EXHIBIT 99.6
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of September 29, 2003
among
LEVI XXXXXXX & CO.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
The Lenders Party Hereto
______________________________________
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINED TERMS...................................................2
SECTION 1.02. OTHER INTERPRETIVE PROVISIONS..................................33
SECTION 1.03. ACCOUNTING TERMS...............................................33
SECTION 1.04. ROUNDING.......................................................34
SECTION 1.05. REFERENCES TO AGREEMENTS AND LAWS..............................34
SECTION 1.06. TIMES OF DAY...................................................34
ARTICLE 2
THE COMMITMENTS AND BORROWINGS
SECTION 2.01. TERM LOANS.....................................................34
SECTION 2.02. BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.............35
SECTION 2.03. VOLUNTARY PREPAYMENTS..........................................36
SECTION 2.04. MANDATORY PREPAYMENTS..........................................37
SECTION 2.05. CHANGE OF CONTROL PREPAYMENTS..................................39
SECTION 2.06. REPAYMENT OF LOANS; DETERMINATION OF MATURITY DATE.............39
SECTION 2.07. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS
UNDER GUARANTY.................................................40
SECTION 2.08. INTEREST.......................................................41
SECTION 2.09. FEES...........................................................41
SECTION 2.10. COMPUTATION OF INTEREST AND FEES...............................42
SECTION 2.11. EVIDENCE OF DEBT...............................................42
SECTION 2.12. PAYMENTS GENERALLY.............................................42
SECTION 2.13. SHARING OF PAYMENTS............................................44
ARTICLE 3
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.01. TAXES..........................................................45
SECTION 3.02. ILLEGALITY.....................................................46
SECTION 3.03. INABILITY TO DETERMINE RATES...................................47
SECTION 3.04. INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY............47
SECTION 3.05. FUNDING LOSSES.................................................48
SECTION 3.06. MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION............48
SECTION 3.07. SURVIVAL.......................................................49
ARTICLE 4
CONDITIONS PRECEDENT TO BORROWING
SECTION 4.01. CONDITIONS OF BORROWING........................................49
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.......52
SECTION 5.02. AUTHORIZATION; NO CONTRAVENTION................................52
SECTION 5.03. GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.....................52
SECTION 5.04. BINDING EFFECT.................................................53
SECTION 5.05. FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT...............53
SECTION 5.06. LITIGATION.....................................................54
SECTION 5.07. NO DEFAULT.....................................................54
SECTION 5.08. OWNERSHIP OF PROPERTY; LIENS; REAL PROPERTY....................54
SECTION 5.09. ENVIRONMENTAL COMPLIANCE.......................................55
SECTION 5.10. INSURANCE......................................................55
SECTION 5.11. TAXES..........................................................55
SECTION 5.12. ERISA COMPLIANCE; FOREIGN EMPLOYEE BENEFIT PLANS...............56
SECTION 5.13. SUBSIDIARIES...................................................57
SECTION 5.14. MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC
UTILITY HOLDING COMPANY ACT....................................57
SECTION 5.15. DISCLOSURE.....................................................58
SECTION 5.16. COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS...............58
SECTION 5.17. INTELLECTUAL PROPERTY, LICENSES, ETC...........................58
SECTION 5.18. MATTERS RELATING TO COLLATERAL.................................60
SECTION 5.19. MATERIALLY ADVERSE AGREEMENTS..................................61
SECTION 5.20. SOLVENCY.......................................................61
SECTION 5.21. EXTRAORDINARY EVENTS...........................................61
SECTION 5.22. CONDUCT OF BUSINESS............................................61
ARTICLE 6
AFFIRMATIVE COVENANTS
SECTION 6.01. FINANCIAL STATEMENTS...........................................61
SECTION 6.02. CERTIFICATES; OTHER INFORMATION................................62
SECTION 6.03. NOTICES........................................................65
SECTION 6.04. PAYMENT OF TAXES...............................................65
SECTION 6.05. PRESERVATION OF EXISTENCE, ETC.................................66
SECTION 6.06. MAINTENANCE OF PROPERTIES......................................66
SECTION 6.07. MAINTENANCE OF INSURANCE.......................................66
SECTION 6.08. COMPLIANCE WITH LAWS...........................................66
SECTION 6.09. BOOKS AND RECORDS..............................................66
SECTION 6.10. INSPECTION RIGHTS..............................................67
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SECTION 6.11. USE OF PROCEEDS................................................67
SECTION 6.12. FURTHER ASSURANCES REGARDING COLLATERAL AND
GUARANTY REQUIREMENT...........................................67
SECTION 6.13. MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL........69
SECTION 6.14. POST CLOSING ACTIONS RELATING TO COLLATERA.....................71
ARTICLE 7
NEGATIVE COVENANTS
SECTION 7.01. LIENS..........................................................73
SECTION 7.02. INVESTMENTS....................................................76
SECTION 7.03. INDEBTEDNESS...................................................78
SECTION 7.04. FUNDAMENTAL CHANGES............................................81
SECTION 7.05. DISPOSITIONS...................................................82
SECTION 7.06. RESTRICTED PAYMENTS............................................85
SECTION 7.07. CHANGE IN NATURE OF BUSINESS...................................85
SECTION 7.08. TRANSACTIONS WITH AFFILIATES...................................86
SECTION 7.09. BURDENSOME AGREEMENTS..........................................86
SECTION 7.10. USE OF PROCEEDS................................................86
SECTION 7.11. LEASE OBLIGATIONS..............................................87
SECTION 7.12. AMENDMENTS OF CERTAIN DOCUMENTS...............................87
SECTION 7.13. ACCOUNTING CHANGES.............................................87
SECTION 7.14. PREPAYMENTS, ETC., OF INDEBTEDNESS.............................87
SECTION 7.15. NEGATIVE PLEDGE................................................88
SECTION 7.16. RESTRICTED SUBSIDIARIES........................................89
SECTION 7.17. AMENDMENTS OF DOCUMENTS RELATING TO INDEBTEDNESS...............89
SECTION 7.18. FINANCIAL COVENANT.............................................89
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT..............................................90
SECTION 8.02. REMEDIES UPON EVENT OF DEFAULT.................................92
