination
adverse to the Parent or such Subsidiary and which (if determined adversely to
the Parent or such Subsidiary) would, in any one case or in the aggregate,
materially adversely affect the financial condition, operations or business of
the Parent and its Subsidiaries taken as a whole or the ability of any Borrower
or any Guarantor to perform its obligations under the Facility Documents to
which it is a party.
Section 6.5. Financial Statements. The consolidated and consolidating
balance sheet of the Parent and its Consolidated Subsidiaries as at January 31,
2005, and the related consolidated income statement and statements of cash flows
and changes in stockholders' equity and the related consolidating income
statement of the Parent and its Consolidated Subsidiaries for the fiscal year
then ended, and the accompanying footnotes, together with the accompanying
opinion of PricewaterhouseCoopers LLP, independent certified public accountants,
copies of which have been furnished or made available to each of the Lenders,
are complete and correct in
45
all material respects and fairly present the financial condition of the Parent
and its Consolidated Subsidiaries as at such date and the results of the
operations of the Parent and its Consolidated Subsidiaries for the period
covered by such statements, all in accordance with GAAP consistently applied.
There are no liabilities of the Parent or any of its Consolidated Subsidiaries,
fixed or contingent, which are material in relation to the consolidated
financial condition of the Parent but are not reflected in the financial
statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since January 31, 2005. No information, exhibit or
report furnished by any Borrower to the Administrative Agent or any of the
Lenders in connection with the negotiation of this Agreement, when read together
with the financial statements referred to in this Section, contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
Since January 31, 2005, there has been no material adverse change in the
condition (financial or otherwise), business or operations of the Parent and the
Consolidated Subsidiaries taken as a whole.
Section 6.6. Ownership and Liens. Each of the Parent and its
Consolidated Subsidiaries has title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Section 6.5 (other than any properties or assets disposed of in the
ordinary course of business, and other than properties and assets that are not
material to the Parent and its Subsidiaries taken as a whole and other than any
other sales that are permitted by this Agreement), and none of the properties
and assets owned by the Parent or any of its Subsidiaries and none of its
leasehold interests is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder.
Section 6.7. Taxes. Each of the Parent and its Subsidiaries has filed
or has caused to be filed all tax returns (foreign, federal, state and local)
required to be filed and has paid all material taxes, assessments and
governmental charges and levies shown thereon to be due, including interest and
penalties, except for such taxes and other amounts as are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP and reflected on the consolidated balance
sheet of the Parent.
Section 6.8. ERISA. (a) No accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No liability
to the PBGC has been or is expected by the Parent or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Parent, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole. Neither the Parent, nor any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, financial condition or
operations of the Parent and its Subsidiaries taken as a whole.
(b) Neither the Parent nor any of its Subsidiaries has breached the
fiduciary rules of ERISA or engaged in any prohibited transaction in connection
with which the Parent or any of its Subsidiaries or ERISA Affiliates could be
subjected to (in the case of any such breach)
46
a suit for damages or (in the case of any such prohibited transactions) with a
civil penalty assessed under Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, which suit, penalty or tax, in any case, would be materially
adverse to the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole.
(c) There has been no reportable event (within the meaning of Section
4043(b) of ERISA) or any other event or condition with respect to any Plan
(other than a Multiemployer Plan) which presents a risk of termination of any
such Plan by the PBGC under circumstances which in any case could result in
liability which would be materially adverse to the business, financial condition
or operations of the Parent and its Subsidiaries taken as a whole.
(d) The present value of all vested accrued benefits under all Plans
(other than Multiemployer Plans), determined as of the end of the Parent's most
recently ended fiscal year on the basis of reasonable actuarial assumptions, did
not exceed the current value of the assets of such Plans allocable to such
vested accrued benefits by more than $20,000,000. The terms "present value",
"current value", and "accrued benefit" have the meanings specified in Section 3
of ERISA.
(e) Neither the Parent nor any of its Subsidiaries is or has ever been
obligated to contribute to any Multiemployer Plan.
Section 6.9. Subsidiaries and Ownership of Stock. Schedule III is a
complete and accurate list, as of the Closing Date, of the Subsidiaries of the
Parent, showing the jurisdiction of incorporation or organization of each
Subsidiary and showing the percentage of the Parent's ownership of the
outstanding stock or other interest of each such Subsidiary. All of the
outstanding capital stock or other interest of each such Subsidiary has been
validly issued, is fully paid and nonassessable and (to the extent owned by the
Parent or any other Subsidiary) is owned by the Parent or such other Subsidiary,
as the case may be, free and clear of all Liens.
Section 6.10. Credit Arrangements. Schedule IV is a complete and
correct list, as of the Closing Date, of all credit agreements, indentures,
purchase agreements, guaranties, Capital Leases and other investments,
agreements and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing or for credit lines extended for
the purchase of foreign-exchange contracts) in respect of which the Parent or
any of its Subsidiaries is in any manner directly or contingently obligated to
pay money (excluding trade payables in the ordinary course of business, and
excluding other extensions of credit that do not exceed $500,000 in the
aggregate of all such other extensions of credit), including all modifications
thereof and amendments thereto; and the maximum principal or face amounts of the
credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens (if any) of any nature given or agreed to be given as
security therefor are correctly described or indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Parent and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, necessary in any material respect
to conduct the business substantially as now
47
conducted of the Parent and its Subsidiaries taken as a whole, and neither the
Parent nor any of its Subsidiaries is in violation of any valid rights of others
with respect to any of the foregoing.
Section 6.12. Hazardous Materials. The Parent and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not have a material adverse
effect on the consolidated financial condition, operations or business of the
Parent and its Consolidated Subsidiaries taken as a whole. The Parent and each
of its Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not have a material adverse effect
on the consolidated financial condition, operations or business of the Parent
and its Consolidated Subsidiaries taken as a whole.
In addition, except as set forth in Schedule V and except to the
extent it would not have a material adverse effect on the consolidated financial
condition, operations or business of the Parent and its Consolidated
Subsidiaries taken as a whole:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and, to the best of the Parent's knowledge, no
investigation or review is pending or threatened by any governmental or other
entity with respect to any alleged failure by the Parent or any of its
Subsidiaries to have any permit, license or authorization required under the
Environmental Laws in connection with the conduct of the business of the Parent
or any of its Subsidiaries or with respect to any generation, treatment,
storage, recycling, transportation, release or disposal, or any release as
defined in 42 U.S.C. Section 9601(22) ("Release"), of any substance regulated
under Environmental Laws ("Hazardous Materials") generated by the Parent or any
of its Subsidiaries.
(b) Neither the Parent nor any of its Subsidiaries has handled any
Hazardous Material, other than as a generator, on any property now or previously
owned or leased by the Parent or any of its Subsidiaries; and
(i) no polychlorinated biphenyl is present at any property now or
owned or leased by the Parent or any of its Subsidiaries;
(ii) no asbestos is present at any property now owned or leased by the
Parent or any of its Subsidiaries;
(iii) there are no underground storage tanks for Hazardous Materials,
active or abandoned, at any property now owned or leased by the Parent or
any of its Subsidiaries.
No Hazardous Materials have been Released, in a reportable quantity, where such
a quantity has been established by statute, ordinance, rule, regulation or
order, at, on or under any property now owned by the Parent or any of its
Subsidiaries.
48
(c) Neither the Parent nor any of its Subsidiaries has transported or
arranged for the transportation of any Hazardous Material to any location which
is listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), listed
for possible inclusion on the National Priorities List by the Environmental
Protection Agency in the Comprehensive Environmental Response and Liability
Information System as provided by 40 C.F.R. Section 300.5 ("CERCLIS") or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which are reasonably expected to
lead to claims against the Parent or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by the Parent or any of its
Subsidiaries has been recycled, treated, stored, disposed of or Released by the
Parent or any of its Subsidiaries at any location other than those listed in
Schedule V.
(e) No oral or written notification of a Release of a Hazardous
material has been filed by or on behalf of the Parent or any of its Subsidiaries
and no property now owned or leased by the Parent or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List promulgated
pursuant to CERCLA, on CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) There are no Liens arising under or pursuant to any Environmental
laws which have been imposed on any of the real property or properties owned or
leased by the Parent or any of its Subsidiaries, and (to the best of the
Parent's knowledge) no government actions have been taken or are in process
which could subject any of such properties to such Liens and neither the Parent
nor any of its Subsidiaries would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any property owned by it in
any deed to such property.
(g) There have been no environmental investigations, studies, audits,
test, reviews or other analyses conducted by or which are in the possession of
the Parent or any of its Subsidiaries in relation to any property or facility
now or previously owned or leased by the Parent or any of its Subsidiaries which
have not been made available to the Lenders, except to the extent prepared to
satisfy routine reporting obligations under the Environmental Laws.
Section 6.13. No Default on Outstanding Judgments or Orders. Each of
the Parent and its Subsidiaries has satisfied all judgments and neither the
Parent nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other Governmental Authority, commission, board,
bureau, agency or instrumentality, domestic or foreign, except where any such
defaults in the aggregate would not result in a material adverse effect on the
business, financial condition or operations of the Parent and its Subsidiaries
taken as a whole.
Section 6.14. No Defaults on Other Agreements. Neither the Parent nor
any of its Subsidiaries is subject to any charter or corporate restriction which
is reasonably expected to have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of the
Parent or any of its Subsidiaries, or the ability of any Borrower or
49
Guarantor to carry out its obligations under the Facility Documents to which it
is a party. Neither the Parent nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument which is reasonably expected to have a material adverse effect on the
ability of any Borrower or Guarantor to carry out its obligations under the
Facility Documents to which it is a party. The Parent is not in default in any
respect under any of the Prudential Existing Notes (or under either note
agreement pursuant to which they were issued) or under any outstanding Future
Permitted Private Placement Debt (or under any note or other agreement pursuant
to which such Debt shall have been issued). Neither the Parent nor any of its
Subsidiaries is in default in any material respect under any other agreement or
instrument to which the Parent or such Subsidiary is a party, except where any
such defaults in the aggregate would not result in a material adverse effect on
the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole.
Section 6.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Parent or of any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), materially and adversely
affecting the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole.
Section 6.16. Governmental Regulation. Neither the Parent nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for money borrowed or to obtain letters of credit as
contemplated hereby.
Section 6.17. Partnerships. As of the Closing Date, neither the Parent
nor any of its Subsidiaries is a partner in any partnership.
Section 6.18. No Forfeiture. No Forfeiture Proceeding is pending.
Section 6.19. Solvency.
(a) The present fair saleable value of the assets of each Borrower
after giving effect to all the transactions contemplated by the Facility
Documents and the funding of all Revolving Credit Commitments hereunder exceeds
the amount that will be required to be paid on or in respect of the existing
debts and other liabilities (including contingent liabilities) of such Borrower
as they mature.
(b) The property of each Borrower does not constitute unreasonably
small capital for such Borrower to carry out its business as now conducted and
as presently proposed to be conducted including the capital needs of such
Borrower.
(c) No Borrower intends to, nor does any Borrower believe that it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by such Borrower, and
of amounts to be payable on or in respect of debt of such Borrower). The cash
available to each Borrower after taking into account all
50
other anticipated uses of the cash of such Borrower, is anticipated to be
sufficient to pay all such amounts on or in respect of debt of such Borrower
when such amounts are required to be paid.
(d) No Borrower believes that final judgments against it in actions
for money damages will be rendered at a time when, or in an amount such that,
such Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to each Borrower after
taking into account all other anticipated uses of the cash of such Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
Section 6.20. Certain Particular Assurances as to the Foreign
Subsidiary Borrowers. (a) This Agreement and each of the other Facility
Documents to which a Foreign Subsidiary Borrower is intended to be a party are
in proper legal form under the law of Switzerland for the enforcement thereof
against such Foreign Subsidiary Borrower under such law. All formalities
required in Switzerland for the validity and enforceability of this Agreement
and each of such other Facility Documents (including, without limitation, any
necessary registration, recording or filing with any court or other authority in
Switzerland) have been accomplished, and no Taxes are required to be paid to
Switzerland, or any political subdivision thereof or therein, and no
notarization is required, for the validity and enforceability hereof or thereof.
(b) This Agreement and the other Facility Documents to which a Foreign
Subsidiary Borrower is intended to be a party and the obligations evidenced
hereby and thereby are and will at all times be direct and unconditional general
obligations of such Foreign Subsidiary Borrower, and rank and will at all times
rank in right of payment and otherwise at least pari passu with all other
unsecured Debt of such Foreign Subsidiary Borrower whether now existing or
hereafter outstanding, except for such preferences as are provided by any
mandatory applicable provision of law. There exists no Lien (including any Lien
arising out of any attachment, judgment or execution), nor any segregation or
other preferential arrangement of any kind, on, in or with respect to any of the
property or revenues of any Foreign Subsidiary Borrower or any of its
Subsidiaries, except as expressly permitted by Section 8.3.
(c) Each Foreign Subsidiary Borrower is subject to civil and
commercial law with respect to its obligations under this Agreement and each of
the other Facility Documents to which it is intended to be a party. The
execution, delivery and performance by each Foreign Subsidiary Borrower of this
Agreement and each of such other Facility Documents constitute private and
commercial acts rather than public or governmental acts. No Foreign Subsidiary
Borrower, nor any of its properties or revenues, is entitled to any right of
immunity in any jurisdiction from suit, court jurisdiction, judgment, attachment
(whether before or after judgment), set-off or execution of a judgment or from
any other legal process or remedy relating to the obligations of such Foreign
Subsidiary Borrower under this Agreement or any of such other Facility
Documents.
51
(d) The inclusion in this Article of the representations and
warranties contained in this Section shall not limit the generality of the other
representations and warranties contained in this Article with reference to the
Foreign Subsidiary Borrowers.
ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid, or any Letter of
Credit shall remain outstanding, or any Lender shall have any Revolving Credit
Commitment under this Agreement, the Parent shall:
Section 7.1. Maintenance of Existence. Preserve and maintain (except
as otherwise permitted by Section 8.7 or Section 8.8 or Section 8.10), and cause
each of its Subsidiaries (other than Inactive Subsidiaries) to preserve and
maintain (except as otherwise permitted by Section 8.7 or Section 8.8 or Section
8.10), its corporate, limited liability company or other existence and good
standing in the jurisdiction of its incorporation or organization, and qualify
and remain qualified, and cause each of its Subsidiaries to qualify and remain
qualified, as a foreign corporation, limited liability company or other entity
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on (a) the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole; (b) the ability of any
Borrower or any Guarantor to perform any of its obligations under any Facility
Document; (c) the legality, validity or enforceability of any Facility Document;
or (d) the rights of, or remedies available to the Administrative Agent and the
Lenders under any Facility Document.
Section 7.2. Conduct of Business. Continue, and cause each of its
Subsidiaries (other than Inactive Subsidiaries) to continue, to engage primarily
in the Core Business.
Section 7.3. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of the
properties (tangible and intangible) necessary or useful in the proper conduct
of the business of the Parent and its Subsidiaries in good working order and
condition (ordinary wear and tear excepted), except to the extent that such
properties are not material to the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole.
Section 7.4. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, in which complete
entries will be made in compliance with then-current guidelines as to generally
accepted accounting principles, reflecting all financial transactions of the
Parent and its Subsidiaries.
Section 7.5. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof.
Section 7.6. Compliance with Laws; Payment of Taxes. (a) Comply, and
cause each of its Subsidiaries to comply, with all applicable laws (including
all Environmental Laws), rules, regulations and orders, the noncompliance with
which would materially adversely
52
affect (i) the business, financial condition or operations of the Parent and its
Subsidiaries taken as a whole, (ii) the ability of any Borrower or any Guarantor
to perform any of its obligations under any Facility Document, (iii) the
legality, validity or enforceability of any Facility Document, or (iv) the
rights of or remedies available to the Administrative Agent and the Lenders
under any Facility Document. Without limiting the generality of the foregoing,
the Parent shall cause each Foreign Subsidiary Borrower to obtain and maintain
at all times in effect all such governmental licenses, authorizations, consents,
permits and approvals as may be required for such Foreign Subsidiary Borrower to
borrow and repay the Borrowings of such Foreign Subsidiary Borrower and to
comply with all the other obligations of such Foreign Subsidiary Borrower under
this Agreement and the other Facility Documents to which such Foreign Subsidiary
Borrower is a party; and
(b) Pay or discharge, and cause each of its Subsidiaries to pay or
discharge, before the same become delinquent all taxes, assessments and
governmental charges imposed upon the Parent or any Subsidiary or any of their
respective properties; provided, however, that the Parent shall not be required
to pay or discharge or cause to be paid or discharged, any such tax, assessment
or governmental charge the applicability or validity of which is being contested
by the Parent or such Subsidiary in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP.
Section 7.7. Right of Inspection. At any reasonable time and from time
to time and upon reasonable prior notice, permit the Administrative Agent or any
Lender or any agent or representative thereof, to examine and make copies and
abstracts from the records and books of account of, and visit the properties of,
the Parent and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Parent and any such Subsidiary with any of their respective
officers and directors and the Parent's independent accountants so long as the
Parent is afforded an opportunity to be present during such discussions with
such accountants; provided that each such visit or discussion shall be at the
sole expense of the Administrative Agent or any Lender, as applicable, unless a
Default or an Event of Default shall have occurred and be continuing at the time
thereof in which case the reasonable and documented expenses of the
Administrative Agent or any Lender, as applicable, in connection thereof shall
be paid or reimbursed by the Parent.