SECTION 8.03. APPLICATION OF FUNDS...........................................93
ARTICLE 9
ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT AND AUTHORIZATION OF THE ADMINISTRATIVE AGENT AND
SUPPLEMENTAL COLLATERAL AGENTS.................................93
SECTION 9.02. DELEGATION OF DUTIES...........................................95
SECTION 9.03. LIABILITY OF THE ADMINISTRATIVE AGENT..........................95
SECTION 9.04. RELIANCE BY THE ADMINISTRATIVE AGENT...........................95
SECTION 9.05. NOTICE OF DEFAULT..............................................96
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SECTION 9.06. CREDIT DECISION; DISCLOSURE OF INFORMATION BY
THE ADMINISTRATIVE AGENT.......................................96
SECTION 9.07. INDEMNIFICATION OF THE ADMINISTRATIVE AGENT....................97
SECTION 9.08. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY............98
SECTION 9.09. SUCCESSOR ADMINISTRATIVE AGENT.................................98
SECTION 9.10. THE ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM..............99
SECTION 9.11. COLLATERAL AND GUARANTY MATTERS...............................100
SECTION 9.12. OTHER AGENTS; ARRANGERS AND MANAGERS..........................102
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. AMENDMENTS, ETC..............................................102
SECTION 10.02. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES...........104
SECTION 10.03. NO WAIVER; CUMULATIVE REMEDIES...............................105
SECTION 10.04. ATTORNEY COSTS, EXPENSES AND TAXES...........................105
SECTION 10.05. INDEMNIFICATION BY THE BORROWER..............................106
SECTION 10.06. PAYMENTS SET ASIDE...........................................107
SECTION 10.07. SUCCESSORS AND ASSIGNS.......................................107
SECTION 10.08. CONFIDENTIALITY..............................................110
SECTION 10.09. SET-OFF......................................................112
SECTION 10.10. INTEREST RATE LIMITATION.....................................112
SECTION 10.11. COUNTERPARTS.................................................112
SECTION 10.12. INTEGRATION..................................................112
SECTION 10.13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................113
SECTION 10.14. SEVERABILITY.................................................113
SECTION 10.15. TAX FORMS....................................................113
SECTION 10.16. GOVERNING LAW................................................115
SECTION 10.17. WAIVER OF RIGHT TO TRIAL BY JURY.............................116
SECTION 10.18. JUDGMENT CURRENCY............................................116
SECTION 10.19. INTERNET COMMUNICATIONS......................................117
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SCHEDULES
1.01A Definition of Change of Control
1.01B Subsidiaries with Certain Trademark Rights
2.01 Commitments and Pro Rata Shares
5.08 Real Property
5.12(c) ERISA Events
5.13 Subsidiaries
5.17 Intellectual Property Matters
6.14(b) Material Foreign Subsidiaries
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for Notices
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EXHIBITS
FORM OF
A Loan Notice
B-1 Tranche A Note
B-2 Tranche B Note
C Compliance Certificate
D Assignment and Assumption and Annex 1
E Guaranty
F Intellectual Property Security Agreement
G Second-Lien Pledge and Security Agreement
H Intercreditor Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT") is entered into as of
September 29, 2003, among LEVI XXXXXXX & CO., a Delaware corporation (the
"BORROWER"), each lender from time to time party hereto (collectively, the
"LENDERS" and individually, a "LENDER"), and BANK OF AMERICA, N.A., as
Administrative Agent.
RECITALS
WHEREAS, the Borrower is a party to that certain Credit Agreement,
dated as of January 31, 2003, among the Borrower, Citicorp North America, Inc.,
as administrative agent and swingline lender, the l/c issuers and other lenders
party thereto, The Bank of Nova Scotia, Xxxxxxx Xxxxx Barney Inc. and Banc of
America Securities LLC, as joint lead arrangers and joint book managers, The
Bank of Nova Scotia and Banc of America Securities LLC, as co-syndication
agents, and The CIT Group/Commercial Services, Inc., as documentation agent (as
amended, supplemented or otherwise modified prior to the Closing Date, the
"EXISTING CREDIT AGREEMENT");
WHEREAS, certain Subsidiaries of the Borrower are parties to that
certain Receivables Purchase Agreement, dated as of July 31, 2001, among Levi
Xxxxxxx Receivables Funding, LLC, Levi Xxxxxxx Funding, LLC, Levi Xxxxxxx
Financial Center Corporation and Levi Xxxxxxx Securitization Corp. and that
certain Receivables Purchase and Sale Agreement dated as of January 28, 2000
among the Borrower, LSFCC, Levi Xxxxxxx Funding Corp., and Levi Xxxxxxx Funding,
LLC (each as amended, supplemented or otherwise modified prior to the Closing
Date) (collectively, the "EXISTING RECEIVABLES AGREEMENTS");
WHEREAS, the Borrower has requested that the Lenders provide a term
loan facility for the purpose of refinancing all of the obligations of the
Borrower under the Existing Credit Agreement and the Existing Receivables
Agreements, and for working capital and other general corporate purposes, and
the Lenders are willing to do so on the terms and conditions set forth herein;
WHEREAS, contemporaneously herewith, the Borrower is entering into the
ABL Credit Agreement (as defined below);
WHEREAS, the Borrower will secure all of the Obligations hereunder and
under the other Loan Documents by granting to the Administrative Agent, on
behalf of the Secured Parties, (i) a First Priority Lien on its trademark and
copyright assets pursuant to the Intellectual Property Security Agreement and
(ii) a Lien on certain of its real, personal and mixed property, including a
pledge of certain of the capital stock of certain of its Subsidiaries, pursuant
to the Second-Lien Pledge and Security Agreement, Mortgages and Foreign Pledge
Agreements,
which Lien shall be on a junior basis to the agents and lenders under the ABL
Credit Agreement pursuant to the Intercreditor Agreement; and
WHEREAS, certain Domestic Subsidiaries have agreed to guarantee the
Obligations hereunder and under the other Loan Documents to secure their
guaranties by granting to the Administrative Agent, on behalf of the Secured
Parties, (i) a First Priority Lien on their respective trademark and copyright
assets pursuant to the Intellectual Property Security Agreement and (ii) a Lien
on certain of their respective real, personal and mixed property, including a
pledge of certain of the capital stock of certain of their respective
Subsidiaries, pursuant to the Second-Lien Pledge and Security Agreement,
Mortgages and Foreign Pledge Agreements, which Lien shall be on a junior basis
to the agents and lenders under the ABL Credit Agreement pursuant to the
Intercreditor Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"1996 INDENTURE" means that certain Indenture dated as of November 6,
1996, as supplemented by a Supplemental Indenture dated as of May 16, 2000,
between the Borrower and Wilmington Trust Company (as successor to Citibank,
N.A.), as trustee.
"1996 INSTRUMENTS" means, collectively, (i) the 0000 Xxxxxxxxx and (ii)
that certain Fiscal Agency Agreement dated as of November 22, 1996 between the
Borrower and Citibank, N.A., as fiscal agent.
"6.80% NOTES" means the Borrower's 6.80% Notes due 2003 issued under
the 0000 Xxxxxxxxx.
"6.80% NOTES ACCOUNTS" means the reserve accounts established for the
cash reserves required to pay the 6.80% Notes.
"2006 NOTES" means the Borrower's 7.00% Notes due November 1, 2006
issued under the 1996 Indenture.
"2006 NOTES REFINANCING CONDITION" has the meaning specified in Section
2.06(b).
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"2008 NOTES" means, collectively, (i) the Borrower's 11 5/8% Senior
Notes due 2008 issued under that certain U.S. Dollar Indenture dated as of
January 18, 2001 between the Borrower and Wilmington Trust Company (as successor
to Citibank, N.A.), as trustee and (ii) the Borrower's 11 5/8% Senior Notes due
2008 issued under that certain Euro Indenture dated as of January 18, 2001
between the Borrower and Wilmington Trust Company (as successor to Citibank,
N.A.), as trustee.
"2008 NOTES REFINANCING CONDITION" has the meaning specified in Section
2.06(b).
"ABL AGENT" means the agent under the ABL Credit Agreement.
"ABL CREDIT AGREEMENT" means the $650,000,000 Credit Agreement dated as
of the date hereof among the Borrower, Levi Xxxxxxx Financial Center
Corporation, the Guarantors, Bank of America, as agent, and the lenders named
therein, including any related notes, collateral documents, letters of credit,
Guarantees and any appendices, exhibits or schedules to any of the foregoing, as
any or all of such agreements (or any other agreement that Refinances any or all
of such agreements) may be, subject to Section 7.01(b), amended, restated,
modified or supplemented from time to time, or Refinanced (subject to Section
7.01(b)) in a greater or a lesser amount from time to time, whether with the
original agents and lenders or other agents and lenders, and whether provided
under the original credit agreement or one or more other asset-based or secured
credit agreements under which the Borrower is a borrower. For purposes of this
definition, in respect of the Indebtedness under the ABL Credit Agreement,
"REFINANCE" means to refinance, extend, renew or restructure such Indebtedness.
"ACH TRANSACTIONS" means any cash management or related services
including the automatic clearing house transfer of funds by Bank of America for
the account of the Borrower or LSFCC pursuant to agreement or overdrafts.
"ADMINISTRATIVE AGENT" means Bank of America in its capacity as
administrative agent for the Lenders under any of the Loan Documents, or any
successor administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire in
a form supplied by the Administrative Agent.
3
"AFFILIATE" means, with respect to any 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. "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
ability to exercise voting power, by contract or otherwise. "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"AGENT-RELATED PERSONS" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America, Banc of America
Securities LLC), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"AGENTS" means, collectively, the Administrative Agent, the Lead
Arranger, and each co-agent or sub-agent appointed from time to time by the
Administrative Agent pursuant to Article IX.
"AGGREGATE COMMITMENTS" means the Commitments of all the Lenders.
"AGREEMENT" has the meaning specified in the introductory paragraph
hereto.
"APPLICABLE AGENT" means (i) with respect to the Intellectual Property
Security Agreement and the IP Collateral, the Administrative Agent and (ii) with
respect to the Second-Lien Pledge and Security Agreement, the Foreign Pledge
Agreements and the Second-Lien Collateral, (A) so long as the Intercreditor
Agreement is in effect, (x) in the case of any Collateral in which security
interests can only be perfected by possession or control or to the extent
otherwise agreed to by the Administrative Agent, the ABL Agent as an agent for
the Administrative Agent pursuant to the Intercreditor Agreement or Bank of
America as collateral agent (or any other Person that may be appointed from time
to time as collateral agent) for the Administrative Agent and the ABL Agent
pursuant to the Second-Lien Pledge and Security Agreement and the ABL Credit
Agreement, respectively and (y) in the case of all other Collateral, the
Administrative Agent and (B) at all other times, the Administrative Agent.
"APPROVED FUND" has the meaning specified in Section 10.07(g).
"ASSIGNMENT AND ASSUMPTION" means an Assignment and Assumption
substantially in the form of Exhibit D.
4
"ATTORNEY COSTS" means and includes all fees, expenses and
disbursements of any law firm or other external counsel.
"ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the Fiscal Year ended November
24, 2002, and the related consolidated statements of income or operations,
stockholders' equity and cash flows for such Fiscal Year of the Borrower and its
Subsidiaries, including the notes thereto.
"AVAILABLE AMOUNT" means (i) $50,000,000 in the aggregate during Fiscal
Year 2003, (ii) $100,000,000 in the aggregate during Fiscal Years 2003 and 2004,
taken as a single period, (iii) $150,000,000 in the aggregate during Fiscal
Years 2003, 2004 and 2005, taken as a single period, (iv) $200,000,000 in the
aggregate during Fiscal Years 2003, 2004, 2005 and 2006, taken as a single
period, (v) $225,000,000 in the aggregate during Fiscal Years 2003, 2004, 2005,
2006 and 2007, taken as a single period, (vi) $250,000,000 in the aggregate
during Fiscal Years 2003, 2004, 2005, 2006, 2007 and 2008, taken as a single
period, or (vii) $275,000,000 in the aggregate during Fiscal Years 2003, 2004,
2005, 2006, 2007, 2008 and 2009, taken as a single period; PROVIDED that in each
case, the net transfer of cash from the Loan Parties to Subsidiaries that are
not Guarantors shall be no more than $25,000,000 in any Fiscal Year.
"BANK OF AMERICA" means Bank of America, N.A. and its successors.
"BASE RATE" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Tranche A Loan that bears interest based on
the Base Rate.
5
"BORROWER" has the meaning specified in the introductory paragraph
hereto.
"BORROWER IP RIGHTS" has the meaning specified in Section 5.17(a).