Section 7.8. Reporting Requirements. Furnish directly to each of the
Lenders:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Parent, a consolidated and consolidating balance
sheet of the Parent and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statements of cash flows and
changes in stockholders' equity and a consolidating income statement of the
Parent and its Consolidated Subsidiaries for such fiscal year, all in reasonable
detail and stating in comparative form the respective consolidated and
consolidating figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with GAAP and as to the consolidated
statements audited and accompanied by an opinion thereon by
PricewaterhouseCoopers LLP or other independent accountants of national standing
selected by the Parent and acceptable to the Required Lenders (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material
53
respects the financial condition and results of operations of the Parent and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) as soon as available and in any event within 75 days after the end
of each of the first three quarters of each fiscal year of the Parent, a
consolidated and consolidating balance sheet of the Parent and its Consolidated
Subsidiaries as of the end of such quarter and a consolidated income statement
and statements of cash flows and changes in stockholders' equity and a
consolidating income statement of the Parent and its Consolidated Subsidiaries
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, all in reasonable detail and stating in comparative
form the respective consolidated and consolidating figures for the corresponding
date and period in the previous fiscal year and all prepared in accordance with
GAAP and certified by the chief financial officer of the Parent (subject to
year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to above, a certificate of the chief financial officer of the Parent
(i) certifying that to the best of his knowledge no Default or Event of Default
has occurred and is continuing or, if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with computations
demonstrating whether there has been compliance with the covenants contained in
Article 9, and with the financial covenants contained in the agreements between
the Parent and The Prudential Insurance Company of America pursuant to which the
Prudential Existing Notes and (if applicable) the Prudential Shelf Notes have
been issued, and with the financial covenants contained in the agreements
pursuant to which all other Future Permitted Private Placement Debt shall have
been issued;
(d) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, affecting the
Parent or any of its Subsidiaries which would reasonably be expected to have a
material adverse effect on (i) the business, financial condition or operations
of the Parent and its Subsidiaries taken as a whole, (ii) the ability of any
Borrower or any Guarantor to perform any of its obligations under any Facility
Document, (iii) the legality, validity or enforceability of any Facility
Document, or (iv) the rights of or remedies available to the Administrative
Agent and the Lenders under any Facility Document;
(e) as soon as possible and in any event within 10 days after the
occurrence of each Default or Event of Default a written notice setting forth
the details of such Default or Event of Default and the action which is proposed
to be taken by the Parent with respect thereto;
(f) as soon as possible, and in any event within ten days after the
Parent receives notice from the PBGC or any other Person, or otherwise acquires
knowledge, that any of the events or conditions specified below with respect to
any Plan or Multiemployer Plan have occurred or exist, a statement signed by a
senior financial officer of the Parent setting forth details respecting such
event or condition and the action, if any, which the Parent or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Parent or an ERISA
Affiliate with respect to such event or condition):
54
(i) any reportable event, as defined in Section 4043(b) of ERISA, with
respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302 of ERISA
including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance of
any waivers in accordance with Section 412(d) of the Code) and any request
for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by the Parent or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Parent or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by
the Parent or any ERISA Affiliate that results in liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt of the Parent
or any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or
that it intends to terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Parent or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to a
notification letter from the Internal Revenue Service under Section
401(a)(29) of the Code or Section 307 of ERISA would result in the loss of
tax-exempt status of the trust of which such Plan is a part if the Parent
or an ERISA Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;
(vii) any event or circumstance exists which may reasonably be
expected to constitute grounds for the Parent or any ERISA Affiliate to
incur liability under Title IV of ERISA or under Sections 412(c)(11) or
412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of one or more Plans increase
after the date of this Agreement in an amount which is material in relation
to the financial condition of the Parent.
(g) promptly after the request of any Lender, copies of each annual
report filed pursuant to Section 104 of ERISA with respect to each Plan
(including, to the extent
55
required by Section 104 of ERISA, the related financial and actuarial statements
and opinions and other supporting statements, certifications, schedules and
information referred to in Section 103) and each annual report filed with
respect to each Plan under Section 4065 of ERISA; provided, however, that in the
case of a Multiemployer Plan, such annual reports shall be furnished only if
they are available to the Parent or an ERISA Affiliate;
(h) upon the request of the Administrative Agent, promptly after the
furnishing thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
any other clause of this Section;
(i) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Parent or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which the Parent or any such
Subsidiary files with the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or with any national securities
exchange;
(j) promptly after the commencement thereof or promptly after the
Parent knows of the commencement or threat thereof, notice of any Forfeiture
Proceeding; and
(k) such other information respecting the condition or operations,
financial or otherwise, of the Parent or any of its Subsidiaries as the
Administrative Agent or any Lender may from time to time reasonably request.
Section 7.9. Subsidiary Guarantee. Cause:
(a) each domestic Subsidiary of the Parent whose assets at any time
represent (10% or more of the total assets of the Parent and its Consolidated
Subsidiaries, and
(b) each domestic Subsidiary of the Parent that owns any trademark,
tradename, tradedress or patent as a result of a transfer thereof by the Parent
or any of its Subsidiaries to such domestic Subsidiary, and
(c) each other domestic Subsidiary of the Parent, other than domestic
Subsidiaries whose combined assets represent less than 15% of the total assets
of the Parent and its Consolidated Subsidiaries,
to execute and deliver to the Administrative Agent a Subsidiary Guarantee,
together with written evidence satisfactory to the Administrative Agent that
such Subsidiary Guarantee has been duly authorized by all necessary action; the
same shall be delivered to the Administrative Agent (in multiple duplicate
original copies, one for each Lender, the Swingline Bank, the Issuing Bank and
the Administrative Agent) within 30 days after the date on which (in the case of
clause (a)) the assets of such Subsidiary first represent 10% or more of the
total assets of the Parent and its Consolidated Subsidiaries, or (in the case of
clause (b)) such Subsidiary acquires ownership of such trademark, tradename,
tradedress or patent, or (in the case of clause (c)) the 15% limit described in
clause (c) is exceeded.
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Section 7.10. Equal and Ratable Lien. Make or cause to be made, if any
property (whether now owned or hereafter acquired) is subjected to a Lien in
violation of Section 8.3, effective provision reasonably satisfactory in form
and substance to the Required Lenders whereby the obligations of the Borrowers
under this Agreement and the Notes will be secured by such Lien equally and
ratably with any and all other liabilities secured thereby. Such violation of
Section 8.3 shall be an Event of Default, whether or not any such provision is
made pursuant to this Section.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid, or any Letter of
Credit shall be outstanding, or any Lender shall have any Revolving Credit
Commitment under this Agreement, the Parent shall not:
Section 8.1. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist any Debt,
except:
(a) Debt of each Borrower under this Agreement, the other Facility
Documents (including, for the avoidance of doubt, any increase under Section
2.16) and the Other Credit Agreement;
(b) Debt described in Schedule IV (including the Prudential Shelf
Notes), including renewals, extensions or refinancings thereof (and including
refinancings by institutions other than those institutions identified on
Schedule IV), provided that the principal amount thereof does not increase;
(c) Debt of the Parent subordinated (on terms satisfactory to the
Administrative Agent and the Required Lenders) to the Parent's obligations under
this Agreement and the other Facility Documents;
(d) Debt of the Parent to any Subsidiary; and Debt of any Subsidiary
to the Parent or to another Subsidiary, provided that the aggregate amount at
any time outstanding of all Debt of Subsidiaries to the Parent or to other
Subsidiaries does not exceed 20% of the Consolidated Tangible Net Worth at the
time of determination;
(e) Debt consisting of leases permitted under Section 8.4 or of
guaranties permitted under subsections (a), (b), (c), (d) and (g) of Section
8.2;
(f) Future Permitted Private Placement Debt; and
(g) other Debt of the Parent or any Subsidiary of the Parent, provided
that (i) the aggregate amount of such Debt outstanding at any time shall not
exceed $25,000,000 (as to all of the Parent and its Subsidiaries) and (ii) the
aggregate amount of liability in respect of letters of credit (excluding Letters
of Credit issued under this Agreement) outstanding at any time shall not exceed
$10,000,000 (as to all of the Parent and its Subsidiaries) (which liability
shall include liability for outstanding letters of credit that have not been
drawn upon, as well as outstanding reimbursement obligations as to letters of
credit that have been drawn upon; and
57
which $10,000,000 limitation shall be inclusive of the letters of credit
identified in Schedule IV and renewals and extensions thereof).
Section 8.2. Guaranties, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except
(a) guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(b) guaranties by Subsidiaries pursuant to Section 7.9, the Parent
Guarantee and the guaranty of the Parent in respect of obligations under the
Other Credit Agreement;
(c) guaranties by the Parent of ordinary rent obligations incurred by
any of its Subsidiaries for the lease of retail stores; provided, however, that
the aggregate of the amount so guaranteed for foreign Subsidiaries shall not
exceed $5,000,000 at any time;
(d) guaranties by the Parent of obligations incurred by any of its
domestic Subsidiaries in the ordinary course of business other than for borrowed
money, letters of credit or acceptance financing;
(e) guaranties by the Parent in favor of any of its Subsidiaries, and
guaranties by any Subsidiary of the Parent in favor of the Parent or another
Subsidiary of the Parent, as to obligations owing to the guaranteed party by a
Subsidiary of the Parent or by the Parent; provided, however, that in no event
shall the outstanding guaranty liability permitted by this clause (e) exceed at
any time $20,000,000 as to the Parent and its Subsidiaries in the aggregate;
(f) letters of credit permitted under Section 8.1 (including Letters
of Credit issued hereunder);
(g) guaranties by the Subsidiary Guarantors of the Prudential Existing
Notes and any Future Permitted Private Placement Debt including renewals,
extensions or refinancings thereof; and
(h) other guaranties, provided, however, that in no event shall the
outstanding guaranty liability permitted by this clause (h) exceed at any time
$2,000,000 as to the Parent and its Subsidiaries in the aggregate.
Section 8.3. Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired (including, without limitation, any Lien upon any stock or other
securities issued by a Subsidiary), except:
58
(a) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(b) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(c) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to amounts on deposit in one or more bank accounts
maintained by the Parent and its Subsidiaries, in each case granted in the
ordinary course of business in favor of one or more banks or other depositary
institutions with which such accounts are maintained; provided that such Liens
shall not secure the repayment of any Debt for borrowed money;
(d) Liens under workmen's compensation, unemployment insurance, social
security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) judgment and other similar Liens arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Parent or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of any Subsidiary to the Parent;
(i) purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease; provided that:
(i) any property subject to any of the foregoing is acquired by the
Parent or any such Subsidiary in the ordinary course of its business and
the Lien on any such property is created contemporaneously with such
acquisition;
(ii) the obligation secured by any Lien so created, assumed or
existing shall not exceed 95% of the lesser of cost or fair market value as
59
of the time of acquisition of the property covered thereby to the Parent or
such Subsidiary acquiring the same;
(iii) each such Lien shall attach only to the property so acquired and
fixed improvements thereon, attachments thereto and proceeds thereof; and
(iv) the related expenditure is permitted under Section 9.3;
(j) Liens identified on Schedule IV, including renewals, extensions or
refinancings thereof (and including refinancings by institutions other than
those institutions identified on Schedule IV), provided that the principal
amount secured by such Liens does not increase;
(k) other Liens, provided that in no event shall the outstanding
liabilities secured by Liens permitted by this clause (k) exceed at any time
$2,000,000 as to the Parent and its Subsidiaries in the aggregate.
Section 8.4. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except:
(a) leases existing on the date of this Agreement and any extensions
or renewals thereof;
(b) Capital Leases permitted by Sections 8.1 and 8.3; and
(c) other leases (excluding Capital Leases) that are, in the judgment
of the management of the Parent, appropriate for the business objectives of the
Parent and its Subsidiaries.
Section 8.5. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, or
permit any such Subsidiary to purchase or otherwise acquire, any capital stock,
assets (except as otherwise permitted by this Agreement), obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person, except:
(a) direct obligations of the United States of America or any agency
thereof with maturities of two years or less from the date of acquisition;
(b) commercial paper of a domestic issuer rated at least "A-1" by S&P
or "P1" by Xxxxx'x;
(c) certificates of deposit and time deposits with maturities of one
year or less from the date of acquisition issued by any commercial bank whose
(or whose parent company's) short-term commercial paper rating is rated at least
"A-1" by S&P or "P-1" by Xxxxx'x.;
60
(d) for stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the Parent or any
such Subsidiary;
(e) inventory purchased in the ordinary course of business of the
Parent or such Subsidiary;
(f) any Acquisition permitted by Section 8.11;
(g) investments in shares of investment companies registered under the
Investment Company Act of 1940 which are no-load money-market funds and which
invest primarily in obligations of the type described in clauses (a), (b) and
(c) of this Section and which are classified as current assets in accordance
with GAAP, provided that any such investment company shall have an aggregate net
asset value of not less than $50,000,000;
(h) advances to employees of the Parent or any of its Subsidiaries
that do not exceed $500,000 outstanding at any time in the aggregate as to all
such employees of the Parent and its Subsidiaries;
(i) loans and advances permitted by Section 8.1(d), other investments
by any foreign Subsidiary of the Parent in any other foreign Subsidiary of the
Parent that is wholly owned by the Parent and other investments by the Parent or
any Subsidiary of the Parent in any other Subsidiary of the Parent;
(j) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(k) other investments of up to $15,000,000 in the aggregate as to all
of the Parent and its Subsidiaries;
(l) as permitted under Sections 8.7(c), 8.7(d) and 8.7(e);
(m) Permitted Investments made by the Administrative Agent for the
account of the Parent or a Foreign Subsidiary Borrower pursuant to Section
2.13(f); and
(n) taxable or tax-exempt municipal securities that have an
established secondary market, asset-backed securities and/or corporate bonds, in
each case which are rated "A2" or better by Xxxxx'x or "A" or better by S&P.
Section 8.6. Dividends. Declare or pay any dividends (other than
dividends payable solely in shares of its common stock), purchase, redeem,
retire or otherwise acquire for value any of its capital stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such
whether in cash, assets or in obligations of the Parent, or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption or retirement of any shares of its capital
stock, or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock, or permit any of its Subsidiaries to
do any of the foregoing, or permit any of its Subsidiaries to purchase or
otherwise acquire for value any stock of the Parent or another such Subsidiary
61
(except as permitted by Section 8.8(b)), except that the Parent may pay
dividends or acquire its stock (or both), provided that:
(x) no Default or Event of Default exists either immediately prior to
such payment or acquisition, or after giving effect to such payment or
acquisition; and
(y) the aggregate amount expended by the Parent after January 31, 2005
for all such dividends and acquisitions does not exceed the sum of (i)
$75,000,000, plus (ii) 50% of the cumulative net income of the Parent for
its fiscal year ending January 31, 2006 and each subsequent fiscal year
that shall have ended prior to the payment of such dividend or the
acquisition of such stock (which net income for any year shall be adjusted
to exclude non-recurring gains, except to the extent that the Parent shall
have received actual cash representing such gain in such year), less (iii)
100% of the cumulative net loss (if any) of the Parent for its fiscal year
ending January 31, 2006 and each subsequent fiscal year that shall have
ended prior to the payment of such dividend or the acquisition of such
stock.
and except that any Subsidiary may pay dividends or make distributions to the
Parent and to any Subsidiary of the Parent.
Section 8.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests), except:
(a) for inventory disposed of in the ordinary course of business;
(b) the sale or other disposition of assets no longer used or useful
in the conduct of its business;
(c) that any such Subsidiary may sell, lease, assign, transfer or
otherwise dispose of its assets to the Parent, and except that any such
Subsidiary (other than a Foreign Subsidiary Borrower) may sell, lease, assign,
transfer or otherwise dispose of its assets to another Subsidiary that shall
have previously executed and delivered a Guarantee pursuant to Section 7.9, and
except that any Foreign Subsidiary Borrower may sell, lease, assign, transfer or
otherwise dispose of its assets to the other Foreign Subsidiary Borrower;
(d) that any foreign Subsidiary of the Parent (other than a Foreign
Subsidiary Borrower) may sell, lease, assign, transfer or otherwise dispose of
its assets to another foreign Subsidiary of the Parent that is wholly owned by
the Parent;
(e) as contemplated under Section 8.8(a) or (b); and
(f) for Designated Sales (provided that (i) all the outstanding shares
of each Foreign Subsidiary Borrower shall at all times be wholly owned directly
or indirectly by the Parent, (ii) no Default or Event of Default has occurred
and is continuing at the time of any such sale and (iii) after giving effect to
any such sale, the Parent shall be in pro forma compliance with the covenants in
Article 9 (and, in the case of each Designated Sale of assets exceeding a
62
fair market value of $10,000,000, the Parent shall have provided to the
Administrative Agent a certificate of the chief financial officer of the Parent
certifying to and setting forth in reasonable detail computations demonstrating
such compliance at, or immediately prior to, the time of such sale)).
In no event shall any disposition of assets by the Parent or any Subsidiary be
for less than fair market value.
Section 8.8. Stock of Subsidiaries, Etc. Sell or otherwise dispose of,
or permit any of its Subsidiaries to sell or otherwise dispose of, any shares of
capital stock of any of its Subsidiaries, except:
(a) for a sale of all or substantially all of the stock of any
Subsidiary for less than $3,000,000 where (i) the sales proceeds are made
available to the Parent and (ii) such proceeds represent the fair value of such
Subsidiary;
(b) the shares of any foreign Subsidiary of the Parent may be sold to
another foreign Subsidiary of the Parent or to the Parent, except that the
outstanding shares of each Foreign Subsidiary Borrower shall at all times be
majority-owned directly or indirectly by the Parent;
(c) the shares of any domestic Subsidiary of the Parent may be sold to
another domestic Subsidiary of the Parent and that is a Guarantor or to the
Parent; and
(d) for Designated Sales (provided, however, that all the outstanding
shares of each Foreign Subsidiary Borrower shall at all times be wholly owned
directly or indirectly by the Parent);
or permit any such Subsidiary to issue any additional shares of its capital
stock, except directors' qualifying shares and except in connection with a
transaction permitted by clause (a), (b) or (c) of this Section to the extent
necessary to effectuate such transaction; provided that, notwithstanding the
foregoing or anything in this Agreement to the contrary, the Parent may acquire
and own a majority interest in one or more entities incorporated in
jurisdictions outside of the United States of America.
Section 8.9. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service, with any Affiliate or permit any of its Subsidiaries
to enter into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with any Affiliate,
except in the ordinary course of and pursuant to the reasonable requirements of
the Parent's or such Subsidiary's business (including without limitation direct
and indirect promotional and advertising efforts of the Parent, consistent with
past practice) and upon fair and reasonable terms that are (except for loans and
advances permitted by clauses (h) and (j) of Section 8.5) no less favorable to
the Parent or such Subsidiary than would obtain in a comparable arm's length
transaction with a Person not an Affiliate, and except for (i) transactions
between the Parent and any Subsidiary or between Subsidiaries, (ii) Investments
permitted under Section 8.5, (iii) dividends or other payments permitted under
Section 8.6, (iv) any employment, compensation, indemnification, noncompetition
or confidentiality agreement or arrangement
63
entered into by the Borrowers or any of their respective Subsidiaries with their
employees or directors in the ordinary course of business and (v) transactions
listed in Schedule VI.
Section 8.10. Mergers, Etc. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or of a line of business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of its Subsidiaries to do so, except:
(a) for Acquisitions that are permitted pursuant to Section 8.11;
(b) sales of assets that are permitted pursuant to clauses (c) and (d)
of Section 8.7 and clauses (a), (b) and (c) of Section 8.8; and
(c) for Designated Sales (provided, however, that all the outstanding
shares of each Foreign Subsidiary Borrower shall at all times be wholly owned
directly or indirectly by the Parent).