"BORROWING" means the borrowing consisting of Tranche A Loans of the
same Type or Tranche B Loans and, in the case of Eurodollar Rate Loans, having
the same Interest Period, made by each of the Lenders pursuant to Section 2.01.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the State of California or the state where the Administrative
Agent's Office is located (such state being California as of the date of this
Agreement) and, if such day relates to any Eurodollar Rate Loan, means any such
day on which dealings in Dollar deposits are conducted by and between banks in
the London interbank eurodollar market.
"CAPITAL MARKETS TRANSACTION" means an issuance or sale of Indebtedness
by the Borrower through a public offering or private placement (other than
Indebtedness expressly permitted to be incurred or issued pursuant to Section
7.03 (other than Section 7.03(a)(ii)).
"CASH EQUIVALENTS" means, as at any date of determination, (a)
marketable securities (i) issued or directly and unconditionally guaranteed as
to interest and principal by the United States government or (ii) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (b) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A- from
S&P or the equivalent thereof from another nationally recognized rating agency;
(c) commercial paper maturing no more than 270 days from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Xxxxx'x; (d) time deposits, certificates of
deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States, any state thereof or an OECD country having, at such
date, a rating of at least A- from S&P or the equivalent thereof from another
nationally recognized rating agency (except as otherwise approved by the
Treasurer of the Borrower) or by a primary government securities dealer
reporting to the Market Reports Division of the Federal Reserve Bank of New
York; (e) repurchase agreements with financial institutions organized under the
laws of the United States, any state thereof or an OECD country having, at such
date, a rating of at least A- from S&P or the equivalent thereof from another
nationally recognized rating agency (except as
6
otherwise approved by the Treasurer of the Borrower) or with a primary
government securities dealer reporting to the Market Reports Division of the
Federal Reserve Bank of New York; (f) Dollar denominated floating rate notes,
foreign currency denominated floating rate notes and foreign indexed notes, in
each case maturing within one year after such date and having, at the time of
the acquisition thereof, a rating of at least A or A-1 from S&P or the
equivalent thereof from another nationally recognized rating agency; (g) auction
rate notes maturing within one year after such date and having, at the time of
the acquisition thereof, a rating of at least A or A-1 from S&P or the
equivalent thereof from another nationally recognized rating agency; (h) money
market preferred funds maturing within one year after such date and having, at
the time of the acquisition thereof, a rating of at least AA from S&P or the
equivalent thereof from another nationally recognized rating agency; and (i)
money market funds maturing within one year after such date and having, at the
time of the acquisition thereof, a rating of at least A- from S&P or the
equivalent thereof from another nationally recognized rating agency; provided
such investments are limited to $25,000,000 for each such fund and $100,000,000
in the aggregate for all such funds, such funds are open-end funds with total
assets of more than $1,000,000,000 and an expressed goal of maintaining a net
asset value of $1.00 per share and such funds limit their investments to the
prime credit instruments allowed in this definition with average weighted
maturity of less than 90 days.
"CASH MANAGEMENT SERVICES" means clearing lines, overdraft facilities,
controlled disbursement services or similar cash management arrangements
including, without limitation, any obligations arising from the honoring of a
draft or payment order, and the ACH Transactions and credit card services.
"CHANGE OF CONTROL" means the occurrence of any "Change in Control" as
defined in that certain U.S. Dollar Indenture dated as of January 18, 2001
between the Borrower and Wilmington Trust Company (as successor to Citibank,
N.A.), as trustee, which definition (together with the related definitions) is
set forth for the convenience of the parties to this Agreement in Schedule
1.01A.
"CLASS", when used in respect of any Loan, Borrowing or Commitment,
refers to whether such Loan, or the Loans comprising such Borrowing, or the
Loans to be made pursuant to such Commitment, are Tranche A Loans or Tranche B
Loans.
"CLOSING DATE" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Sections 4.01 and 10.01.
"CODE" means the Internal Revenue Code of 1986.
7
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents.
"COLLATERAL AND GUARANTY REQUIREMENT" means the requirement that:
(a) the Administrative Agent shall have received from each Lien Grantor
either (i) a counterpart of the Intellectual Property Security Agreement duly
executed and delivered on behalf of such Lien Grantor or (ii) in the case of any
Person that becomes a Lien Grantor after the Closing Date, a supplement to the
Intellectual Property Security Agreement, in the form specified therein, duly
executed and delivered on behalf of such Lien Grantor;
(b) the Administrative Agent shall have received from each Second-Lien
Grantor either (i) a counterpart of the Second-Lien Pledge and Security
Agreement duly executed and delivered on behalf of such Second-Lien Grantor or
(ii) in the case of any Person that becomes a Second-Lien Grantor after the
Closing Date, a supplement to the Second-Lien Pledge and Security Agreement, in
the form specified therein, duly executed and delivered on behalf of such
Second-Lien Grantor;
(c) all outstanding Equity Interests constituting Collateral shall have
been pledged pursuant to the Second-Lien Pledge and Security Agreement and the
Foreign Pledge Agreements and the Applicable Agent shall have received all
certificates or other instruments representing all such outstanding Equity
Interests, in each case together with stock powers or other instruments of
transfer with respect thereto endorsed in blank (other than with respect to
certain pledges over Pledged Foreign Subsidiaries which may occur post-Closing
pursuant to Section 6.14);
(d) all documents and instruments, including UCC financing statements
and PTO filing documents, required by law or reasonably requested by the
Applicable Agent to be filed, registered or recorded to create the Liens
intended to be created by the Intellectual Property Security Agreement and the
Second-Lien Pledge and Security Agreement and perfect or record such Liens to
the extent, and with the priority, required by the Collateral Documents, shall
have been filed, registered or recorded or delivered to the Applicable Agent for
filing, registration or recording (other than with respect to certain actions
relating to the IP Collateral and the Second-Lien IP Collateral which may occur
post-Closing pursuant to Section 6.14);
(e) each Lien Grantor shall have obtained all consents and approvals
required to be obtained by it in connection with (i) the execution and delivery
of the Intellectual Property Security Agreement and (ii) subject to any
limitations set forth in the Intellectual Property Security Agreement, the
performance of its
8
obligations thereunder and the granting of First Priority Liens purported to be
granted by it thereunder;
(f) each Second-Lien Grantor shall have obtained all consents and
approvals required to be obtained by it in connection with (i) the execution and
delivery of the Second-Lien Pledge and Security Agreement and, if applicable, a
Foreign Pledge Agreement and (ii) subject to any limitations set forth in the
Second-Lien Pledge and Security Agreement and, if applicable, the Foreign Pledge
Agreement, the performance of its obligations thereunder and the granting of the
Liens purported to be granted by it thereunder; and
(g) the Administrative Agent shall have received a counterpart of the
Intercreditor Agreement from each of the parties thereto.