Section 8.11. Acquisitions. Make any Acquisition unless:
(i) no Default or Event of Default exists either immediately prior to
such Acquisition or after giving effect to such Acquisition;
(ii) such Acquisition is approved by the board of directors of the
corporation (if any) which is the subject of such Acquisition, or is
recommended by such board to the shareholders of such corporation; and
(iii) if the principal business of the corporation or other entity
which is the subject of such Acquisition is not in the Core Business, then
the aggregate amount expended by the Parent or any Subsidiary for such
Acquisition, and for all other Acquisitions where the principal business of
the corporation or other entity which is the subject thereof is not in the
Core Business, is not more than $20,000,000.
As used herein, the term "Acquisition" means any transaction pursuant to which
the Parent or any of its Subsidiaries (a) acquires equity securities (or
warrants, options or other rights to acquire such securities) of any corporation
or other entity other than the Parent or any corporation which is not then a
Subsidiary of the Parent, pursuant to a solicitation of tenders therefor, or in
one or more negotiated block, market or other transactions not involving a
tender offer, or a combination of any of the foregoing, or (b) makes any
corporation or other entity a Subsidiary of the Parent, or causes any such
corporation or other entity to be merged into the Parent or any of its
Subsidiaries, in any case pursuant to a merger, purchase of securities or of
assets or any reorganization providing for the delivery or issuance to the
holders of the then outstanding securities of such corporation or other entity,
in exchange for such securities, of cash or securities of the Parent or any of
its Subsidiaries, or a combination thereof, or (c) purchases all or
substantially all of the assets or of any line of business of any corporation or
other entity.
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Section 8.12. No Material Change in Business. Make or permit any of
its Subsidiaries (other than an Inactive Subsidiary) to make a material change
in the nature of its business such that it is no longer primarily engaged in the
Core Business.
Section 8.13. No Restriction. Agree, or permit any of its Subsidiaries
to agree, to any restriction on the right of any Subsidiary to pay to the Parent
any dividends or repayments of loan advances.
Section 8.14. Swap and Exchange Agreements. Enter into, or permit any
of its Subsidiaries to enter into, any interest-rate swap, cap, floor, collar or
other similar agreement, or any foreign exchange contract, currency swap
agreement or other similar agreement, except for the purpose of hedging its risk
in the ordinary course of business.
ARTICLE 9. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid, or any Letter of
Credit shall remain outstanding, or any Lender shall have any Revolving Credit
Commitment under this Agreement:
Section 9.1. Interest Coverage Ratio. The Parent shall not permit, as
of the last day of any fiscal quarter of the Parent, the Interest Coverage Ratio
for the period of the four consecutive fiscal quarters ending on such day to be
less than 3.5 to 1.0.
Section 9.2. Average Debt Coverage Ratio. The Parent shall not permit,
as of the last day of any fiscal quarter of the Parent, the Average Debt
Coverage Ratio for the period of four consecutive fiscal quarters ending on such
day to be greater than 3.25 to 1.0.
Section 9.3. Capital Expenditures. The Parent shall not permit (a)
Consolidated Capital Expenditures to exceed $25,000,000 for any fiscal year and
(b) the sum of Consolidated Capital Expenditures to exceed $100,000,000 during
the period from February 1, 2005 through the Maturity Date; provided that (i) if
the amount of Consolidated Capital Expenditures made in any fiscal year shall be
less than the maximum amount permitted under clause (a) above (before giving
effect to any carryover), then the unused portion of such maximum amount may be
added to the amount of Consolidated Capital Expenditures permitted under such
clause (a) for the immediately succeeding (but not any other) fiscal year and
(ii) the maximum amount permitted under clauses (a) and (b) above shall be
increased by the amount of net cash insurance proceeds, or proceeds of a
condemnation award or other compensation, received by the Parent and its
Subsidiaries during the relevant period in respect of any loss of, damage to or
destruction of, or any condemnation or taking of, property (provided that no
later than 30 days after the end of the fiscal quarter in which such proceeds
are so received, the Parent shall have delivered to the Administrative Agent
setting forth in reasonable detail the amount of such net cash proceeds).
ARTICLE 10. EVENTS OF DEFAULT.
Section 10.1. Events of Default. Any of the following events shall be
an "Event of Default":
65
(a) any Borrower shall: (i) fail to pay the principal of any of its
Notes as and when due and payable; or (ii) fail to pay interest on any of its
Notes or any fee or other amount due from it hereunder as and when due and
payable and such failure shall continue for three days;
(b) any representation or warranty made or deemed made by any Borrower
or a Guarantor in this Agreement or in any other Facility Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;
(c) any Borrower shall: (i) fail to perform or observe any term,
covenant or agreement required to be performed or observed by it that is
contained in Section 2.15 or Section 3.12, or Articles 8 or 9; or (ii) fail to
perform or observe any term, covenant or agreement on its part to be performed
or observed (other than the obligations specifically referred to elsewhere in
this Section) in any Facility Document and (in the case of a failure referred to
in this clause (ii)), such failure shall continue for 30 consecutive days;
(d) the Parent or any of its Subsidiaries shall: (i) fail to pay any
indebtedness, including but not limited to indebtedness for borrowed money
(other than the payment obligations described in (a) above), of the Parent or
such Subsidiary, as the case may be, or any interest or premium thereon, when
due (whether by installment, scheduled maturity, required prepayment,
acceleration, demand or otherwise); or (ii) fail to perform or observe any term,
covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, after the giving of notice or
passage of time, or both, the maturity of such indebtedness, provided that (in
the case of both (i) and (ii)) the aggregate principal amount of such
indebtedness as to which such failure to pay has occurred (and not merely the
installment or other portion thereof not paid), or as to which the maturity is
or is permitted to be accelerated by reason of such failure to perform or
observe, shall be $5,000,000 or more; or any such indebtedness whose principal
amount is $5,000,000 or more shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) the Parent or any of its Subsidiaries: (i) shall generally not, or
be unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii) shall commence
any proceeding under any bankruptcy, reorganization, arrangement or readjustment
of debt law or statute, or (except in the case of an Inactive Subsidiary) any
dissolution or liquidation law or statute, of any jurisdiction whether now or
hereafter in effect; or (iv) shall have had any such petition or application
filed or any such proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is entered, or which
petition, application or proceeding remains undismissed or unstayed for a period
of 30 days or more; or shall be the subject of any proceeding under which its
assets may be subject to seizure, forfeiture or divestiture (other than a
proceeding in respect of a Lien permitted under Section 8.3 (a)); or (v) by any
act or omission shall indicate its consent to,
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approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 30 days or more;
(f) one or more judgments, decrees or orders for the payment of money
in excess of $5,000,000 in the aggregate shall be rendered against the Parent or
any of its Subsidiaries and such judgments, decrees or orders shall continue
unsatisfied and in effect for a period of 60 consecutive days without being
vacated, discharged, satisfied or stayed or bonded pending appeal;
(g) any event or condition shall occur or exist with respect to any
Plan or Multiemployer Plan concerning which the Parent is under an obligation to
furnish a report to the Lenders in accordance with Section 7.8(f) and as a
result of such event or condition, together with all other such events or
conditions, the Parent or any ERISA Affiliate has incurred or in the opinion of
the Required Lenders is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a Section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of the
Parent and its Subsidiaries, on a consolidated basis;
(h) the Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement in an amount which is material;
(i) if at any time the capital stock of the Parent owned by the
Xxxxxxxx Group represents less than 25% of the voting power of (x) all
outstanding capital stock of the Parent and (y) all outstanding securities and
rights that are then convertible into or exchangeable for capital stock of the
Parent or upon the exercise of which capital stock of the Parent will be issued
in respect of such securities or rights;
(j) there is a seizure by or forfeiture in favor of any Governmental
Authority of any property of the Parent or any of its Subsidiaries having a
value in excess of $5,000,000, other than (i) by an eminent domain proceeding
where the Parent or such Subsidiary receives reasonable compensation therefor;
or (ii) if such seizure or forfeiture does not have a material adverse effect on
the financial condition, business or operations of the Parent and its
Subsidiaries taken as a whole or on the ability of any Borrower or any Guarantor
to perform any of its obligations under any Facility Document; or
(k) the Parent Guarantee or any Subsidiary Guarantee shall at any time
after its execution and delivery and for any reason cease to be in full force
and effect (except as permitted by Section 12.1(a)(vii)) or shall be declared
null and void, or the validity or enforceability thereof shall be contested by
the Guarantor thereunder, or such Guarantor shall deny it has any further
liability or obligation thereunder or shall fail to perform its obligations
thereunder.
Section 10.2. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may or, upon request of the Required
Lenders, shall by notice to the
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Parent (on behalf of itself and the Foreign Subsidiary Borrowers), do any or all
of the following: (a) declare the Revolving Credit Commitments to be terminated,
whereupon the same shall forthwith terminate; (b) declare the outstanding
principal of the Notes, all interest thereon and all other amounts payable under
this Agreement or the Notes to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by each Borrower (provided that, in the
case of an Event of Default referred to in Section 10.1(e) as to any Borrower,
the Revolving Credit Commitments shall be immediately terminated, and the Notes,
all interest thereon and all other amounts payable under this Agreement shall be
immediately due and payable without any notice and without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by each Borrower); and (c) direct the Parent immediately to pay (and the
Parent agrees that upon receipt of such a notice, or upon the occurrence of an
Event of Default referred to in Section 10.1(e) as to any Borrower, the Parent
will immediately pay) to the Administrative Agent such additional amount of cash
as is equal to the L/C Exposure to the extent not already secured by cash
collateral under Section 2.13, to be held by the Administrative Agent in the
Cash Collateral Account as security for the Parent's reimbursement obligation in
respect of Letters of Credit.
ARTICLE 11. THE ADMINISTRATIVE AGENT; RELATIONS AMONG LENDERS AND PARENT.
Section 11.1. Appointment, Powers and Immunities of Administrative
Agent. Each Lender (in its capacity as Lender and, as applicable, Swingline Bank
and Issuing Bank) hereby irrevocably (but subject to removal by the Required
Lenders pursuant to Section 11.9) appoints and authorizes the Administrative
Agent to act as its agent hereunder and under any other Facility Document with
such powers as are specifically delegated to the Administrative Agent by the
terms of this Agreement and any other Facility Document, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and any other Facility Document, and shall not by reason of this
Agreement be a trustee for any Lender. The Administrative Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by any Borrower or any officer or official of any Borrower or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under, this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility Document
or any other document or instrument referred to or provided for herein or
therein, for the perfection or priority of any collateral security for the Loans
or the reimbursement obligations in respect of Letters of Credit or for any
failure by any Borrower or any Guarantor to perform any of its obligations
hereunder or under any other Facility Document. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible, except as to
money or securities received by it or its authorized agents, for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any
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other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct.
Section 11.2. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Lender as
the holder of the Loans made by it and its participations in Letters of Credit
for all purposes hereof unless and until an Assignment and Assumption Agreement
shall have been furnished to the Administrative Agent in accordance with Section
12.5, but the Administrative Agent shall not be required to deal with any Person
who has acquired a participation in any Loan or any such participation from a
Lender. As to any matters not expressly provided for by this Agreement or any
other Facility Document, the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Lenders, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders and any other holder of all or any portion of
any Loan or any such participation.
Section 11.3. Defaults. The Administrative Agent shall not be deemed
to have knowledge of the occurrence of a Default or Event of Default (other than
the non-payment of principal of or interest on the Loans to the extent the same
is required to be paid to the Administrative Agent for the account of the
Lenders) unless the Administrative Agent has received notice from a Lender or a
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders (and shall
give each Lender prompt notice of each such non-payment). The Administrative
Agent shall (subject to Section 11.8 and Section 12.1(a)) take such action with
respect to such Default or Event of Default which is continuing as shall be
directed by the Required Lenders; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may 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 interest
of the Lenders; and provided further that the Administrative Agent shall not be
required to take any such action which it determines to be contrary to law.
Section 11.4. Rights of Administrative Agent as a Lender. With respect
to its Revolving Credit Commitment and the Loans made by it and the Letters of
Credit, the entity which is the Administrative Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the entity which is the Administrative Agent in its capacity
as a Lender. The entity which is the Administrative Agent and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to (on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with, the Parent (and any of its Affiliates) as
if it were not acting as the Administrative Agent, and the entity which is the
Administrative Agent may accept fees and other consideration from any
69
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders. Although the Administrative Agent
and its Affiliates may in the course of such relationships and relationships
with other Persons acquire information about the Parent, its Affiliates and such
other Persons, the Administrative Agent shall have no duty to disclose such
information to the Lenders.
Section 11.5. Indemnification of Administrative Agent. The Lenders
agree to indemnify the Administrative Agent (to the extent not reimbursed under
Section 12.3 or under the applicable provisions of any other Facility Document,
but without limiting the obligations of the Borrowers under Section 12.3 or such
provisions), ratably in accordance with their respective Pro Rata Percentages,
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Facility Document or any other documents contemplated by or referred
to herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which any Borrower is obligated to pay under
Section 12.3 or under the applicable provisions of any other Facility Document
but excluding, unless a Default or Event of Default has occurred, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents or instruments; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
Section 11.6. Documents. The Administrative Agent will forward to each
Lender, promptly after the Administrative Agent's receipt thereof, a copy of
each report, notice or other document required by this Agreement or any other
Facility Document to be delivered to the Administrative Agent for such Lender.
Section 11.7. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Parent and its Subsidiaries and decision to enter into this Agreement and 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 analysis and decisions in
taking or not taking action under this Agreement or any other Facility Document.
The Administrative Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Parent or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition or business of the Parent or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Administrative Agent or
any of its Affiliates. The Administrative Agent shall not be required to file
this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, for record or give notice of this
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Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 11.8. Failure of Administrative Agent to Act. Except for
action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall have received further assurances
(which may include cash collateral) of the indemnification obligations of the
Lenders under Section 11.5 in respect of any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Section 11.9. Resignation of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Parent (on behalf of itself and the Foreign
Subsidiary Borrowers). Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent, subject (unless an
Event of Default exists) to the approval of the Parent, which approval shall not
be unreasonably withheld. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, subject (unless an Event of
Default exists) to the approval of the Parent, which approval shall not be
unreasonably withheld, which shall be a Lender or (if no Lender accepts the
appointment) a bank which has an office in New York, New York and London and has
a combined capital and surplus of at least $1,000,000,000. The Required Lenders
or the retiring Administrative Agent, as the case may be, shall upon the
appointment of a successor Administrative Agent promptly so notify the Parent
(on behalf of itself and the Foreign Subsidiary Borrowers) and the other
Lenders. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article 11 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
Section 11.10. Amendments Concerning Agency Function. The
Administrative Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document which affects its
duties hereunder or thereunder unless it shall have given its prior consent
thereto.
Section 11.11. Liability of Administrative Agent. The Administrative
Agent shall not have any liabilities or responsibilities to any Borrower on
account of the failure of any Lender to perform its obligations hereunder or to
any Lender on account of the failure of any Borrower or any Guarantor to perform
its obligations hereunder or under any other Facility Document.
Section 11.12. Delegation of Agency Functions. The Administrative
Agent may perform any and all its duties and exercise any or all of its rights
and powers by or through any
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one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise any
and all of its rights and powers through their respective Affiliates. The
exculpatory provisions as to the Administrative Agent contained in this Article
shall apply to any such sub-agent and to the Affiliates of the Administrative
Agent and any such sub-agent.
Section 11.13. Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender or a
Borrower (either one as appropriate being the "Payor") (or by the Parent on
behalf of a Foreign Subsidiary Borrower) prior to the date on which such Lender
is to make payment hereunder to the Administrative Agent of the proceeds of a
Loan or such Borrower is to make payment to the Administrative Agent, as the
case may be (either such payment being a "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient of such payment
(and, if such recipient is a Borrower and the Payor Lender fails to pay the
amount thereof to the Administrative Agent forthwith upon demand, such Borrower)
shall, on demand, repay to the Administrative Agent the amount made available to
it together with interest thereon for the period from the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to (i) in the case of a
Borrower, the interest rate applicable at such time to the applicable Loan, and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds in the relevant currency
(which determination shall be conclusive absent manifest error). If a Lender
makes a Required Payment to the Administrative Agent pursuant to the immediately
preceding sentence and a Borrower shall have repaid such amount to the
Administrative Agent pursuant to such sentence, the Administrative Agent shall
promptly return to such Borrower any amount (including interest) paid by such
Borrower to the Administrative Agent pursuant to such sentence.
Section 11.14. Withholding Taxes. Each Lender represents to the
Administrative Agent and the Parent that it is entitled to receive any payments
to be made to it hereunder without the withholding of any tax imposed by the
United States of America and will furnish to the Administrative Agent such
forms, certifications, statements and other documents as the Administrative
Agent may reasonably request from time to time to evidence such Lender's
exemption from the withholding of any tax imposed by any jurisdiction or to
enable the Administrative Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Lender is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by any
Borrower is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the
Administrative Agent Form W-8ECI or Form W-8BEN of the Internal Revenue Service,
or such other forms, certifications, statements or documents, duly executed and
completed by such Lender as evidence of such Lender's exemption from the
withholding of U.S. tax with respect thereto. The Administrative Agent shall not
be obligated to make any payments hereunder to such Lender in respect of any
Loan or reimbursement of a drawing under a Letter of Credit or such Lender's
Revolving Credit
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Commitment until such Lender shall have furnished to the Administrative Agent
the requested form, certification, statement or document.
Section 11.15. Several Obligations and Rights of Lenders. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. No Lender shall be responsible for
any failure of the Swingline Bank to make a Swingline Loan required to be made
hereunder, or for any failure of the Issuing Bank to issue a Letter of Credit
required to be issued hereunder. The amounts payable at any time hereunder to
each Lender, the Swingline Bank and the Issuing Bank shall be a separate and
independent debt, and each of them shall be entitled to protect and enforce its
rights arising out of this Agreement, and it shall not be necessary for any
other of them to be joined as an additional party in any proceeding for such
purpose.
Section 11.16. Pro Rata Treatment of Syndicated Loans, Etc. Except to
the extent otherwise expressly provided: (a) each Borrowing of Loans pursuant to
Section 2.1 shall be made from the Lenders, each reduction or termination of the
amount of the Revolving Credit Commitments under Section 2.10 shall be applied
to the Revolving Credit Commitments, and each payment of Commitment Fees
accruing under Section 2.7 shall be made for the account of the Lenders, pro
rata according to the amounts of their respective unused Revolving Credit
Commitments; (b) each conversion under Section 2.11 of Syndicated Loans of a
particular Type (but not conversions provided for by Article 4), shall be made
pro rata among the Lenders holding Syndicated Loans of such Type according to
the respective principal amounts of such Syndicated Loans by such Lenders; (c)
each prepayment and payment of principal of or interest on Syndicated Loans of a
particular Type and a particular Interest Period shall be made to the
Administrative Agent for the account of the Lenders holding Syndicated Loans of
such Type and Interest Period pro rata in accordance with the respective unpaid
principal amounts of such Syndicated Loans of such Interest Period held by such
Lenders; and (d) each payment of L/C Participation Fees accruing under Section
3.9 shall be made for the account of the Lenders, pro rata according to their
respective Pro Rata Percentages of the average daily aggregate L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C Disbursements).