"COLLATERAL DOCUMENTS" means, collectively, the Intellectual Property
Security Agreement, the Second-Lien Pledge and Security Agreement, the
Intercreditor Agreement, the Mortgages, the Foreign Pledge Agreements and each
other security agreement, pledge agreement, mortgage, instrument or document
executed and delivered pursuant to this Agreement or any of the other Loan
Agreements to secure any of the Obligations.
"COMMITMENT" means, as to each Lender, its obligation, if any, to (a)
make a Tranche A Loan to the Borrower pursuant to Section 2.01(a) in an
aggregate principal amount not to exceed the Lender's Tranche A Commitment set
forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
and (b) make a Tranche B Loan to the Borrower pursuant to Section 2.01(b) in an
aggregate principal amount not to exceed the Lender's Tranche B Commitment set
forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
in each case as such amounts may be adjusted from time to time in accordance
with this Agreement.
"COMMUNICATIONS" has the meaning specified in Section 10.19.
"COMPENSATION PERIOD" has the meaning specified in Section 2.12(c)(ii).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit C.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum of
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of capital leases which is
capitalized on the consolidated balance sheet of the Borrower and its
Subsidiaries) by the Borrower and its Subsidiaries during that period that, in
conformity with
9
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of the Borrower and
its Subsidiaries but EXCLUDING the aggregate of all expenditures by the Borrower
and its Subsidiaries during that period to acquire (by purchase or otherwise)
the business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of the Borrower. For purposes of this
definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance proceeds shall be
included in Consolidated Capital Expenditures only to the extent of the gross
amount of such purchase price less the credit granted by the seller of such
equipment for the equipment being traded in at such time or the amount of such
proceeds, as the case may be.
"CONSOLIDATED EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated Net
Income for such period, PLUS (b) the sum of the following to the extent deducted
in calculating such Consolidated Net Income: (i) Consolidated Interest Charges
for such period, (ii) the provision for federal, state, local and foreign income
taxes for such period, (iii) the amount of depreciation and amortization
expense, (iv) all nonoperating expense (excluding nonoperating expense, if any,
constituting restructuring and restructuring related charges incurred after June
25, 2003) of the Borrower and its subsidiaries for such period MINUS all
nonoperating income (excluding nonoperating income, if any, constituting
reversals of restructuring and restructuring related charges, where such charges
are incurred after June 25, 2003) of the Borrower and its Subsidiaries for such
period, (v) solely with respect to the Fiscal Quarter ending November 2002, the
amount of $8,788,000, which shall be deemed by the parties hereto to be an
amount relating to restructuring and restructuring related charges for such
period, (vi) solely with respect to the Fiscal Quarter ending February 2003, a
one-time non-cash adjustment to lease expense in an amount not to exceed
$25,000,000 and (vii) without duplication, all restructuring and restructuring
related charges incurred after June 25, 2003 (the "RESTRUCTURING CHARGES"),
minus (c) without duplication, the aggregate amount of cash payments made during
such period in respect of the Restructuring Charges.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (a) Consolidated EBITDA for such period, MINUS (b) the sum,
without duplication, of the amounts for such period of (i) voluntary and
scheduled repayments of Indebtedness, including without limitation any
repayments of the 2006 Notes or the 2008 Notes (excluding (x) repayments of
principal on loans under the ABL Credit Agreement except to the extent the
commitments thereunder are permanently reduced in connection with such repayment
and (y) (A) repayments of the Equipment Financing Transactions described on
Schedule 7.03 with the proceeds of Equipment Financing Transactions secured by
the same equipment and consummated within 180 days of the related repayments,
(B)
10
repayments of the 6.80% Notes from the 6.80% Notes Accounts and (C) repayments
of the Existing Credit Agreement and the Existing Receivables Agreements), (ii)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (iii) Consolidated Interest Charges for such
period or any other period to the extent paid in cash during such period, and
(iv) cash payments of current federal, state, local and foreign taxes during
such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) (i) Consolidated EBITDA for the four Fiscal
Quarters most recently ended for which the Borrower is required to have
delivered financial statements pursuant Section 6.01(a) or (b) MINUS (ii) the
sum of (A) the aggregate amount of all Consolidated Capital Expenditures made by
the Borrower and its Subsidiaries during such period PLUS (B) the provision for
federal, state, local and foreign income taxes for such period, TO (b)
Consolidated Interest Charges for such period or any other periods to the extent
paid in cash during such period.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of any date of
determination, all Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis that would (or would be required to) appear as liabilities on
a consolidated balance sheet of the Borrower and its Subsidiaries in accordance
with GAAP.
"CONSOLIDATED INTEREST CHARGES" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, all interest (net of all interest
income), premium amortization, debt discount, fees, charges and related expenses
of the Borrower and its Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets, in each case to the extent treated as interest in accordance
with GAAP.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the four Fiscal Quarters
most recently ended for which the Borrower is required to have delivered
financial statements pursuant to Section 6.01(a) or (b), to (b) Consolidated
Interest Charges for such period or any other periods to the extent paid in cash
during such period.
"CONSOLIDATED LEVERAGE RATIO" means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the four Fiscal Quarters most recently ended for which
the Borrower is required to have delivered financial statements pursuant to
Section 6.01(a) or (b).
11
"CONSOLIDATED NET INCOME" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries for that period.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL" has the meaning specified in the definition of "AFFILIATE."
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"DEFAULT" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"DEFAULT RATE" means, with respect to any Loan, an interest rate equal
to the interest rate otherwise applicable to such Loan plus 2% per annum, in
each case to the fullest extent permitted by applicable laws.
"DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith and any grant of any option or rights relating to
any such property.
"DISQUALIFIED STOCK" has the meaning specified in that certain U.S.
Dollar Indenture dated as of January 18, 2001 between the Borrower and
Wilmington Trust Company (as successor to Citibank, N.A.), as trustee, that
certain Euro Indenture dated as of January 18, 2001 between the Borrower and
Wilmington Trust Company (as successor to Citibank, N.A.), as trustee, and that
certain
12
Indenture dated as of December 4, 2002 between the Borrower and Wilmington Trust
Company, as trustee.