Section 11.17. Sharing of Payments Among Lenders. If a Lender shall
obtain payment of any principal of or interest on any Syndicated Loan made by
it, or of any reimbursement obligation of the Parent as to Letters of Credit,
through the exercise of any right of setoff, banker's lien, counterclaim, or by
any other means it shall promptly purchase from the other Lenders participations
in (or, if and to the extent specified by such Lender, direct interests in) the
Loans made by the other Lenders and Letters of Credit in such amounts, and make
such other adjustments from time to time as shall be equitable to the end that
all the Lenders shall share the benefit of such payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with the unpaid principal and interest on the Loans and
Letter of Credit participations held by each of them. To such end the Lenders
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Each Borrower agrees that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders or Letters of Credit may
exercise all rights of setoff, banker's lien, counterclaim or
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similar rights with respect to such participation (or direct interest). Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness of any
Borrower.
Section 11.18. Other Agents. Notwithstanding anything herein to the
contrary, the Sole Lead Arranger and Sole Bookrunner, the Syndication Agent and
the Documentation Agents named on the cover page of this Agreement shall not
have any duties or liabilities under this Agreement, except in their capacity,
if any, as Lenders.
ARTICLE 12. MISCELLANEOUS.
Section 12.1. Amendments and Waivers; Remedies Cumulative. (a) Except
as otherwise expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in writing signed by
the Borrowers (or by the Parent, on behalf of itself and the Foreign Subsidiary
Borrowers), the Administrative Agent and the Required Lenders, or by the
Borrowers (or by the Parent, on behalf of itself and the Foreign Subsidiary
Borrowers), and the Administrative Agent acting with the consent of the Required
Lenders, and any provision of this Agreement may be waived by the Required
Lenders or by the Administrative Agent acting with the consent of the Required
Lenders; provided that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders: (i) increase or extend the term, or
extend the time for the reduction or termination, of the Revolving Credit
Commitments (except that, for the avoidance of doubt, the Revolving Credit
Commitments may be increased pursuant to Section 2.16 without the approval or
consent of any Lender other than each relevant Increasing Lender or Augmenting
Lender referred to in Section 2.16), (ii) extend the date fixed for the payment
of principal of or interest on any Loan, the reimbursement obligation in respect
of any Letter of Credit or any interest thereon or any fees payable hereunder,
(iii) reduce the amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee payable hereunder, (iv) alter the terms
of this Section or any other provision hereof specifying that the approval of
all Lenders is required (including such provisions contained in Section
12.5(a)), (v) amend the definition of the term "Required Lenders", (vi) release
collateral (if any) in any material amount, (vii) release or limit guarantees in
any material amount (provided that the Administrative Agent shall release,
without the consent of any Lenders, any Guarantee of a Subsidiary all of whose
stock (or substantially all of whose stock) is sold to a Person other than
another Subsidiary in a sale that is otherwise permitted by this Agreement or is
otherwise disposed of in accordance with this Agreement), or (viii) the addition
of currencies in which Loans can be made; and provided, further, that (x) any
amendment of Article 11 or any amendment which increases the obligations of the
Administrative Agent hereunder shall require the consent of the Administrative
Agent; (y) any amendment which increases the obligations of the Swingline Bank
hereunder shall require the consent of the Swingline Bank; and (z) any amendment
which increases the obligations of the Issuing Bank hereunder shall require the
consent of the Issuing Bank.
(b) No failure or delay by the Administrative Agent, the Issuing Bank,
the Swingline Bank or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any
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abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank, the Swingline Bank and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (a) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance, amendment, renewal or extension of a Letter of Credit shall not be
construed as a waiver of any Default or Event of Default, regardless of whether
the Administrative Agent, any Lender, the Swingline Bank or the Issuing Bank may
have had notice or knowledge of such Default or Event of Default at the time.
Section 12.2. Usury. Anything herein to the contrary notwithstanding,
the obligations of each Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Lender limiting rates of interest which may be charged or collected by such
Lender.
Section 12.3. Expenses; Indemnity; Damage Waiver. (a) The Parent and
(subject to the limitation contained in the sentence next following) each
Foreign Subsidiary Borrower shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent, including the
reasonable and documented fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit facility
provided for herein, the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank, the Swingline Bank or any Lender, including the reasonable and
documented fees, charges and disbursements of any counsel for the Administrative
Agent, the Issuing Bank, the Swingline Bank or any Lender, in connection with
the enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such reasonable and documented
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. The liability of
each Foreign Subsidiary Borrower under this paragraph (a) shall be limited to
such out-of-pocket expenses that (x) relate to such Foreign Subsidiary Borrower
or to the Loans made to such Foreign Subsidiary Borrower or to the obligations
incurred by such Foreign Subsidiary Borrower under this Agreement or under any
other Facility Document to which such Foreign Subsidiary Borrower is a party, or
(y) arise as a result of such Foreign Subsidiary Borrower being a party to this
Agreement or to another Facility Document.
(b) The Parent and (subject to the limitation contained in the
sentence next following) each Foreign Subsidiary Borrower shall indemnify the
Administrative Agent, the Issuing Bank, the Swingline Bank and each Lender, and
each Related Party of any of the
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foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable and documented fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the use of proceeds of a Loan or Letter of Credit, (ii) any
refusal by the Issuing Bank to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Parent or any of its Subsidiaries, or any environmental
liability related in any way to the Parent or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing or to the execution or delivery of this
Agreement or any other Facility Document or any agreement or instrument
contemplated hereby or thereby or to the performance by the parties hereto or
thereto of their respective obligations hereunder or thereunder or to the
consummation of the transactions contemplated hereby or thereby or to any Loan
or Letter of Credit, whether the same is based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee. The liability of each Foreign Subsidiary Borrower under this
paragraph (b) shall be limited to such losses, claims, damages, liabilities and
related expenses that (x) relate to such Foreign Subsidiary Borrower or to the
Loans made to such Foreign Subsidiary Borrower or to the obligations incurred by
such Foreign Subsidiary Borrower under this Agreement or under any other
Facility Document to which such Foreign Subsidiary Borrower is a party, or (y)
arise as a result of such Foreign Subsidiary Borrower being a party to this
Agreement or to another Facility Document.
(c) To the extent that the Borrowers fail to pay any amount required
to be paid to the Administrative Agent, the Issuing Bank or the Swingline Bank
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Swingline Bank, as the case
may be, such Lender's Pro Rata Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, the Issuing Bank or the Swingline
Bank in its capacity as such.
(d) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Facility Document or any
agreement or instrument contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof.
Section 12.4. Survival. The obligations of the Borrowers under Article
4 and Section 12.3 shall survive the repayment of the Loans and the expiration
of the Letters of Credit and the termination of the Revolving Credit
Commitments.
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Section 12.5. Assignment; Participations. (a) This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrowers, the
Administrative Agent, the Lenders, the Swingline Bank, the Issuing Bank and
their respective successors and assigns, except that no Borrower may assign or
transfer its rights or obligations hereunder without the written approval of all
the Lenders (and any attempted such assignment or transfer without such consent
shall be null and void).
(b) Each Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Revolving Credit Commitment and the Syndicated Loans owing to it and its
participations in Letters of Credit and in Swingline Loans), with the prior
written consent (such consent not to unreasonably withheld) of (i) the
Administrative Agent, the Swingline Bank and the Issuing Bank and (ii) the
Parent; provided that (x) no such consent of the Parent shall be required for an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund or if any
Event of Default exists as a result of the commencement of a case with respect
to the Parent under the U.S. Federal Bankruptcy Code or as a result of the
commencement of a bankruptcy, insolvency, reorganization, receivership or
similar proceeding with respect to either Foreign Subsidiary Borrower under
Swiss or other foreign law, to any other assignee and (y) the provisions of
paragraph (g) below shall have been complied with.
Assignments shall be subject to the following additional conditions:
(A) each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
and the assignment shall cover the same percentage of such Lender's Revolving
Credit Commitment and Syndicated Loans and participations in Letters of Credit
and in Swingline Loans;
(B) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Revolving Credit Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the effective date of the Assignment and Assumption Agreement with respect
to such assignment) shall in no event be less than $5,000,000 and shall be an
integral multiple of $1,000,000, unless the Administrative Agent and the Parent
otherwise consent (provided that no such consent of the Parent shall be required
if any Event of Default exists as a result of the commencement of a case with
respect to the Parent under the U.S. Federal Bankruptcy Code or as a result of
the commencement of a bankruptcy, insolvency, reorganization, receivership or
similar proceeding with respect to either Foreign Subsidiary Borrower under
Swiss or other foreign law);
(C) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its approval and acceptance, an Assignment and
Assumption Agreement;
(D) the Administrative Agent shall receive from the assignor (or, in
the case of an assignment pursuant to Section 4.7, from the Parent) a processing
fee of $3,500; and
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(E) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
Upon such execution, delivery, approval and acceptance, and on the
effective date specified in the applicable Assignment and Assumption Agreement,
(a) the assignee thereunder shall become a party hereto and a "Lender" for
purposes hereof and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Assumption Agreement, shall
have the rights and obligations of a Lender hereunder and (b) the
Lender-assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Assumption
Agreement, relinquish its rights (except under Article 4 and Section 12.3 in
respect of the period prior to the effective date of such Assignment and
Assumption) and be released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and Assumption
Agreement, the Lender-assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Assumption Agreement, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Facility Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Facility Document or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Parent or any Subsidiary or the performance or observance by the Parent
or any Subsidiary of any of their respective obligations under any Facility
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the most recent financial statements referred to in Section
7.8(a) and (b) and such other Facility Documents and other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption Agreement; (iv) such
assignee will, independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement and the
other Facility Documents as are delegated to the Administrative Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain a copy of each Assignment
and Assumption Agreement delivered to and accepted by it and shall record the
names and addresses of each Lender and the Revolving Credit Commitment of, and
principal amount of the Syndicated Loans owing to, and the amount of
participations in Letters of Credit and in Swingline Loans of, such Lender from
time to time. Each Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is so recorded as a Lender hereunder for all
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purposes of this Agreement, absent manifest error. Such record shall be
available for inspection by each Borrower and each Lender.
(e) Upon its receipt of an Assignment and Assumption Agreement
executed by an assigning Lender and an assignee and (to the extent required by
this Section) consented to by the Parent, the Swingline Bank and the Issuing
Bank and the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the Administrative Agent shall,
if such Assignment and Assumption Agreement has been properly completed, (i)
accept such Assignment and Assumption Agreement, (ii) record the information
contained therein and (iii) give prompt notice thereof to the Parent (on behalf
of itself and the Foreign Subsidiary Borrowers) and the Lenders. Upon request,
each Borrower shall execute and deliver to the Administrative Agent appropriate
promissory notes in favor of each assignee evidencing such assignee's Pro Rata
Percentage of the Total Revolving Credit Commitment. If the Lender-assignor
shall have assigned its entire Revolving Credit Commitment and Syndicated Loans,
the original promissory notes evidencing such Revolving Credit Commitment and
Syndicated Loans shall be cancelled and returned to the Parent (on behalf of
itself or the applicable Foreign Subsidiary Borrower).
(f) Subject to paragraph (g) of this Section, each Lender may sell
participations to one or more banks, finance companies, insurance or other
financial institutions in or to all or a portion of its rights and obligations
under this Agreement (including without limitation all or a portion of its
Revolving Credit Commitment and the Syndicated Loans owing to it); provided,
however, that (i) such Lender's obligations under this Agreement (including
without limitation its Revolving Credit Commitment and its participations in
Letters of Credit) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such participant shall have no rights under any of the Facility Documents,
(iv) each Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and with regard to any and
all payments to be made under this Agreement and its Notes, and (v) the
agreement executed by such Lender in favor of the participant shall not give the
participant the right to require such Lender to take or omit to take any action
hereunder except action directly relating to (i) the extension of a payment date
with respect to any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (ii) the reduction of the
principal amount outstanding hereunder allocated to such participant or (iii)
the reduction of the rate of interest payable on such amount or any amount of
fees payable hereunder to a rate or amount, as the case may be, below that which
the participant is entitled to receive under its agreement with such Lender.
(g) Notwithstanding anything herein to the contrary, without the prior
written consent of the Parent, no Lender shall effect any assignment of all or a
portion of, or any sale of a participation in or entry into any
sub-participation agreement (each a "transfer") with respect to, any Syndicated
Loan made to any Foreign Subsidiary Borrower if such transfer would result in
more than five Lenders which are not Qualifying Banks. Each Lender further
agrees that if in connection with any transfer by such Lender the proposed
transferee is not a Qualifying Bank, such Lender shall give at least ten days'
prior notice of such proposed transfer to the Parent and the Administrative
Agent (which shall promptly notify each of the other Lenders). Any such
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purported assignment, participation or sub-participation that does not comply
with the requirements of this paragraph (including the requirement for notice
pursuant to the immediately preceding sentence) shall be null and void.
(h) Each Borrower will use reasonable efforts to cooperate with the
Administrative Agent and Lenders in connection with the assignment of interests
under this Agreement or the sale of participations herein.
(i) No Lender shall be permitted to assign or sell all or any portion
of its rights and obligations under this Agreement to the Parent or any
Affiliate of the Parent.
(j) Any Lender that proposes to sell any assignment or participation
hereunder may furnish any information concerning the Parent and its Affiliates
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information, as provided in Section 12.14.
(k) In addition to the assignments and participations permitted under
the foregoing provisions of this Section, any Lender may at any time pledge or
grant a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation any
pledge or grant to secure obligations of such Lender to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or grant of a security
interest; provided that no such pledge or grant of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or grantee for such Lender as a party hereto.
Section 12.6. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, (i) in the case of
any Borrower, the Administrative Agent, the Swingline Bank and the Issuing Bank,
to it at its address set forth beneath its signature line below and (ii) in the
case of any Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.
(b) 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 Article 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or any
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.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other
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communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.
Section 12.7. Setoff. Each Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a
Lender may otherwise have, each Lender (and any Affiliate thereof through which
any Loan is made) shall be entitled, at its option, to offset balances (general
or special, time or demand, provisional or final) held by it for the account of
such Borrower at any of such Lender's offices, in dollars or in any other
currency, against any amount payable by such Borrower to such Lender under this
Agreement or such Lender's Note which is not paid when due (regardless of
whether such balances are then due to such Borrower), in which case it shall
promptly notify such Borrower (or the Parent, on behalf of a Foreign Subsidiary
Borrower) and the Administrative Agent thereof; provided that such Lender's
failure to give such notice shall not affect the validity thereof or place such
Lender under any liability to such Borrower. Payments by each Borrower hereunder
shall be made without setoff or counterclaim.
Section 12.8. JURISDICTION; JURY WAIVER; IMMUNITIES. (A) EACH BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER FACILITY
DOCUMENT OR ANY LETTER OF CREDIT, AND EACH BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH BORROWER AT THE ADDRESS FOR IT
SPECIFIED IN SECTION 12.6. EACH BORROWER AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON
CONVENIENS. EACH BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE ADMINISTRATIVE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR
UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY.
(b) Furthermore, each Foreign Subsidiary Borrower hereby agrees that
service of all writs, process and summonses in any such action or proceeding
brought in the State of New York may be made upon Corporation Service Company,
presently located at 00 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxx 00000 X.X.X.
(the "Process Agent") and each Foreign Subsidiary Borrower hereby confirms and
agrees that the Process Agent has been duly and irrevocably appointed as its
agent and true and lawful attorney-in-fact in its name, place and stead to
accept such service of any and all such writs, process and summonses, and agrees
that the failure of the Process Agent to give any notice of any such service of
process to such Foreign
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Subsidiary Borrower (or to any other Person) shall not impair or affect the
validity of such service or of any judgment based thereon.
(C) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.
(d) Nothing in this Section shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by law or affect the right of the Administrative Agent or any Lender
to bring any action or proceeding against any Borrower or its property in the
courts of any other jurisdictions.
(e) To the extent that any Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, such Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and its Notes.
Section 12.9. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.11. Authorization of Parent. Each Foreign Subsidiary
Borrower hereby authorizes the Parent to give on behalf of such Foreign
Subsidiary Borrower all notices, consents and other communications that may be
given by such Foreign Subsidiary Borrower under or in connection with this
Agreement or any other Facility Document, and to receive on behalf of such
Foreign Subsidiary Borrower all notices, consents and other communications that
may be given to such Foreign Subsidiary Borrower under or in connection with
this Agreement or any other Facility Document (in each case, irrespective of
whether or not such notice, consent or other communication is expressly provided
elsewhere in this Agreement to be given or
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received by the Parent on behalf of such Foreign Subsidiary Borrower). Such
notices, consents and other communications may include Borrowing Requests,
notices as to continuations, conversions and prepayments of Loans, notices and
demands in connection with Events of Default, and notices and demands in
connection with the exercise by the Administrative Agent or any Lender of
remedies. Such notices, consents and other communications may be given by or to
the Parent in its own name or in the name of such Foreign Subsidiary Borrower.
The authority given by each Foreign Subsidiary Borrower in this Section is
coupled with an interest and is irrevocable until all the Revolving Credit
Commitments of the Lenders have expired or been terminated and all the
obligations of such Foreign Subsidiary Borrower under this Agreement and the
other Facility Documents have been paid in full.
Section 12.12. Integration. The Facility Documents set forth the
entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 12.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 12.14. Confidentiality. (a) Each Lender (in its capacity as
Lender and, as applicable, as Swingline Bank and Issuing Bank) and the
Administrative Agent agrees (on behalf of itself and each of its Affiliates,
directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with safe and sound banking
practices, any non-public information supplied to it by any Borrower pursuant to
this Agreement which is identified by such Borrower (or by the Parent on behalf
of the applicable Foreign Subsidiary Borrower) as being confidential at the time
the same is delivered to the Lenders or the Administrative Agent, provided that
nothing herein shall limit the disclosure of any such information (a) to its
Affiliates or any of its or such Affiliates' directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Borrower and its
obligations, (g) with the consent of the Parent or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank, the Swingline Bank or any Lender on a nonconfidential basis from a source
other than the Borrowers; provided further that in no event shall the
Administrative Agent, the Issuing Bank, the Swingline Bank or any Lender be
obligated or required to return any materials furnished by any Borrower.