"DOLLAR" and "$" mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" means any direct or indirect Subsidiary of the
Borrower that is organized under the laws of any political subdivision of the
United States.
"ELIGIBLE ASSIGNEE" has the meaning specified in Section 10.07(g).
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (a) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (b) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (c) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"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
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EQUIPMENT FINANCING TRANSACTION" means any financing with any Person
of equipment secured by such equipment which will be treated as Indebtedness.
13
"EQUITY INTERESTS" means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"EURODOLLAR RATE" means for any Interest Period with respect to any
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the higher of (x) 2% and (y) the rate per annum obtained by
dividing (a)(i) the offered rate (if any) appearing on the Telerate Screen which
displays an average British Bankers' Association Interest Settlement Rate for
deposits of the relevant amount for a period equal to the Interest Period
relating to that Borrowing at or about 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period with respect to each
Eurodollar Rate Loan, or (ii) if the Administrative Agent is unable to access
the Telerate Screen or if the
14
relevant rate is not displayed, the rate per annum at which Bank of America was
offering to leading banks in the London interbank market at their request
deposits of such amount and for such Interest Period at or about 4:00 P.M.
(London time) two Business Days before the first day of such Interest Period, by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage. For
the purposes of this definition, "Telerate Screen" means the display on the
Telerate Service or such other service as may be nominated by the British
Bankers' Association Interest Settlement Rate for deposits in Dollars.
"EURODOLLAR RATE LOAN" means a Tranche A Loan that bears interest at a
rate based on the Eurodollar Rate.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for any
Eurodollar Rate Loan means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) (carried out to five decimal
places) under regulations issued from time to time by the FRB (or any successor)
or any governmental authority having jurisdiction with respect thereto for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency Funding (currently referred to as "EUROCURRENCY LIABILITIES", as
that term is defined for purposes of Regulation D of the FRB) having a term
equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 8.01.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the Recitals
hereto.
"EXISTING RECEIVABLES AGREEMENTS" has the meaning specified in the
Recitals hereto.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; PROVIDED THAT (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the weighted average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
15
"FEE LETTER" means the letter agreement, dated September 10, 2003,
among the Borrower and certain Affiliates of Bank of America.
"FIRST PRIORITY LIEN" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (a) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than senior Liens permitted pursuant to Section 7.01) and (b) such Lien is the
only Lien (other than Liens permitted pursuant to Section 7.01) to which such
Collateral is subject.
"FISCAL QUARTER" means, with respect to the Borrower or any of its
Subsidiaries, the approximately three-month period ending on a day in February,
May, August or November, as the case may be, not earlier than the tenth Business
Day before the last day of such month, as determined from time to time by the
Borrower in the ordinary course of its business, as the context may require, or,
if any such Subsidiary was not in existence on the first day of any such period,
the period commencing on the date on which such Subsidiary is incorporated,
organized, formed or otherwise created and ending on the last day of such
period.
"FISCAL YEAR" means, with respect to the Borrower or any of its
Subsidiaries, the approximately twelve-month period ending on a day in November
not earlier than the tenth Business Day before the last day of such month, as
determined from time to time by the Borrower in the ordinary course of its
business or, if any such Subsidiary was not in existence on such day in November
in any calendar year, the period commencing on the date on which such Subsidiary
is incorporated, organized, formed or otherwise created and ending on the fourth
Sunday of the next succeeding November.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"FOREIGN GOVERNMENT SCHEME OR ARRANGEMENT" has the meaning specified in
Section 5.12(d).
"FOREIGN LENDER" has the meaning specified in Section 10.15(a)(i).
"FOREIGN PLAN" has the meaning specified in Section 5.12(d).
"FOREIGN PLEDGE AGREEMENTS" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States,
executed and delivered by the Borrower or any Domestic Subsidiary that owns
Equity Interests of one or more Pledged Foreign Subsidiaries organized in such
country, in form and substance satisfactory to the Applicable Agent.
16
"FOREIGN RECEIVABLES" means all obligations of any obligor (whether now
existing or hereafter arising) under a contract for sale of goods or services by
Foreign Subsidiaries or any foreign branch of any Domestic Subsidiary, which
includes any obligation of such obligor (whether now existing or hereafter
arising) to pay interest, finance charges or amounts with respect thereto, and,
with respect to any of the foregoing receivables or obligations, (a) all of the
interest of Foreign Subsidiaries or foreign branches of Domestic Subsidiaries in
the goods (including returned goods) the sale of which gave rise to such
receivable or obligation after the passage of title thereto to any obligor, (b)
all other Liens and property subject thereto from time to time purporting to
secure payment of such receivables or obligations, (c) all guaranties,
insurance, letters of credit and other agreements or arrangements of whatever
character from time to time supporting or securing payment of any such
receivables or obligations, (d) all books and records relating to the foregoing,
lockbox accounts containing primarily proceeds of the foregoing, and other
similar related assets customarily transferred (or in which security interests
are customarily granted) to purchasers in receivables purchase transactions that
are treated as sales under GAAP, (e) all rights of Foreign Subsidiaries or
foreign branches of Domestic Subsidiaries to refunds on account of value added
tax in respect of goods sold to an obligor, any receivable from whom is or
becomes a defaulted receivable, and (f) proceeds of or judgments relating to any
of the foregoing, any debts represented thereby and all rights of action against
any Person in connection therewith.
"FOREIGN SUBSIDIARY" means any direct or indirect Subsidiary of the
Borrower, other than a Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"FUND" has the meaning specified in Section 10.07(g).
"FUNDED CURRENT LIABILITY PERCENTAGE" means "funded current liability
percentage" within the meaning of Section 412(l)(8)(B) of the Internal Revenue
Code.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
17
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GUARANTEE" means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness or other obligation
payable or performable by another Person (the "primary obligor") in any manner,
whether directly or indirectly, and including any obligation of such Person,
direct or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation, (ii) to purchase
or lease property, securities or services for the purpose of assuring the
obligee in respect of such Indebtedness or other obligation of the payment or
performance of such Indebtedness or other obligation, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation, or (iv) entered
into for the purpose of assuring in any other manner the obligee in respect of
such Indebtedness or other obligation of the payment or performance thereof or
to protect such obligee against loss in respect thereof (in whole or in part),
or (b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"GUARANTORS" means, collectively, each Domestic Subsidiary of the
Borrower other than any Restricted Subsidiary.
"GUARANTY" means the Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Secured Parties, substantially in the form
of Exhibit E.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation,
18
transportation, processing, construction, treatment, abatement, removal,
remediation, disposal, disposition or handling of any Hazardous Materials, and
any corrective action or response action with respect to any of the foregoing.
"INDEBTEDNESS" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct obligations of such Person arising under letters of
credit (including standby and trade letters of credit), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a Lien
on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interests in such Person
or any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of Redeemable Preferred Interests, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as
19
of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INDEMNITEES" has the meaning specified in Section 10.05.
"INELIGIBLE SECURITIES" means securities which may not be underwritten
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1933 (12 U.S.C. ss. 24, Seventh), as amended.
"INFORMATION" has the meaning specified in Section 10.08.
"INFORMATION MEMORANDUM" means the information memorandum dated
September 2003 used by the Lead Arranger in connection with the syndication of
the Commitments.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means the Intellectual
Property Security Agreement executed and delivered by the Borrower and each
other Loan Party on the Closing Date, substantially in the form of Exhibit F, as
such Intellectual Property Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated as
of the Closing Date, between the Administrative Agent and the ABL Agent and
acknowledged and agreed to by the Borrower and certain of its Affiliates,
substantially in the form of Exhibit H, as such agreement may be amended,
modified or replaced from time to time.
"INTEREST PAYMENT DATE" means, (a) as to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan or Tranche B Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"INTEREST PERIOD" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Loan Notice; PROVIDED
THAT:
(a) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Rate Loan, such Business Day falls in another calendar
20
month, in which case such Interest Period shall end on the next preceding
Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period with respect to any portion of the Loans shall
extend beyond the Maturity Date; and
(d) no Interest Period with respect to any portion of the Loans shall
extend beyond a date on which the Borrower is required to make a scheduled
payment of principal thereof, unless the sum of (a) the aggregate principal
amount of Loans that are Base Rate Loans PLUS (b) the aggregate principal amount
of Loans that are Eurodollar Rate Loans with Interest Periods expiring on or
before such date equals or exceeds the principal amount required to be paid on
Loans on such date.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"INVESTMENT" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment (other than
adjustments for the repayment of, or the refund of capital with respect to, the
original principal amount of any such Investment).
"INVESTMENT POLICIES" means the Borrower's U.S. Deferred Compensation
Plan for Executives and Outside Directors Statement of Investment Policy in the
form delivered to the Administrative Agent prior to the Closing Date, as such
document may be amended from time to time in accordance with Section 7.12.
21
"IP COLLATERAL" means, collectively, the IP Rights that constitute
Collateral under the Intellectual Property Security Agreement.
"IP RIGHTS" has the meaning specified in Section 5.17.
"IRS" means the United States Internal Revenue Service.
"LAWS" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof.
"LEAD ARRANGER" means Banc of America Securities LLC in its capacity as
the sole lead arranger and sole book manager and its successors.
"LENDER" has the meaning specified in the introductory paragraph
hereto.
"LENDING OFFICE" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"LIEN GRANTOR" means "GRANTOR" as defined in the Intellectual Property
Security Agreement.
"LOAN" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Tranche A Loan or a Tranche B Loan.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Fee Letter, the
Guaranty and the Collateral Documents.
"LOAN NOTICE" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.
"LOAN PARTIES" means, collectively, the Borrower and each of the
Subsidiaries party to the Guaranty or any of the Collateral Documents.
22
"LOS/DOS BUSINESS" means the ownership and operation by the Borrower or
a Subsidiary of the Borrower, whether directly or through joint ventures with
third parties in partnership, corporate or other form, of businesses engaged
solely in selling apparel and accessories and related products including,
without limitation, selling through retail stores, outlet stores, telephone
sales, catalog or other mail orders, and electronic sales. LOS/DOS Business
shall not include any business engaging in manufacturing or in selling and in
manufacturing.
"LS&CO. DEFERRED COMPENSATION PLAN" has the meaning specified in
Section 7.05(g).
"LS&CO. TRUST" has the meaning specified in Section 7.05(g).
"LS&CO. TRUST AGREEMENT" has the meaning specified in Section 7.05(g).
"LSFCC" means Levi Xxxxxxx Financial Center Corporation, a California
corporation, formerly Levi Xxxxxxx Credit Corp., a California corporation, and
any successors.
"LSIFCS" means Levi Xxxxxxx International Group Finance Coordination
Services C.V.A./S.C.A., a Belgian corporation, and any successors.
"MASTER AGREEMENT" has the meaning specified in the definition of "SWAP
CONTRACT".
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"MATERIAL DOMESTIC SUBSIDIARY" means any Domestic Subsidiary that is a
Material Subsidiary.
"MATERIAL FOREIGN SUBSIDIARY" means any Material Subsidiary (other than
a Restricted Subsidiary) if such Material Subsidiary is (a) not a Domestic
Subsidiary and (b) owned by the Borrower either directly or indirectly through a
chain of one or more Domestic Subsidiaries.
"MATERIAL SUBSIDIARY" means (a) any Subsidiary of the Borrower, (i) the
net book value of which is $5,000,000 or more or (ii) the annual gross revenue
of
23
which is $15,000,000 or more, and (b) any other Subsidiary of the Borrower that
holds, directly or indirectly, any IP Collateral, or is a party to, or has any
rights or benefits with respect to, any agreement relating thereto, other than
those Subsidiaries set forth on Schedule 1.01B in respect of the IP Collateral
and (c) any other Subsidiary of the Borrower designated by the Borrower to be a
"MATERIAL SUBSIDIARY" for purposes of this Agreement. Notwithstanding the
foregoing, no Subsidiary shall be a "MATERIAL SUBSIDIARY" pursuant to subclause
(b) of this definition solely because such Subsidiary is granted a right to use
IP Collateral by a Loan Party; PROVIDED that such Subsidiary's right of use
(other than any Permitted Right) does not restrict the Loan Parties from
otherwise using, transferring or licensing such IP Collateral.
"MATURITY DATE" means September 29, 2009, provided that (x) if the 2006
Notes Refinancing Condition is not met in accordance with the provisions set
forth in Section 2.06(b), the Maturity Date will be August 1, 2006 and (y) if
the 2008 Notes Refinancing Condition is not met in accordance with the
provisions set forth in Section 2.06(b), the Maturity Date will be October 15,
2007.