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(b) Notwithstanding anything in this Agreement to the contrary, each
Lender (in its capacity as Lender and, as applicable, as Swingline Bank and
Issuing Bank) and the Administrative Agent (and such Lender's or Administrative
Agent's employees, representatives or other agents, as the case may be) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement,
and all materials of any kind (including opinions or other tax analyses) related
to such tax treatment and tax structure, except that (i) this sentence shall not
apply to the extent that nondisclosure is reasonably necessary to comply with
the securities laws, and (ii) this sentence shall not permit any Person to
reveal the identity of the Parent or any of its Subsidiaries.
Section 12.15. Treatment of Certain Information. Each Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Lender or by one or more of their
respective subsidiaries or Affiliates and (b) acknowledges that information
delivered to each Lender by any Borrower (or by the Parent on behalf of a
Foreign Subsidiary Borrower) may be provided to each such subsidiary and
Affiliate.
Section 12.16. Judgment Currency. (a) The obligations hereunder of any
Borrower to make payments in dollars or in a particular Foreign Currency, as the
case may be (the "Obligation Currency"), shall not be discharged or satisfied by
any tender or recovery pursuant to any judgment expressed in or converted into
any currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent,
the Issuing Bank, the Swingline Bank or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent, the
Issuing Bank, the Swingline Bank or such Lender under this Agreement or the
other Facility Documents. If, for the purpose of obtaining or enforcing judgment
against any Borrower or any Guarantor in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Dollar Equivalent or the Foreign Currency Equivalent (as the case
may be) of such amount, in each case, as of the date immediately preceding the
day on which the judgment is given (such Business Day being hereinafter referred
to as the "Judgment Currency Conversion Date") using the current Exchange Rate
as of the Judgment Currency Conversion Date.
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the applicable Borrower, as the case may be, covenants and agrees to
pay, or cause to be paid, such additional amounts, if any (but in any event not
a lesser amount), as may be necessary to ensure that the amount paid in the
Judgment Currency, when converted at the rate of exchange prevailing on the date
of payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the Dollar Equivalent, or the Foreign
Currency Equivalent (as the case may be), such amounts shall include any premium
and costs payable in connection with the purchase of the Obligation Currency.
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Section 12.17. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 12.18. USA PATRIOT Act. Each Lender hereby notifies the
Borrowers that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), such Lender may be required
to obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify the Borrowers in accordance with said
Act.
Section 12.19. Termination of Existing Credit Agreement. Each Lender
that is party as a lender to the Credit Agreement dated as of June 17, 2003
among the Parent, Concord Watch Company, S.A., MWC, the lenders party thereto
and JPMCB, as administrative agent, swingline bank and issuing bank, by its
execution and delivery of this Agreement hereby (a) waives the requirement in
such credit agreement that notice of the termination of the commitments and any
prepayment thereunder be provided in advance of the date of such termination or
prepayment and (b) agrees that the Borrowers' execution and delivery of this
Agreement shall be effective as notice by the borrowers under such credit
agreement of the termination of the commitments thereunder.
[The remainder of this page has intentionally been left blank.]
85
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MOVADO GROUP, INC.,
as Borrower
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Senior VP/CFO
Address for Notices:
Movado Group, Inc.
000 Xxxx Xxxx Xxxxxxx, XX 00000
Attention: Treasurer
Telecopier No.: 000-000-0000
with a simultaneous copy to:
Movado Group, Inc.
000 Xxxx Xxxx Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
86
MOVADO WATCH COMPANY SA,
as Borrower
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Director
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: COO
Address for Notices:
Movado Watch Company SA
c/o Movado Group, Inc.
000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Treasurer
Telecopier No.: 000-000-0000
with a simultaneous copy to:
Movado Group, Inc.
000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
87
MGI LUXURY GROUP S.A.,
as Borrower
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Director
By: /s/ Xxxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: COO
Address for Notices:
MGI Luxury Group S.A.
c/o Movado Group, Inc.
000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Treasurer
Telecopier No.: 000-000-0000
with a simultaneous copy to:
Movado Group, Inc.
000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
88
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Lender
By: /s/ XXXXXX X. XXXXXXX, III
------------------------------------
Name: XXXXXX X. XXXXXXX, III
Title: Vice President
Address for Notices as Administrative Address for Notices as Issuing Bank:
Agent, Swingline Bank and Lender: JPMorgan Chase Bank, N.A.
JPMorgan Chase Bank, N.A. 000 Xxxxx 00 Xxxx
0000 Xxxxxx Xxxxxx, 00xx Xxxxx Xxxxxxxxx XX 00000
Xxxxxxx, Xxxxx 00000-0000 Attention: Xxxxxxx Xxxxx
Attention: Loan and Agency Services Telephone No.: 000-000-0000
Group, Xxxxxxx Xxxx Telecopier No.: 000-000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a simultaneous copy to:
JPMorgan Chase Bank, N.A.
000 Xxxxx 00 Xxxx
Xxxxxxxxx XX 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
And, if in respect of Foreign
Currency Borrowings, with a
simultaneous copy to:
X.X. Xxxxxx Europe Limited
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Attention: Xxxxxx Xxxxxxx
Telephone No.: 00 (000) 000-0000
Telecopier No.: 00 (000) 000-0000
00
XXXX XX XXXXXXX, X.X., XXXXXX
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Name: XXXXXXX XXXXXXXX
Title: CREDIT PRODUCTS OFFICER
00
XXX XXXX XX XXX XXXX
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
91
CITIBANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: Vice President
---------------------------------
92
EXHIBIT A-1
PROMISSORY NOTE
(Syndicated Loans)
[Date of Note]
________________ (the "Borrower"), for value received, hereby promises
to pay to the order of ______________ (the "Lender"), at the office of JPMorgan
Chase Bank, N.A., as administrative agent (in such capacity, the "Administrative
Agent"), described in the Credit Agreement (as such term is hereinafter
defined), for the account of the appropriate Lending Office of the Lender, the
amount of the Syndicated Loans made by the Lender to the Borrower pursuant to
the Credit Agreement, in immediately available funds, on the dates, in the
currency and in the manner provided in the Credit Agreement. The Borrower also
promises to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, at said office for the account of such Lending
Office at the rates of interest provided in the Credit Agreement, on the dates,
in the currency and in the manner provided in the Credit Agreement.
The date and amount of each Syndicated Loan made by the Lender to the
Borrower under the Credit Agreement, and whether such Loan is a LIBOR Loan or an
ABR Loan, and the currency in which such Loan is made, and the date and amount
of each payment of principal thereof, shall be recorded by the Lender on its
books and, prior to any transfer of this Note (or, at the discretion of the
Lender, at any other time), endorsed by the Lender on the schedule attached
hereto or any continuation thereof.
This is one of the Syndicated Loan Notes referred to in that certain
Credit Agreement (as amended from time to time, the "Credit Agreement") dated as
of December 15, 2005 among Movado Group, Inc., Movado Watch Company SA, MGI
Luxury Group S.A., the Lenders party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent, as Swingline Bank and as Issuing Bank. This Note evidences
the Syndicated Loans made by the Lender to the Borrower thereunder. All
capitalized terms not defined herein shall have the meanings given to them in
the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
the principal of this Note upon the occurrence of certain Events of Default
specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the law of the State of New York.
[NAME OF BORROWER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SECOND SIGNATURE LINE FOR
FOREIGN SUBSIDIARY BORROWER
By:
------------------------------------
Name:
----------------------------------
Title: ]
--------------------------------
-0-
Xxxxxx XXXXX Amount of Balance Notation
Date of Loan or ABR Currency Payment Outstanding By
---- ------- ------ -------- --------- ----------- --------
-3-
EXHIBIT A-2
PROMISSORY NOTE
(Swingline Loans)
$10,000,000 [_______], 2005
MOVADO GROUP, INC., a New York corporation (the "Borrower"), for value
received, hereby promises to pay to the order of JPMORGAN CHASE BANK, N.A. (the
"Swingline Bank"), at the office of JPMorgan Chase Bank, N.A., as administrative
agent (in such capacity, the "Administrative Agent"), described in the Credit
Agreement (as such term is hereinafter defined), for the account of the
appropriate Lending Office of the Swingline Bank, the principal sum of Ten
Million Dollars or, if less, the amount of the Swingline Loans made by the
Swingline Bank to the Borrower pursuant to the Credit Agreement that are
outstanding, in lawful money of the United States, in immediately available
funds, on the dates and in the manner provided in the Credit Agreement. The
Borrower also promises to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, at said office for the account of
such Lending Office in lawful money of the United States at the rates of
interest provided in the Credit Agreement, on the dates and in the manner
provided in the Credit Agreement.
The date and amount of each Swingline Loan made by the Swingline Bank
to the Borrower under the Credit Agreement, and each payment of principal
thereof, shall be recorded by the Swingline Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Swingline Bank, at any other
time), endorsed by the Swingline Bank on the schedule attached hereto or any
continuation thereof.
This is the Swingline Loan Note referred to in that certain Credit
Agreement (as amended from time to time, the "Credit Agreement") dated as of
December 15, 2005 among Movado Group, Inc., Movado Watch Company SA, MGI Luxury
Group S.A., the Lenders party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent, as Swingline Bank and as Issuing Bank. This Note evidences
the Swingline Loans made by the Swingline Bank thereunder. All capitalized terms
not defined herein shall have the meanings given to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of the maturity of
the principal of this Note upon the occurrence of certain Events of Default
specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the law of the State of New York.
MOVADO GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-2-
Amount Amount of Balance Notation
Date of Loan Payment Outstanding By
---- ------- --------- ----------- --------
-3-
EXHIBIT B
December 15, 2005
JPMorgan Chase Bank, N.A.,
as Administrative Agent
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Re: The Credit Agreement dated as of the date hereof (which, as the same may
hereafter be amended, will be called herein the "Credit Agreement") among
Movado Group, Inc., Movado Watch Company SA, MGI Luxury Group S.A., the
Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative
Agent, and as Swingline Bank and as Issuing Bank. Capitalized terms used
herein have the meanings ascribed to them in the Credit Agreement.
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, the Borrowers
hereby designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess or email:
NAME
Xxxx X. Xxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxx
Instructions may be honored on the oral, telephonic, teleprocess or
email instructions of anyone purporting to be any one of the above designated
persons. The Parent will furnish you with confirmation of each such instruction
either by telex (whether tested or untested) or in writing signed by any person
designated above (including any telecopy which appears to bear the signature of
any person designated above) on the same day that the instruction is provided to
you but your responsibility with respect to any instruction shall not be
affected by your failure to receive such confirmation or by its contents.
Transactions that are the subject of such instructions are to be processed (a)
for the Parent, through Movado Group, Inc., ABA No.: 000000000, Acct No.:
0381130798, at the Administrative Agent; (b) for MWC, through Movado Watch
Company SA at UBS SA, Swift Code: XXXXXXXX00X, IBAN: XX00 0000 0000 0000 00000,
Account No.: 235-00000000.2; (c) for Luxury, through MGI Luxury Group S.A. at
UBS SA, Swift Code: XXXXXXXX00X, IBAN: XX00 0000 0000 0000 00000, Account No.:
235-00000000.1; or (d) in the case of any Borrower, such other account as may be
mutually agreed to by you and the Parent (the Parent's agreement as to such
other account to be evidenced by a writing signed by two of the above-designated
persons).
You shall be fully protected in, and shall incur no liability to any
of the Borrowers for, acting upon any instructions which you in good faith
believe to have been given by any person designated above, and in no event shall
you be liable for special, consequential or punitive damages. In addition, the
Borrowers agree to hold you and your agents harmless from any and all liability,
loss and expense arising directly or indirectly out of instructions that any
Borrower (or the Parent on behalf of any Foreign Subsidiary Borrower) provides
to you in connection with the Credit Agreement except for liability, loss or
expense occasioned by the gross negligence or willful misconduct of you or your
agents.
Upon notice to the Parent, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that the Parent agreed to in writing.
The Parent will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
MOVADO GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MOVADO WATCH COMPANY SA
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-2-
MGI LUXURY GROUP S.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-3-
EXHIBIT C-1
(Form of Opinion of Xxxxxxx X. Xxxxxx, Esq.)
December 15, 2005
To each of the Lenders party to the Credit Agreement
referred to below and JPMorgan Chase Bank, N.A. as
Administrative Agent, Swingline Bank, and Issuing Bank
Ladies and Gentlemen:
I have acted as counsel to Movado Group, Inc., a New York corporation
(the "Parent Borrower"), in connection with that certain Credit Agreement (the
"Credit Agreement") dated as of the date hereof among the Parent Borrower, MGI
Luxury Group S.A., a corporation organized under the laws of Switzerland
("MGI"), Movado Watch Company SA, a corporation organized under the laws of
Switzerland (together with MGI, the "Foreign Subsidiary Borrowers" and, together
with MGI and the Parent Borrower, the "Borrowers"), the Lenders signatory
thereto and JPMorgan Chase Bank, N.A. as Administrative Agent, as Swingline Bank
and as Issuing Bank (the "Agent Bank"). I have also acted as counsel to Movado
Retail Group, Inc., a New Jersey corporation ("Movado Retail"), and Movado LLC,
a Delaware limited liability company ("Movado LLC" and, together with Movado
Retail, the "Initial Guarantors" and, together with Movado Retail and the Parent
Borrower, the "US Entities"), in connection with the Subsidiary Guarantee[s] by
[each of] the Initial Guarantors in favor of the Lenders and the Agent Bank.
Except as otherwise defined herein, all terms used herein and defined in the
Credit Agreement shall have the meanings assigned to them therein.
In connection with this opinion, I have examined executed copies of
the Facility Documents and such other documents, records, agreements and
certificates as I have deemed appropriate. I have also reviewed such matters of
law as I have considered relevant for the purpose of this opinion.
Based upon the foregoing, I am of the opinion that:
1. Each of the Parent Borrower and Movado Retail is a corporation duly
incorporated, validity existing and in good standing under the laws of the State
of New York (in the case of the Parent Borrower) or New Jersey (in the case of
Movado Retail); and each of them has the corporate power and authority to own
its assets and to transact the business in which it is now engaged and is duly
qualified as a foreign corporation and in good standing under the laws of each
other jurisdiction in which the failure to be so qualified would have a material
adverse effect on the business, financial condition or operations of the Parent
Borrower and its Subsidiaries taken as a whole.
2. Movado LLC is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware; and it
has the limited liability company power and authority to own its assets and to
transact the business in which it is now engaged and is duly qualified as a
foreign limited liability company and in good standing under the laws of each
other jurisdiction in which the failure to be so qualified would have a material
adverse effect on the business, financial condition or operations of the Parent
Borrower and its Subsidiaries taken as a whole.
3. Each Facility Document has been duly executed and delivered by each
US Entity which is a party to it. Each Facility Document constitutes a legal,
valid and binding obligation of each US Entity which is a party to it,
enforceable against that US Entity in accordance with its terms.
4. The execution, delivery and performance by each US Entity (and in
the case of clauses (d), (e) and (f) below, each Foreign Subsidiary Borrower) of
the Facility Documents to which it is a party are within its power and authority
and have been duly authorized by all necessary corporate or limited liability
company action, as applicable, and do not: (a) require any consent or approval
of its stockholders; (b) contravene its charter, by-laws or limited liability
company agreement, as applicable; (c) violate any provision of, or require any
filing, registration, consent or approval under, any law (other than the law of
the State of New York and Federal law of the United States), rule, regulation
(including without limitation Regulation U), order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to any
US Entity; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which such Borrower or such Initial Guarantor is a party
or by which it or its properties may be bound or affected; (e) result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties now owned or hereafter acquired by such Borrower or such Initial
Guarantor; or (f) cause the Parent Borrower or any Subsidiary to be in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
5. To the best of my knowledge (after due inquiry), there are no
pending or threatened actions, suits or proceedings against or affecting the
Parent Borrower or any of its Subsidiaries before any court, governmental agency
or arbitrator, which would, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Parent Borrower and its Subsidiaries taken as a whole or the ability of any
US Entity to perform its obligations under the Facility Documents to which is a
party.
The opinions expressed herein are solely for your benefit in
connection with the transactions referred to in the Credit Agreement and may not
be circulated to, or relied upon by, any other Person, except that it may be
circulated to any prospective Lender in accordance with the Credit Agreement and
may be relied upon by any Person who, in the future, becomes a Lender; provided
that each Lender may provide this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their normal
examination, (ii) to its professional advisers, (iii) pursuant to an order or
legal process of any court or governmental agency, or (iv) in connection with
any legal action to which such Lender is a party
-2-
arising out of the transactions contemplated by the Credit Agreement. The
opinions expressed herein are as of the date hereof, and I make no undertaking
to supplement such opinions as facts and circumstances come to my attention or
changes in law occur which could affect such opinions.
Very truly yours,
----------------------------------------
Xxxxxxx X. Xxxxxx
General Counsel
-3-
EXHIBIT C-2
(Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP)
December 15, 2005
To the Lenders party to the
Credit Agreement referred to below
and JPMorgan Chase Bank, N.A., as Agent
Ladies and Gentlemen:
We have acted as special counsel to Movado Group, Inc., a New York
corporation (the "Parent Borrower"), MGI Luxury Group S.A., a corporation
organized under the laws of Switzerland ("MGI"), Movado Watch Company SA, a
corporation organized under the laws of Switzerland ("Movado S.A." and, together
with MGI, the "Foreign Subsidiary Borrowers"), Movado Retail Group Inc., a New
Jersey corporation ("Movado Retail"), and Movado LLC, a Delaware limited
liability company ("Movado LLC" and, together with Movado Retail, the Parent
Borrower and the Foreign Subsidiary Borrowers, the "Principal Parties"), in
connection with the Credit Agreement (the "Credit Agreement") dated as of the
date hereof, among the Parent Borrower, the Foreign Subsidiary Borrowers, the
financial institutions listed on the signature pages of the Credit Agreement
(the "Lenders") and JPMorgan Chase Bank, N.A., as Administrative Agent, as
Swingline Bank and as Issuing Bank (the "Agent Bank"). This opinion is being
furnished to you at the request of the Parent Borrower as provided by Section
5.1(i) of the Credit Agreement. Capitalized terms used and not otherwise defined
have the respective meanings given those terms in the Credit Agreement.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents, each dated as of the date of this letter (collectively, the
"Documents"):
1. the Credit Agreement;
2. the Syndicated Loan Notes issued on the date hereof;
3. the Subsidiary Guarantee by Movado Retail in favor of the Lenders
and the Agent Bank (the "Retail Guarantee");
4. the Subsidiary Guarantee by Movado LLC in favor of the Lenders
and the Agent Bank (the "LLC Guarantee" and, together with the
Retail Guarantee, the "Initial Subsidiary Guarantees"); and
5. the Parent Guarantee by the Parent Borrower in favor of the
Lenders and the Agent Bank (the "Parent Guarantee").
In our examination of the documents referred to above, we have
assumed, without independent investigation, the genuineness of all signatures,
the legal capacity of all individuals who have executed any of the documents
reviewed by us, the authenticity of all documents (including the Documents)
submitted to us as originals, the conformity to the originals of all documents
submitted to us as certified, photostatic, reproduced or conformed copies of
valid existing agreements or other documents, the authenticity of the latter
documents and that the statements regarding matters of fact in the certificates,
records, agreements, instruments and documents that we have examined are
accurate and complete. We have also assumed, without independent investigation,
the enforceability of the Documents against each party other than the Principal
Parties.
In addition, in the case of each Principal Party, we have assumed,
without independent investigation, that (i) such Principal Party is validly
existing and in good standing under the laws of its jurisdiction of
organization, (ii) such Principal Party has all necessary
-2-
corporate or limited liability company power, as applicable, and authority to
execute, deliver and perform its obligations under each Document to which it is
a party, (iii) the execution, delivery and performance of each Document have
been duly authorized by all necessary corporate or limited liability company
action, as applicable, and do not violate its charter or other organizational
documents or the laws of its jurisdiction of organization (except New York law)
and (iv) each Document has been duly executed and delivered by it under the laws
of its jurisdiction of organization.
Based upon the foregoing, and subject to the assumptions, exceptions,
and qualifications stated below, we are of the opinion that:
1. Each Document to which any Principal Party is a party is a legal,
valid and binding obligation of such Principal Party, enforceable against such
Principal Party in accordance with its terms.
2. The execution and delivery by each Principal Party of each of the
Documents to which it is a party and the performance by such Principal Party of
its obligations under the Documents do not violate or result in a breach of or
default under any Covered Law (as defined below) (including Regulations U or X
of the Board of Governors of the Federal Reserve System of the United States).
3. No authorizations or approvals of, and no filings with, any
governmental or regulatory authority or agency are necessary under any Covered
Law for the execution, delivery or performance by any Principal Party of the
Documents to which it is a party.
This opinion is subject to the following assumptions, exceptions and
qualifications:
(a) The enforceability of the Documents may be: (i) subject to
-3-
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally; and (ii)
subject to general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(b) We express no opinion as to: (i) the enforceability of any
provisions in the Initial Subsidiary Guarantees and the Parent Guarantee (the
"Guarantees") purporting to preserve and maintain the liability of any party to
the Guarantees despite the fact that the guarantied debt is unenforceable due to
illegality; (ii) the enforceability of any provisions contained in the Documents
that purport to establish (or may be construed to establish) evidentiary
standards; (iii) the enforceability of forum selection clauses in the federal
courts; (iv) the enforceability of any provisions contained in the Documents
that purport to relinquish a Principal Party's right to a trial by jury or to
waive immunity; or (v) judgment currency clauses to the extent they are
inconsistent with Section 27(b) of the N.Y. Judiciary Law.
This opinion is limited to the laws of the State of New York and
the federal laws of the United States of America that, in each case, in our
experience, are normally applicable to credit transactions of the type
contemplated by the Credit Agreement (collectively, the "Covered Laws"). This
opinion is rendered only with respect to the laws, and the rules, regulations
and orders under those laws, that are currently in effect.
This opinion is furnished by us solely for your benefit in
connection with the transactions referred to in the Credit Agreement and may not
be circulated to, or relied upon by, any other Person, except that it may be
circulated to any prospective Lender in accordance with the Credit Agreement and
may be relied upon by any Person who, in the future, becomes a Lender; provided
that each Lender may provide a copy of this opinion (i) to bank examiners and
other regulatory authorities should they so request or in connection with their
normal
-4-
examination, (ii) to the professional advisers of any Lender, (iii) pursuant to
an order or legal process of any court or governmental agency, or (iv) in
connection with any legal action to which such Lender is a party arising out of
the transactions contemplated by the Credit Agreement.
Very truly yours,
XXXX, WEISS, RIFKIND, XXXXXXX &
XXXXXXXX LLP
-5-
EXHIBIT C-3
(Form of Opinion of Swiss Counsel to the Foreign Subsidiary Borrowers)
BY E-MAIL - BY COURIER
The Lenders party to the Agreement
referred to below and
JPMorgan Chase Bank, N.A. as Agent
December 15, 2005 XXX - FIC
309164 - XXX - 000037.doc
MOVADO GROUP, INC., MOVADO WATCH COMPANY AND MGI LUXURY GROUP S. A. AS
BORROWERS - CREDIT AGREEMENT
Ladies and Gentlemen
We have acted as special Swiss counsel to MGI Luxury Group S.A. and Movado
Watch Company SA (the SWISS OBLIGORS) in connection with the Credit
Agreement dated as of the date hereof (the AGREEMENT) between Movado Group,
Inc. (the PARENT), the Swiss Obligors, JPMorgan Chase Bank, N.A., as
Administrative Agent, as Swingline Bank and as Issuing Bank (the AGENT),
and the Lenders specified therein. As such counsel, we have been requested
to give our opinion as to certain legal matters relating to the Agreement.
Capitalized terms used herein shall have the meaning attributed to them in
the Agreement unless otherwise defined herein.
I. BASIS OF OPINION
This opinion is confined to and given on the basis of the laws of
Switzerland in force at the date hereof as currently applied by the Swiss
courts. In the absence of explicit statutory law or established case law,
we base our opinion solely on our independent professional judgement. This
opinion is also confined to:
(i) the matters stated herein and is not to be read as extending, by
implication or otherwise, to any agreement or document referred to in
the Agreement (other than listed below) or any other matter; and
(ii) the documents listed below.
For purposes of this opinion we have not conducted any due diligence or
similar investigation as to factual circumstances, which are or may be
referred to in the documents below, and we express no opinion as to the
accuracy of representations and warranties of facts set out in such
documents or the factual background assumed therein.
For the purpose of giving this opinion, we have only examined originals or
copies of the following documents (collectively the DOCUMENTS):
(i) execution copy of the Agreement dated December 15, 2005;
(ii) copies of the articles of incorporation (Statuten) of each of
- MGI Luxury Group S.A., dated as of November 22, 2005;
- Movado Watch Company SA, dated as of February 4, 2004;
(collectively the ARTICLES);
(iii) copies of certified excerpts from the relevant Registers of Commerce
for each of the following Swiss Obligors:
- from the Register of Commerce of the Canton of Berne for MGI
Luxury Group S.A., dated as of December 9, 2005;
- from the Register of Commerce of the Canton of Solothurn for
Movado Watch Company SA, dated as of December 9, 2005;
(collectively the EXCERPTS);
(iv) a copy of the resolution of the board of directors of each of
- MGI Luxury Group S.A., dated as of December 15, 2005;
- Movado Watch Company SA, dated as of December 15, 2005;
(collectively the BOARD RESOLUTIONS); and
(v) a copy of the resolution of the shareholders meeting of each of
- MGI Luxury Group S.A., dated as of December 15, 2005;
- Movado Watch Company SA, dated as of December 15, 2005;
(collectively the SHAREHOLDERS' RESOLUTIONS).
No documents have been reviewed by us in connection with this opinion other
than those listed above. Accordingly, we shall limit our opinion to the
above Documents and their legal implications on the Agreement under Swiss
law.
In this opinion, Swiss legal concepts are expressed in English terms and
not in their original language. These concepts may not be identical to the
concepts described by the same English terms as they exist under the laws
of other jurisdictions.
II. ASSUMPTIONS
In rendering the opinion below, we have assumed:
(a) the conformity to the original Documents of all Documents produced to
us as copies, fax copies or via e-mail, and that the original was
executed in the manner appearing on the copy;
(b) the genuineness and authenticity of the signatures on all original
Documents or copies thereof which we have examined, and the accuracy
of all factual information contained in, or material statements given
in connection with, the Documents;
(c) the Agreement is within the capacity and power of, and has been
validly authorized, executed and delivered by and is binding on all
parties thereto other than the Swiss Obligors;
(d) the performance by all parties to the Agreement of all obligations by
which they are respectively bound under the Agreement and the
compliance of all the parties to the Agreement with all matters of
validity and enforceability under any law other than the laws of
Switzerland;
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(e) that the Agreement will be valid, binding and enforceable under the
law of the State of New York by which it is expressed to be governed
and that the choice of the law of the State of New York and of the
jurisdiction of the New York state or United States federal courts
provided in the Agreement is valid under the law of the State of New
York;
(f) that as far as any obligation under the Agreement is required to be
performed in any jurisdiction outside of Switzerland, its performance
will not be illegal or unenforceable by virtue of the laws of such
jurisdiction;
(g) that, except as expressly opined upon herein, all representations and
warranties made by any one of the parties of the Agreement are true
and accurate;
(h) that the Excerpts and the Articles are correct, complete and
up-to-date;
(i) that all parties entered into the Agreement for bona fide commercial
reasons and on arm's length terms, and that none of the directors or
officers of the respective party has or had a conflict of interest
with such party in respect of the Documents that would preclude him
from validly representing (or granting a power of attorney in respect
of the Documents for) the respective party;
(j) that the Board Resolutions (i) have been duly resolved in meetings
duly convened and otherwise in the manner set forth therein, and (ii)
have not been rescinded or amended and are in full force and effect.
III. OPINION
Based on the foregoing and subject to the qualifications set out below, we
are of the opinion that as of the date hereof:
1. Each of the Swiss Obligors is a corporation duly incorporated and validly
existing under the laws of Switzerland with all requisite corporate power
and authority to own its properties and to carry on its business as
presently conducted.
2. Each of the Swiss Obligors has the corporate power to enter into the
Agreement, and the Agreement has been duly authorized by each of the Swiss
Obligors.
3. The execution, delivery and performance by the Swiss Obligors of the
Agreement do not violate any provision of the Articles or any laws of
Switzerland applicable to the Swiss Obligors.
4. The obligations under the Agreement will constitute direct and
unsubordinated obligations of the Swiss Obligors and will at least rank
pari passu with any other unsecured, unsubordinated obligations of the
Swiss Obligors (whether actual or contingent) outstanding from time to
time, subject to any statutory preferences under applicable law.
5. The choice of the law of the State of New York as the governing law of the
Agreement is a valid choice of law under the laws of Switzerland and in any
action brought before a court of competent jurisdiction in Switzerland, the
law of the State of New York would be recognized and applied by such court
to all issues for which under the conflict of laws rules of Switzerland the
proper or governing law of a contract is applicable provided, however, that
a Swiss court would apply procedural rules.
6. The submission by the Swiss Obligors to the jurisdiction of the New York
state courts and the United States federal courts contained in the
Agreement is valid and legally binding on the Swiss Obligors under the laws
of Switzerland.
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7. The courts of Switzerland will recognise as valid, and will enforce, any
final and non-appealable civil judgment for a monetary claim obtained in a
New York state court or a United States federal court against the Swiss
Obligors.
8. The designation by the Swiss Obligors of Corporation Service Company as
agent to receive service of process in New York state or United States
federal courts on their behalf is valid and binding under the laws of
Switzerland, as long as Corporation Service Company is properly acting as
agent for service of process and its mandate has not been revoked.
9. The Swiss Obligors are not required by law in relation to any sums payable
under the Agreement or the payment of fees by the Swiss Obligors to the
Agent to make, or cause to be made, any deduction or withholding for or on
account of any taxes imposed or levied by or on behalf of Switzerland or
any political subdivision or any taxing authority thereof or therein.
10. No Swiss stamp duty on the issuance of securities (Emissionsabgabe) and no
Swiss stamp duty on the turnover of securities (Umsatzabgabe) will be
payable to any governmental authority of Switzerland in connection with the
execution and delivery of the Agreement and the making available of the
facility in accordance therewith.
11. No Swiss Obligor has any immunity from suit or proceedings or the
enforcement of any judgment (whether on the grounds of sovereign immunity
or otherwise) under the laws of Switzerland.
12. To ensure the validity and enforceability or admissibility in evidence of
the Agreement, it is not necessary that the Agreement be approved,
authorized, filed or recorded with any governmental, administrative or
other authority or court in Switzerland.
13. It is not necessary under Swiss law (i) in order to be entitled the full
access as plaintiff to the courts of competent jurisdiction of Switzerland
or any political subdivision thereof for the enforcement of any right,
power or remedy accorded in, under or in connection with the Agreement, or
(ii) by reason only of the execution, delivery or performance of the
Agreement, that any of the Lenders or the Agent should be licensed,
qualified or entitled to carry on business in Switzerland.
14. None of the Lenders or the Agent will be deemed to be resident, domiciled
or carrying on business in Switzerland by reason only of the execution,
delivery, performance and/or enforcement of the Agreement.
IV. QUALIFICATIONS
The above opinions are subject to the following qualifications:
(a) We are members of the Zurich bar and do not hold ourselves to be
experts in any laws other than the laws of Switzerland. Accordingly,
we are opining herein as to Swiss law only and we express no opinion
with respect to the applicability thereto, or the effect thereon, of
the laws of any other jurisdiction.
(b) Where we refer to enforceability, we only express an opinion as to
enforceability under the rules of procedure applicable in Switzerland.
Enforceability of the Agreement may be limited by applicable
bankruptcy, insolvency, reorganisation or similar laws affecting
creditors and secured parties in general (including, without
limitation, provisions relating to voidable preferences), laws or
equitable principles of general application (including, but not
limited to, the abuse of rights (Rechtsmissbrauch) and the principle
of good faith (Grundsatz xxx Xxxx und Glauben)), and public policy, as
defined in Art. 17-19 of the Swiss Private International Law Act of
December 18, 1987, as amended (the PRIVATE INTERNATIONAL LAW ACT).
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Enforcement before the courts of Switzerland will in any event be
subject to:
(i) the nature of the remedies available in the Swiss courts (and
nothing in this opinion must be taken as indicating that specific
performance (other than for the payment of a sum of money) or
injunctive relief would be available as remedies for the
enforcement of such obligations); and
(ii) the acceptance of such courts of jurisdiction and the power of
such courts to stay proceedings if concurrent proceedings are
being brought elsewhere.
(c) Claims may become barred under statutes of limitation or prescription,
or may be or become subject to available defences such as set-off,
counterclaim, misrepresentation, material error, duress or fraud.
Further, limitations may apply with respect to any indemnification and
contribution undertakings by the Swiss Obligors if a court considers
any act of the indemnified person as wilful or negligent, and an
obligation to pay an amount may be unenforceable if the amount is held
to constitute an excessive penalty (such as exemplary or punitive
damages).
(d) The enforceability in Switzerland of a foreign judgment rendered
against any Swiss Obligor is subject to the limitations set forth in
(x) the Convention on Jurisdiction and Enforcement of Judgements in
Civil and Commercial Matters of September 16, 1988 (the LUGANO
CONVENTION), (y) such other international treaties under which
Switzerland is bound, and (z) the Private International Law Act. In
particular, and without limitation to the foregoing, a judgment
rendered by a foreign court may only be enforced in Switzerland if:
(i) (in case of (y) and (z) and, in certain exceptional cases, (x))
the foreign court had jurisdiction;
(ii) the judgment of such foreign court has become final and
non-appealable, or, in the case of (x), has become enforceable at
an earlier stage;
(iii) the court procedures leading to the judgment followed the
principles of due process of law, including proper service of
process; and
(iv) the judgment of the foreign court on its merits does not violate
Swiss law principles of public policy.
In addition, enforceability of a judgment by a non-Swiss court in
Switzerland may be limited if the Company can demonstrate that it was
not effectively served with process.
(e) Enforcement claim or court judgment under Swiss debt collection or
bankruptcy proceedings may only be made in Swiss francs and the
foreign currency amount must accordingly be converted into Swiss
francs at the rate obtained, with respect to the enforcing creditor,
on (i) the date of instituting the enforcement proceedings or (ii) the
date of the filing for the continuation of the bankruptcy procedure
(Fortsetzungsbegehren) and, with respect to non-enforcing creditors,
at the rate obtained at the time of the adjudication of bankruptcy
(Konkurseroffnung).
(f) Section 4.5 of the Agreement (Tax gross-up) provides for the gross-up
of payments to the extent withholding tax is imposed on payments of a
Swiss Obligor pursuant to the terms of the Agreement. This obligation
may violate Article 14 of the Swiss Federal Withholding Tax Act of
October 13, 1965 (the WITHHOLDING TAX ACT) which stipulates that (i)
Swiss withholding tax (Verrechnungssteuer) to be withheld from any
payment must be charged to the recipient of the payment, and (ii)
contradictory agreements are null and void as to this issue. The Swiss
Federal Tax Administration proclaimed that gross-up provisions are
compliant with Article 14 of the Withholding Tax Act if (i) the
obligor promises a minimum interest rate in the interest rate clause
of the agreement which, under the condition of imposition of Swiss
withholding tax, is to be adjusted in correspondence with the tax
withheld, (ii) and, hence, Swiss withholding tax indeed is calculated
on the basis of the
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grossed-up net amount received by the creditor, (iii) the obligor
promises the creditor to provide sufficient documentation potentially
enabling the creditor to recover Swiss withholding tax, and (iv) the
parties could in good faith assume at the time of entering into the
agreement that payments under the agreement were not subject to Swiss
withholding tax. A Swiss court ruling on the validity or
enforceability of the said gross-up provisions will, however, not be
bound by the Swiss Federal Tax Administration's interpretation of
Article 14 of the Withholding Tax Act.
(g) The opinions set forth in Sections III. 9. and III. 10. above are
subject to the qualification that the Swiss Obligors at all times
comply with the ten and twenty non-bank rules pursuant to the present
practice of the Swiss Federal Tax Administration.
(h) The enforcement of any guarantee, indemnity or other obligation of any
Swiss Obligor for, or with respect to, any obligation of any other
obligor may be limited to the freely disposable shareholders' equity
of such Swiss Obligor. Such freely disposable shareholder equity shall
be determined in accordance with Swiss law and Swiss accounting
principles and shall correspond to the amount of the relevant Swiss
Obligor's total shareholder equity less the total of (i) its aggregate
share capital and (ii) its statutory reserves (including reserves for
its own shares and revaluations as well as paid-in capital surplus) at
the time of the start of the proceedings for enforcement. In addition,
Swiss withholding tax of 35 percent may be levied on payments under a
guarantee, indemnity or other obligation by a Swiss Obligor for, or
with respect to, any obligation of any other obligor if the Swiss
Federal Tax Administration deems such payment a dividend or similar
distribution.
(i) We express no opinion as to the validity, binding effect and
enforceability of the irrevocability of any power of attorney or
appointment of an agent if such power of attorney or appointment has
been revoked.
(j) Further, we express no opinion as to banking regulatory matters or as
to any commercial, accounting, calculating, auditing or other
non-legal matter. Except as expressed in opinions III. 9. and III. 10.
above, we express no opinion as to tax matters.
(k) A determination, calculation or certificate as to any matter may be
held by a Swiss court not to be final, conclusive or binding if such
determination, calculation or certification were shown to have an
unreasonable, incorrect or arbitrary basis or not to have been given
or made in good faith.
* * *
We have issued this opinion as of the date hereof and we assume no
obligation to advise you of any changes that are made or brought to our
attention hereafter.
This opinion may be relied upon by you in your respective
capacity set forth in the Agreement in connection with the matters set forth
herein. Without our prior written consent, it may not be furnished or quoted to
other persons, and it may not be relied upon by you, in any other capacity or
for any other purpose. No other person may rely on this opinion for any purpose.
You are requested not to give copies to third parties or otherwise make the
contents of this opinion public without our prior written consent; provided that
each Lender may provide a copy of this opinion (i) to bank examiners and other
regulatory authorities should they so request or in connection with their normal
examination, (ii) to the professional advisers of any Lender, (iii) pursuant to
an order or legal process of any court or governmental agency, or (iv) in
connection with any legal action to which such Lender is a party arising out of
the transactions contemplated by the Credit Agreement.
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This opinion is governed by and shall be construed in accordance with the laws
of Switzerland. We confirm our understanding that all disputes arising out of or
in connection with this opinion shall be subject to the exclusive jurisdiction
by the District Court of Zurich, Switzerland.
Sincerely yours,
HOMBURGER RECHTSANWALTE
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EXHIBIT D-1
SUBSIDIARY GUARANTEE
REFERENCE IS HEREBY MADE to the Credit Agreement dated as of December
15, 2005 (which, as the same has heretofore been or may hereafter be amended
from time to time, will be called herein the "Credit Agreement") among Movado
Group, Inc., a New York corporation (the "Parent"), Movado Watch Company SA
("MWC"), MGI Luxury Group S.A. ("Luxury"), the Lenders party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent, as Swingline Bank and as
Issuing Bank. All capitalized terms used herein and not defined shall have the
respective meanings ascribed to them in the Credit Agreement.
WHEREAS, the Credit Agreement provides for the extension of credit by
the Lenders, the Swingline Bank and the
Issuing Bank (all of which, together with the Administrative Agent,
will be called herein the "Creditors") to the Parent; and
WHEREAS, all the obligations and liabilities (whether now existing or
hereafter arising) of the Parent to any or all of the Creditors under the Credit
Agreement or any of the other Facility Documents (including without limitation
the Parent Guarantee), whether for principal, interest, fees, reimbursement
obligations, indemnification obligations, costs of enforcement or otherwise,
will be called herein the "Obligations" (for the avoidance of doubt, the term
"Obligations" includes any increase in such obligations and liabilities
resulting from an increase in the Total Revolving Credit Commitment pursuant to
Section 2.16 of the Credit Agreement); and
WHEREAS, [_____] (the "Guarantor") expects to obtain substantial
economic benefit from the extension of credit by the Creditors to the Parent
under the Credit Agreement; and
WHEREAS, the execution and delivery of this Subsidiary Guarantee by
the Guarantor is required pursuant to the terms of the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Creditors to
extend credit to the Parent under the Facility Documents, the Guarantor hereby
agrees with the Creditors as follows:
1. The Guarantor hereby unconditionally guarantees to the Creditors
that the Parent will promptly pay, perform and observe all the Obligations, and
that all sums stated to be payable in, or which become payable under, the
Facility Documents by the Parent will be promptly paid in full when due, whether
at stated maturity or earlier by reason of acceleration or otherwise, and, in
the case of one or more extensions of time of payment or performance or renewals
of any Obligation, that the same will be promptly paid or performed (as the case
may be) when due according to such extension or renewal, whether at stated
maturity or earlier by reason of acceleration or otherwise, irrespective of the
validity, regularity, or enforceability of any of the Facility Documents or any
of the Obligations and irrespective of any present or future law or order of any
government (whether of right or in fact and whether the Creditors shall have
consented thereto) or of any agency thereof purporting to reduce, amend,
restructure or otherwise
affect any Obligation of the Parent or other obligor or to vary the terms of
payment; provided, however, that the liability of the Guarantor hereunder with
respect to the Obligations shall be limited to an aggregate amount equal to the
largest amount that would not render such liability subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
2. The Guarantor agrees that, as among the Guarantor and the
Creditors, the Obligations may be declared to be due and payable for purposes of
this Subsidiary Guarantee notwithstanding any stay, injunction or other
prohibition which may prevent, delay or vitiate any such declaration as against
the Parent and that, in the event of any such declaration (or attempted
declaration), such Obligations (whether or not due and payable by the Parent)
shall forthwith become due and payable by the Guarantor for purposes of this
Subsidiary Guarantee. The Guarantor further guarantees that all payments made by
the Parent to the Creditors of any Obligation will, when made, be final and
agrees that if any such payment is recovered from, or repaid by, any Creditor in
whole or in part in any bankruptcy, insolvency or similar proceeding instituted
by or against the Parent, this Subsidiary Guarantee shall continue to be fully
applicable to such Obligation to the same extent as though the payment so
recovered or repaid had never been originally made on such Obligation.
3. This Subsidiary Guarantee is a guaranty of payment and not of
collection only and shall apply to all Obligations whenever arising.
4. The Guarantor hereby consents that from time to time, without
notice to or further consent of the Guarantor, the payment, performance or
observance of any or all of the Obligations may be waived or the time of payment
or performance thereof extended or accelerated, or renewed in whole or in part,
or the terms of the Facility Documents or any part thereof may be changed
(including, without limitation, an increase or decrease in the Total Revolving
Credit Commitment or any Lender's Revolving Credit Commitment or rate of
interest thereon) and any collateral therefor may be exchanged, surrendered or
otherwise dealt with as the Creditors may determine, and any of the acts
mentioned in the Facility Documents may be done, all without affecting the
liability of the Guarantor hereunder. The Guarantor hereby waives presentment of
any instrument, demand of payment, protest and notice of non-payment or protest
thereof or of any exchange, sale, surrender or other handling or disposition of
such collateral, and any requirement that any Creditor exhaust any right, power
or remedy or proceed against the Parent under the Facility Documents or against
any other person under any other guaranty of, or security for, any of the
Obligations. The Guarantor hereby further waives any defense whatsoever which
might constitute a defense available to, or discharge of, the Parent or a
guarantor. No payment by the Guarantor pursuant to any provision hereunder shall
entitle the Guarantor, by subrogation to the rights of any Creditor or
otherwise, to any payment by the Parent (or out of the property of the Parent)
except after payment in full of all sums (including interest, costs and
expenses) which may be or become payable by the Parent to the Creditors at any
time or from time to time.
5. This Subsidiary Guarantee shall be a continuing guaranty, and any
other guarantor, and any other party liable upon or in respect of any Obligation
hereby guaranteed, may be released without affecting the liability of the
Guarantor hereunder. The liability of the
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Guarantor hereunder shall be joint and several with the liability of any other
guarantor or other party upon or in respect of the Obligations.
6. Any Creditor may assign its rights and powers hereunder, with all
or any of the Obligations, and, in the event of such assignment, the assignee
hereof or of such rights and powers, shall have the same rights and remedies as
if originally named herein. The Guarantor may not assign or transfer any of its
rights or obligations under this Subsidiary Guarantee without the written
approval of all the Lenders (and any such assignment or transfer that is
attempted without such consent shall be void).
7. Notice of acceptance of this Subsidiary Guarantee and of the
incurring of any and all of the Obligations of the Parent pursuant to the
Facility Documents is hereby waived. This Subsidiary Guarantee and all rights,
obligations and liabilities arising hereunder shall be governed by and construed
according to the law of the State of New York. Unless the context otherwise
requires, all terms used herein which are defined in the Uniform Commercial Code
shall have the meanings therein stated.
8. The Guarantor agrees that, in addition to (and without limitation
of) any right of setoff, banker's lien or counterclaim any Creditor may
otherwise have, each of the Creditors shall be entitled, at its option, to set
off and apply balances (general or special, time or demand, provisional or
final) held by it for account of the Guarantor at any of its offices in dollars
or in any other currency, against any amounts owing hereunder that are not paid
when due (regardless of whether such balances are then due to the Guarantor), in
which case it shall promptly notify the Guarantor thereof; provided, however,
that any failure to give such notice shall not affect the validity thereof.
9. No provision of this Subsidiary Guarantee may be modified or waived
without the prior written consent of the Administrative Agent and the Required
Lenders (or, to the extent required by the Credit Agreement, all Lenders).
10. Without limiting the rights of any Creditor under any other
agreement, any financial accommodation (including, without limitation, interest
accruing at the agreed to contract rate after the commencement of any
bankruptcy, reorganization or similar proceeding) extended by the Guarantor to
or for the account of the Parent, or in respect of which the Parent may be
liable to the Guarantor in any capacity, is hereby subordinated to all the
Obligations, and such financial accommodation of the Guarantor to the Parent, if
the Administrative Agent so requests, shall be collected, enforced and received
by the Guarantor as trustee for the Creditors and be paid over to the
Administrative Agent on account of the Obligations but without reducing or
affecting in any manner the liability of the Guarantor, under the other
provisions of this Subsidiary Guarantee.
11. The Guarantor hereby agrees that if any Subsidiary Guarantor party
to any other Subsidiary Guarantee shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any of the
Obligations guaranteed thereunder and hereunder (the "Guaranteed Obligations"),
then the Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to the Guarantor's Pro Rata Share (as defined below and determined, for
this
-3-
purpose, without reference to the properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
the Guaranteed Obligations. The payment obligation of the Guarantor to any
Excess Funding Guarantor under this paragraph shall be subordinate and subject
in right of payment to the prior payment in full of the obligations of each
Subsidiary Guarantor under the Subsidiary Guarantee to which it is a party and
no Excess Funding Guarantor shall exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.
For purposes of this paragraph, (i) "Excess Funding Guarantor" means, in respect
of any Guaranteed Obligations, any Subsidiary Guarantor that has paid an amount
in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess
Payment" means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) "Pro Rata Share" means, for any Subsidiary Guarantor, the
ratio (expressed as a percentage) of (x) the amount by which the aggregate fair
saleable value of all properties of such Subsidiary Guarantor (excluding any
shares of stock or other equity interest of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all properties of the Parent and all of the Subsidiary Guarantors
exceeds the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Obligors hereunder and under the other Loan Documents) of all
of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the Closing Date, as of the Closing Date,
and (B) with respect to any other Subsidiary Guarantor, as of the date such
Subsidiary Guarantor becomes a Subsidiary Guarantor under a Subsidiary
Guarantee.
12. The Guarantor hereby irrevocably submits to the jurisdiction of
any New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Subsidiary Guarantee, and the
Guarantor hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Guarantor irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the
Guarantor at its address specified on the signature page hereof. The Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this paragraph shall affect the
rights of the Creditors to serve legal process in any other manner permitted by
law or affect the rights of the Creditors to bring any action or proceeding
against the Guarantor or any of its property in the courts of any other
jurisdiction. To the extent that the Guarantor has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Guarantor
hereby irrevocably waives such immunity in respect of its Obligations under this
Subsidiary Guarantee. The Guarantor hereby expressly waives any and every right
to a trial by jury in any action on or related to this Subsidiary Guarantee, the
Obligations or the enforcement of either or all of the same, and does further
expressly waive any and every right to interpose any counterclaim in any such
action or proceeding. To the extent permitted by applicable law, the Guarantor
shall not assert, and the Guarantor hereby waives, any claim against any
Indemnitee, on any theory of liability, for
-4-
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Subsidiary Guarantee, any other Facility Document or any agreement or instrument
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. The Guarantor agrees to reimburse the Creditors on demand for
all reasonable and documented costs, expenses, and charges (including, without
limitation, reasonable and documented attorneys' fees) incurred by the
Administrative Agent or the Lenders in connection with any enforcement of this
Subsidiary Guarantee.
13. The rights, powers and remedies granted to the Creditors herein
shall be cumulative and in addition to any rights, powers and remedies to which
the Creditors may be entitled either by operation of law or pursuant to the
Facility Documents or any other document or instrument delivered or from time to
time to be delivered to the Administrative Agent or any Lender in connection
with the Facility Documents.
14. When all Obligations shall have been paid in full (other than
contingent obligations that survive the termination of the Credit Agreement) and
the Commitments and L/C Exposures of all the Lenders under the Credit Agreement
shall have expired or been terminated, the obligations of the Guarantor under
this Subsidiary Guarantee shall terminate; provided that, thereafter the
obligations of the Guarantor hereunder shall be automatically reinstated if and
to the extent that for any reason any payment by or on behalf of the Parent in
respect of the Obligations guaranteed hereunder is rescinded or must be
otherwise restored by any holder of such Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Guarantor
agrees that it will indemnify the Administrative Agent and each other Creditor
on demand for all reasonable and documented costs and expenses (including,
without limitation, reasonable and documented fees and expenses of counsel)
incurred by the Administrative Agent or any other Creditor in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
-5-
IN WITNESS WHEREOF, the Guarantor has caused this Subsidiary Guarantee
to be duly executed by its proper officer(s) this ___ day of _________, 200_.
[NAME OF GUARANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address of Guarantor:
000 Xxxx Xxxx Xxxxxxx,
Xxx Xxxxxx 00000
-6-
EXHIBIT D-2
PARENT GUARANTEE
REFERENCE IS HEREBY MADE to the Credit Agreement dated as of December
15, 2005 (which, as the same has heretofore been or may hereafter be amended
from time to time, will be called herein the "Credit Agreement") among Movado
Group, Inc., a New York corporation (the "Parent"), Movado Watch Company SA
("MWC"), MGI Luxury Group S.A. ("Luxury"), the Lenders party thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent, as Swingline Bank and as
Issuing Bank. All capitalized terms used herein and not defined shall have the
respective meanings ascribed to them in the Credit Agreement.
WHEREAS, the Credit Agreement provides for the extension of credit by
the Lenders (all of which, together with any domestic or foreign branch or
Affiliate thereof through which any Loan is made and the Administrative Agent,
will be called herein the "Creditors") to MWC and to Luxury (the "Foreign
Subsidiary Borrowers"); and
WHEREAS, all the obligations and liabilities (whether now existing or
hereafter arising) of either or both of the Foreign Subsidiary Borrowers to any
or all of the Creditors under the Credit Agreement or any of the other Facility
Documents (whether for principal, interest, fees, reimbursement obligations,
indemnification obligations, costs of enforcement or otherwise) will be called
herein the "Obligations" (for the avoidance of doubt, the term "Obligations"
includes any increase in such obligations and liabilities resulting from an
increase in the Total Revolving Credit Commitment pursuant to Section 2.16 of
the Credit Agreement); and
WHEREAS, the Parent expects to obtain substantial economic benefit
from the extension of credit by the Creditors to the Foreign Subsidiary
Borrowers under the Credit Agreement; and
WHEREAS, the execution and delivery of this Parent Guarantee by the
Parent is required pursuant to the terms of the Credit Agreement;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Creditors to
extend credit to the Foreign Subsidiary Borrowers under the Facility Documents,
the Parent hereby agrees with the Creditors as follows:
1. The Parent hereby unconditionally guarantees to the Creditors that
each Foreign Subsidiary Borrower will promptly pay, perform and observe all the
Obligations of such Foreign Subsidiary Borrower, and that all sums stated to be
payable in, or which become payable under, the Facility Documents by either or
both of the Foreign Subsidiary Borrowers will be promptly paid in full when due,
whether at stated maturity or earlier by reason of acceleration or otherwise,
and, in the case of one or more extensions of time of payment or performance or
renewals of any Obligation, that the same will be promptly paid or performed (as
the case may be) when due according to such extension or renewal, whether at
stated maturity or earlier by reason of acceleration or otherwise, irrespective
of the validity, regularity, or enforceability of
any of the Facility Documents or any of the Obligations and irrespective of any
present or future law or order of any government (whether of right or in fact
and whether the Creditors shall have consented thereto) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any Obligation of
the Foreign Subsidiary Borrower or other obligor or to vary the terms of
payment.
2. The Parent agrees that, as among the Parent and the Creditors, the
Obligations may be declared to be due and payable for purposes of this Parent
Guarantee notwithstanding any stay, injunction or other prohibition which may
prevent, delay or vitiate any such declaration as against either or both of the
Foreign Subsidiary Borrowers and that, in the event of any such declaration (or
attempted declaration), such Obligations (whether or not due and payable by
either or both of the Foreign Subsidiary Borrowers) shall forthwith become due
and payable by the Parent for purposes of this Parent Guarantee. The Parent
further guarantees that all payments made by the Parent to the Creditors of any
Obligation will, when made, be final and agrees that if any such payment is
recovered from, or repaid by, any Creditor in whole or in part in any
bankruptcy, insolvency or similar proceeding instituted by or against either or
both of the Foreign Subsidiary Borrowers, this Parent Guarantee shall continue
to be fully applicable to such Obligation to the same extent as though the
payment so recovered or repaid had never been originally made on such
Obligation.
3. This Parent Guarantee is a guaranty of payment and not of
collection only and shall apply to all Obligations whenever arising.
4. The Parent hereby consents that from time to time, without notice
to or further consent of the Parent, the payment, performance or observance of
any or all of the Obligations may be waived or the time of payment or
performance thereof extended or accelerated, or renewed in whole or in part, or
the terms of the Facility Documents or any part thereof may be changed
(including, without limitation, an increase or decrease in the Foreign Currency
Sublimit Dollar Amount, Total Revolving Credit Commitment or any Lender's
Revolving Credit Commitment or rate of interest thereon) and any collateral
therefor may be exchanged, surrendered or otherwise dealt with as the Creditors
may determine, and any of the acts mentioned in the Facility Documents may be
done, all without affecting the liability of the Parent hereunder. The Parent
hereby waives presentment of any instrument, demand of payment, protest and
notice of non-payment or protest thereof or of any exchange, sale, surrender or
other handling or disposition of such collateral, and any requirement that any
Creditor exhaust any right, power or remedy or proceed against either or both of
the Foreign Subsidiary Borrowers under the Facility Documents or against any
other person under any other guaranty of, or security for, any of the
Obligations. The Parent hereby further waives any defense whatsoever which might
constitute a defense available to, or discharge of, either or both of the
Foreign Subsidiary Borrowers or a guarantor. No payment by the Parent pursuant
to any provision hereunder shall entitle the Parent, by subrogation to the
rights of any Creditor or otherwise, to any payment by either or both of the
Foreign Subsidiary Borrowers (or out of the property of either or both of the
Foreign Subsidiary Borrowers) except after payment in full of all sums
(including interest, costs and expenses) which may be or become payable by such
Foreign Subsidiary Borrower to the Creditors at any time or from time to time.
-2-
5. This Parent Guarantee shall be a continuing guaranty, and any other
guarantor, and any other party liable upon or in respect of any Obligation
hereby guaranteed, may be released without affecting the liability of the Parent
hereunder. The liability of the Parent hereunder shall be joint and several with
the liability of any other guarantor or other party upon or in respect of the
Obligations.
6. Any Creditor may assign its rights and powers hereunder, with all
or any of the Obligations, and, in the event of such assignment, the assignee
hereof or of such rights and powers, shall have the same rights and remedies as
if originally named herein. The Parent may not assign or transfer any of its
rights or obligations under this Parent Guarantee without the written approval
of all the Lenders (and any such assignment or transfer that is attempted
without such consent shall be void).
7. Notice of acceptance of this Parent Guarantee and of the incurring
of any and all of the Obligations of either or both of the Foreign Subsidiary
Borrowers pursuant to the Facility Documents is hereby waived. This Parent
Guarantee and all rights, obligations and liabilities arising hereunder shall be
governed by and construed according to the law of the State of New York. Unless
the context otherwise requires, all terms used herein which are defined in the
Uniform Commercial Code shall have the meanings therein stated.
8. The Parent agrees that, in addition to (and without limitation of)
any right of setoff, banker's lien or counterclaim any Creditor may otherwise
have, each of the Creditors shall be entitled, at its option, to set off and
apply balances (general or special, time or demand, provisional or final) held
by it for account of the Parent at any of its offices in dollars or in any other
currency, against any amounts owing hereunder that are not paid when due
(regardless of whether such balances are then due to the Parent), in which case
it shall promptly notify the Parent thereof; provided, however, that any failure
to give such notice shall not affect the validity thereof.
9. No provision of this Parent Guarantee may be modified or waived
without the prior written consent of the Administrative Agent and the Required
Lenders (or, to the extent required by the Credit Agreement, all Lenders).
10. Without limiting the rights of any Creditor under any other
agreement, any financial accommodation (including, without limitation, interest
accruing at the agreed to contract rate after the commencement of any
bankruptcy, reorganization or similar proceeding) extended by the Parent to or
for the account of either or both of the Foreign Subsidiary Borrowers, or in
respect of which either or both of the Foreign Subsidiary Borrowers may be
liable to the Parent in any capacity, is hereby subordinated to all the
Obligations payable by such Foreign Subsidiary Borrower, and such financial
accommodation of the Parent to either or both of the Foreign Subsidiary
Borrowers, if the Administrative Agent so requests, shall be collected, enforced
and received by the Parent as trustee for the Creditors and be paid over to the
Administrative Agent on account of the Obligations payable by such Foreign
Subsidiary Borrower but without reducing or affecting in any manner the
liability of the Parent, under the other provisions of this Parent Guarantee.
-3-
11. The Parent hereby irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Parent Guarantee, and the Parent
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Parent irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the Parent
at its address specified on the signature page hereof. The Parent agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this paragraph shall affect the rights of the
Creditors to serve legal process in any other manner permitted by law or affect
the rights of the Creditors to bring any action or proceeding against the Parent
or any of its property in the courts of any other jurisdiction. To the extent
that the Parent has or hereafter may acquire any immunity from jurisdiction of
any court or from any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the Parent hereby irrevocably waives such
immunity in respect of its Obligations under this Parent Guarantee. The Parent
hereby expressly waives any and every right to a trial by jury in any action on
or related to this Parent Guarantee, the Obligations or the enforcement of
either or all of the same, and does further expressly waive any and every right
to interpose any counterclaim in any such action or proceeding. To the extent
permitted by applicable law, the Parent shall not assert, and the Parent hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Parent Guarantee, any other Facility Document or any agreement or instrument
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. The Parent agrees to reimburse the Creditors on demand for all
reasonable costs, expenses, and charges (including, without limitation,
reasonable attorneys' fees) incurred by the Administrative Agent or the Lenders
in connection with any enforcement of this Parent Guarantee.
12. The rights, powers and remedies granted to the Creditors herein
shall be cumulative and in addition to any rights, powers and remedies to which
the Creditors may be entitled either by operation of law or pursuant to the
Facility Documents or any other document or instrument delivered or from time to
time to be delivered to the Administrative Agent or any Lender in connection
with the Facility Documents.
13. When all Obligations shall have been paid in full (other than
contingent obligations that survive the termination of the Credit Agreement) and
the Commitments and L/C Exposures of all the Lenders under the Credit Agreement
shall have expired or been terminated, the obligations of the Parent under this
Parent Guarantee shall terminate; provided that, thereafter the obligations of
the Parent hereunder shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of any of the Foreign Subsidiary
Borrowers in respect of the Obligations guaranteed hereunder is rescinded or
must be otherwise restored by any holder of such Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and the
Parent agrees that it will indemnify the Administrative Agent and each other
Creditor on demand for all reasonable and documented costs and expenses
(including, without limitation, reasonable and documented fees and expenses of
counsel) incurred by the Administrative Agent or any other Creditor in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim
-4-
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
-5-
IN WITNESS WHEREOF, the Parent has caused this Parent Guarantee to be
duly executed by its proper officer this ____ day of December, 2005.
MOVADO GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address of Parent:
000 Xxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
-6-
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below, (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as, the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________
[and is an Affiliate/Approved Fund of [identify
Lender](1)]
3. Borrower(s): Movado Group, Inc., Movado Watch Company SA and MGI
Luxury S.A.
4. Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative
agent under the Credit Agreement
----------
(1) Select as applicable.
5. Credit Agreement: Credit Agreement dated as of December 15, 2005 among
Movado Group, Inc., Movado Watch Company SA, MGI
Luxury S.A., the Lenders parties thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent,
Swingline Bank and Issuing Bank
6. Assigned Interest:
Aggregate Amount of
Commitment/Loans for all Amount of Commitment/ Percentage Assigned of
Facility Assigned(2) Lenders* Loans Assigned* Commitment/Loans(3)
-------------------- ------------------------- --------------------- ----------------------
$___________ $___________ ___________%
$___________ $___________ ___________%
$___________ $___________ ___________%
[7. Trade Date: ______________](4)
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
---------------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------------
Title:
---------------------------------
[Consented to and](5) Accepted:
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
By
-------------------------------------
Title:
---------------------------------
----------
(2) Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g.
"Revolving Credit Commitment," etc.)
* Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.
(3) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(4) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
(5) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
2
[Consented to:
MOVADO GROUP, INC.
By
-------------------------------------
Title:
---------------------------------
JPMORGAN CHASE BANK, N.A.,
as Swingline Bank
By
-------------------------------------
Title:
---------------------------------
JPMORGAN CHASE BANK, N.A.,
as Issuing Bank
By
-------------------------------------
Title: ](6)
---------------------------------
----------
(6) To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Bank, Issuing Bank) is required by the terms of the Credit
Agreement.
3
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Facility Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Facility Documents or any collateral thereunder, (iii) the financial condition
of the Parent, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Facility Document or (iv) the performance or
observance by the Parent, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Facility Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to or in connection with the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and (v) if it is a
Non-U.S. Lender, attached to this Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Facility Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Facility Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
-2-
SCHEDULE I
Lenders and Revolving Credit Commitments
Lender's
Name of Lender Revolving Credit Commitment
-------------- ---------------------------
JPMorgan Chase Bank, N.A. $14,000,000
Bank of America, N.A., London $12,000,000
The Bank of New York $12,000,000
Citibank, N.A. $12,000,000
TOTAL $50,000,000
SCHEDULE II
APPLICABLE RATES
LIBOR Loan Commitment
Average Debt Coverage Ratio Spread Fee Rate
--------------------------- ---------- ----------
Category 1
Less than or equal to 1.50 0.50% 0.10%
Category 2
Greater than 1.50, but less than 0.625% 0.125%
or equal to 2.0
Category 3
Greater than 2.0, but less than or 0.75% 0.15%
equal to 2.5
Category 4
Greater than 2.5 0.875% 0.20%
SCHEDULE III
Subsidiaries of Movado Group, Inc. (Section 6.9)
SUBSIDIARIES
Bermuda:
MGI International, Ltd.
California:
North American Watch Service Corporation
Canada:
Movado Group of Canada, Inc.
Delaware:
Movado International, Ltd.
Movado LLC
Movado Group Delaware Holdings Corporation
France:
Swiss Wave Europe SA
Germany:
Movado Deutschland G.m.b.H.
Concord Deutschland G.m.b.H.
MGI Luxury Group GmbH
Hong Kong:
Swissam Ltd.
Swissam Products Ltd.
Japan:
MGI Japan Co. Ltd.
New Jersey:
EWC Marketing Corp.
Movado Retail Group, Inc.
Singapore:
Swissam Pte. Ltd.
Switzerland:
Concord Watch Company S.A.
Movado Watch Company SA
MGI Luxury Group SA
SA de l'Immeuble, rue de la Paix 000
Xxxx Xxxxxxx, XX
Xxxxxx Xxxxxxx:
MGI Luxury Group UK Limited
All issued and outstanding shares of each of the foregoing Subsidiaries are
wholly owned, directly or indirectly, by the Parent, except for statutorily
required directors qualifying shares in the case of the Hong Kong and Swiss
Subsidiaries.
-2-
SCHEDULE IV
Credit Arrangements (Section 6.10)
MOVADO GROUP, INC
BANK CREDIT LINE AND OUTSTANDING BALANCES
OCTOBER 31, 2005
SCHEDULE IV
CREDIT LINE
--------------
DOMESTIC
WORKING CAPITAL LINES (1)
JPMORGAN CHASE $ 37,000,000
BANK OF AMERICA $ 20,000,000
BANK OF NEW YORK $ 5,000,000
--------------
$ 62,000,000
==============
XX XXXXXX XXXXX (AS AGENT) $ 50,000,000
--------------
TOTAL DOMESTIC LINES $ 112,000,000
==============
FOREIGN
SWISS SUBSIDIARIES
UBS (2) CHF 8,000,000
LONG TERM REVOLVER
XX XXXXXX CHASE LONDON (AS AGENT) CHF 90,000,000
--------------
TOTAL FOREIGN LINES CHF 98,000,000
==============
OTHER FACILITY
PRUDENTIAL PRIVATE SHELF $ 40,000,000
AMOUNT DRAWN $ (20,000,000)
--------------
REMAINING AVAILABLE $ 20,000,000
==============
NOTES:
(1) WORKING CAPITAL LINES TO REMAIN THE SAME POST CLOSING
(2) FOREIGN LINES ARE MULTI-CURRENCY CREDIT FACILITY
MOVADO GROUP, INC.
OUSTANDING LETTERS OF CREDIT
OCTOBER 31, 2005
SCHEDULE IV
BANK FACE AMOUNT HOLDER/ DESCRIPTION
---- ------------- -----------------------------------
JPMORGAN CHASE A $ 49,560.00 RENT DEPOSIT
JPMORGAN CHASE B $ 228,248.55 RENT DEPOSIT
JPMORGAN CHASE C $ 78,900.00 RENT DEPOSIT
JPMORGAN CHASE D $ 100,000.00 RENT DEPOSIT CREDIT CARD PROCESSING
JPMORGAN CHASE E $ 15,000.00 FEES
JPMORGAN CHASE F $ 50,000.00 RENT DEPOSIT
JPMORGAN CHASE G $ 126,936.00 CANADIAN PAYROLL
JPMORGAN CHASE H $ 87,500.00 RENT DEPOSIT
JPMORGAN CHASE I $ 110,000.00 RENT DEPOSIT
JPMORGAN CHASE J $ 80,000.00 RENT DEPOSIT
JPMORGAN CHASE K $ 260,000.00 RENT DEPOSIT
-------------
$1,186,144.55
=============
NOTES:
(a) Grand Canal Shops- Las Vegas Boutique
(b) Forsgate Industrial Complex- Moonachie
(c) RCPI- Rock Center
(d) RCPI- Rock Center
(e) Shoppers Card- Private Label Credit Cards
(f) Stony Point Associates, LLC
(g) Original face value is CND 150,000 which equates to USD $126,936 at 1.1817
exchange rate
(h) Tampa West Shore Assco (Store #522)
(i) LA Cienga Partners (Store #527)
(j) Taubamna Cherry Creek (Store #528)
(k) Short Hills (Store #502)
MOVADO GROUP, INC
SCHEDULE OF CAPITAL LEASES & OTHER LONG TERM OBLIGATIONS
OCTOBER 31, 2005
SCHEDULE IV
CAPITAL LEASES- DOMESTIC & FOREIGN LEASE TOTAL OUTSTANDING BALANCE
NO CAPITAL LEASES EXIST
FOREIGN GUARANTEES
LEGAL ENTITY COMMITTED CUSTOMER_NAME / BENEFICIARY CCY AMOUNT NATURE BANK
---------------------- --------------------------- --- ------- --------- --------
Customs. Administration Douanes
MGI Luxury Group SA - Division Ebel Suisse - Xxxxxxxxxxxxxxx 00 0000 XXX 200,000 Guarantee UBS
Berne
MGI Luxury Group SA - Division XX Xxxx employee house. Wooders & Mrs CHF 19,050 Guarantee Credit
Adatte Suisse
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, Xxx xx xx Xxxxx 0, XXX 500,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, Xxx xx xx Xxxxx 0, XXX 600,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, Xxx xx xx Xxxxx 0, XXX 500,000 Guarantee UBS
2001 Neuchatel
Chambre Neuchateloise du commerce
MGI Luxury Group SA - Division Ebel et de l'industrie, Xxx xx xx Xxxxx 0, XXX 500,000 Guarantee UBS
2001 Neuchatel
MGI Luxury Group SA - Division Concord Xxxxxx Handelskammer, CHF 500,000 Guarantee UBS
Xxxxxxxxxxxxxxxx 0, 0000 Xxxx
MGI Luxury Group SA - Division Concord SAH CHF 200,000 Guarantee UBS
Customs: Administration Douanes
MGI Luxury Group SA - Division Concord Suisse - Xxxxxxxxxxxxxxx 00 0000 XXX 150,000 Guarantee UBS
Berne
Movado Watch Company XX Xxx Xxxxxx EUR 620,000 Guarantee UBS
MGI Luxury Group UK Ltd Customs GBP 0 Guarantee Natwest
MGI Luxury Group Gmbh Bayer. Versorgungskammer EUR 25,000 Guarantee Dresdner
MGI Luxury Group Gmbh NRG Deutschland GmbH EUR 50,000 Guarantee Dresdner
MGI Luxury Group Gmbh LHS Deutschland GmbH EUR 30,759 Guarantee Dresdner
MOVADO GROUP, INC.
OUTSTANDING LIENS
SCHEDULE IV
RELATED
FILING UCC-1
FILING SECURED PARTY NAME DEBTOR NAME JURISDICTION RECORD DATE FILE # FILE # DESCRIPTION
------ ------------------- ----------- ------------ ----------- --------------- ------- ------------------------------
(A) UCC1 Citicorp vendor Movado NY SOS 06/13/2002 138602 Filed for notification of
Finance, Inc. Group, Inc. Lease #3440240 Canon CLC1150
copier
UCC1 IBM Credit Movado NY SOS 07/12/2002 161990 Equipment together with
Corporation Group, Inc. related software as more fully
described under the IBM Credit
LLC supplements #088624: IBM
Equipment Type: all additions,
attachments, accessories,
accessions & upgrades thereto
& any & all substitutions,
replacements or exchanges for
any such item of equipment or
software & any & all proceeds
of any of the foregoing
including, w/o limitations,
payments under insurance or
any indemnity or warranty
relating to loss or damage to
such equipment
UCC1 IBM Credit LLC Movado NY SOS 01/02/2004 20040102000513 All of the following equipment
Group, Inc. together with all related
software, whether now owned or
hereafter acquired & wherever
located as more fully
described under IBM Credit LLC
Supplement(s) #B20075. IBM
Equipment Type: 9991 V42288
999G 9SSR
UCC1 Citicorp Vendor Movado NY SOS 06/01/2004 200406015441229 Filed for notification of
Finance, Inc. Group, Inc. Lease #3440241 Canon CLC4000
copier Colorpass Z6000
UCC1 Pitney Xxxxx Credit Movado NY SOS 06/01/2004 200407015547580 All equipment of whatever
Corporation Group, Inc. nature manufactured, sold,
distributed or financed by
Secured party & Pitney Xxxxx
Inc. & its subsidiaries, & all
proceeds therefrom,
accessories, additions &
attachments thereto &
replacements therefor
UCC1 IBM Credit LLC Movado NY SOS 04/04/2005 000000000000000 All of the following equipment
Group, Inc. together with all related
software, whether now owned or
hereafter acquired & wherever
located as more fully
described under IBM Credit LLC
Supplement(s) #C26430. IBM
Equipment Type: 3580 3581 9406
9992 9994 999G 9BPP 9SSR
UCC1 IBM Credit LLC Movado NY SOS 04/04/2005 000000000000000 Exact collateral description
Group, Inc. as 200504045283164
RELATED
FILING UCC-1
FILING SECURED PARTY NAME DEBTOR NAME JURISDICTION RECORD DATE FILE # FILE # DESCRIPTION
------ ------------------- ----------- ------------ ----------- --------------- ------- ------------------------------
UCC1 CIT Communications Movado NY SOS 09/23/2005 200509235841156 Equipment leased under Lease
Finance Corporation Group, Inc. No.M105613 including but not
limited to Avaya Inc. S8500
Media Server W/Gateway &
Definity BCS, & all
attachments, accessions,
additions, substitutions,
products, replacements, &
rentals and a right to use
license for any software
related to any of the
foregoing & proceeds therefrom
(b) Liens in favor of JPMorgan Chase Bank, N.A. ("Chase"), in connection with
the Promissory Note, dated as of December 13, 2005, between Chase and
Movado Group, Inc.
(c) Liens in favor of Bank of America, N.A. ("BoA") in connection with the
Amended and Restated Promissory Note, dated as of December 12, 2005,
between BoA and Movado Group, Inc.
(d) Liens in favor of The Bank of New York ("BoNY") in connection with the
Amended and Restated Master Promissory Note (Negotiated Rate), dated as of
June 30, 2005, between BoNY and Movado Group, Inc.
SCHEDULE V
Environmental Matters (Section 6.12)
Acetone, Denatured Alcohol, Clear Ammonia, Sodium Cyanide, Xxxxxxxx Solvent
(#8052-41-3) and VM&P Naphta (#8032-32-4) are stored by Parent at 000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx in accordance with applicable Environmental Laws.
SCHEDULE VI
Affiliate Transactions (Section 8.9)
The section on "Certain Relationships and Related Transactions" contained in the
Parent's Proxy, filed on June 16, 2005 with the Securities and Exchange
Commission, is herein incorporated by reference.