"MAXIMUM RATE" has the meaning specified in Section 10.10.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means any security instrument (whether designated as a deed
of trust or a mortgage or by any similar title) executed and delivered by any
Loan Party with respect to Second-Lien Collateral that are real property assets,
in each case in form and substance reasonably acceptable to the Administrative
Agent.
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"NET CASH PROCEEDS", with respect to any Disposition of any property or
asset, means cash payments (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received by the Borrower or any of its
Subsidiaries from such Disposition, net of any bona fide direct costs incurred
in connection with such Disposition, including (a) income taxes reasonably
estimated to be actually payable within two years of the date of such
Disposition as a result of any gain recognized in connection with such
Disposition and (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is (i) required to
be repaid under the terms thereof as a result of such Disposition and (ii)
actually paid at the time of receipt of such cash payment to a Person that is
not an Affiliate of any Loan Party or of any Affiliate
24
of any Loan Party; PROVIDED, HOWEVER, that for purposes of clause (a) above, if,
at the time such taxes are actually paid or otherwise satisfied, the amount of
the reserve therefor exceeds the amount paid or otherwise satisfied, then the
Borrower shall prepay the outstanding Loans in accordance with the terms of
Section 2.04, in an amount equal to the amount of such excess reserve.
"NOTES" means Tranche A Notes and Tranche B Notes.
"OBLIGATIONS" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.
"OECD" means the Organization for Economic Cooperation and Development.
"ORDINARY COURSE SWAP CONTRACTS" means any and all interest rate swaps,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, interest rate
options, forward foreign exchange transactions, put or call transactions, cap
transactions, floor transactions, collar transactions, currency swaps,
cross-currency rate swaps, currency options, spot contracts or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, in each case that are (or were)
entered into by any Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments, investments,
assets, or property held or reasonably anticipated by such Person, or changes in
the value of securities issued by such Person and not for purposes of
speculation or taking a "market view" and that do not contain any provision
("walk-away" provision) exonerating the non-defaulting party from its obligation
to make payments on outstanding transactions to the defaulting party.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any
25
agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"ORIGINAL CURRENCY" has the meaning specified in Section 10.18(a).
"OTHER CURRENCY" has the meaning specified in Section 10.18(a).
"OTHER TAXES" has the meaning specified in Section 3.01(b).
"OUTSTANDING AMOUNT" means, with respect to Tranche A Loans or Tranche
B Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments thereof occurring
on such date.
"PARTICIPANT" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any "EMPLOYEE PENSION BENEFIT PLAN" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"PERMITTED FOREIGN INVENTORY TRANSACTION" means any financing with any
Person of inventory owned by a Foreign Subsidiary which will be treated as
Indebtedness, which financing is secured solely by such inventory and other
related assets customarily included as security interests in inventory financing
transactions (such as related books and records).
"PERMITTED FOREIGN RECEIVABLES TRANSACTION" means any arrangement of
Foreign Subsidiaries or foreign branches of Domestic Subsidiaries providing for
sales, transfers or conveyances of, or granting of security interests in,
Foreign Receivables; PROVIDED that the aggregate outstanding amount for all such
arrangements of foreign branches of Domestic Subsidiaries shall not at any time
exceed $35,000,000.
"PERMITTED RIGHT" means any right to use IP Collateral granted by a
Loan Party to a Subsidiary that restricts such Loan Party from using,
transferring or licensing such IP Collateral solely in the jurisdiction or
jurisdictions in which such Subsidiary has been granted such right; PROVIDED
that (a) such Subsidiary may not sub-license any such right except to another
Subsidiary or the Borrower
26
or, in the ordinary course of business, to operators of franchise retail stores
in their respective jurisdiction or jurisdictions and (b) either (i) such Loan
Party is entitled (by amendment to the applicable license agreement or
otherwise) to terminate or cancel such right at any time without payment or
consideration of any material amount or satisfaction of any other condition
involving the imposition of material obligations or (ii) such right is
immaterial to the operations or financial condition of such Loan Party.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any "EMPLOYEE BENEFIT PLAN" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"PLEDGED DOMESTIC SUBSIDIARY" means a Domestic Subsidiary (other than a
Guarantor or LSFCC) 100% of the Equity Interests of which are owned by a Loan
Party and are pledged under the Second Lien Pledge and Security Agreement.
"PLEDGED FOREIGN SUBSIDIARY" means a Material Foreign Subsidiary no
more than 65% of the Equity Interests of which is pledged under the Second-Lien
Pledge and Security Agreement.
"PLEDGED INDEBTEDNESS" has the meaning specified in the Second-Lien
Pledge and Security Agreement.
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or priority
over any other Equity Interests issued by such Person upon any distribution of
such Person's property and assets, whether by dividend or upon liquidation.
"PRINCIPAL PROPERTY" means any contiguous or proximate parcel of real
property owned by, or leased to, the Borrower or any of its Restricted
Subsidiaries, and any equipment located at or comprising a part of any such
property, having a gross book value (without deduction of any depreciation
reserves), as of the date of determination, in excess of 1% of Consolidated Net
Tangible Assets (as defined in the 1996 Instruments); PROVIDED, HOWEVER, that in
the event that the 1996 Instruments, or the limitations regarding Liens granted
by the Borrower or Restricted Subsidiaries contained in the 1996 Instruments,
are no longer binding on the Borrower, no property shall be a Principal
Property.
27
"PRO RATA SHARE" means with respect to all payments, computations and
other matters relating to (a) the Tranche A Loan of any Lender, the percentage
obtained by DIVIDING (i) the principal amount of the Tranche A Loan of that
Lender BY (ii) the aggregate principal amount of the Tranche A Loans of all
Lenders, (b) the Tranche B Loan of any Lender, the percentage obtained by
DIVIDING (i) the principal amount of the Tranche B Loan of that Lender BY (ii)
the aggregate principal amount of the Tranche B Loans of all Lenders, and (c)
the Loans of any Lender, the percentage obtained by DIVIDING (i) the aggregate
principal amount of the Loans of such Lender BY (ii) the aggregate principal
amount of Loans of all Lenders, in any such case as the applicable percentage
may be adjusted by assignments permitted pursuant to Section 10.07. The initial
Pro Rata Shares of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office.
"REAL ESTATE" means all now or hereafter owned or leased estates in
real property of the Loan Parties, including, without limitation, all fees,
leaseholds and future interests, together with all of the Loan Parties' now or
hereafter owned or leased interests in the improvements thereon, the fixtures
attached thereto and the easements appurtenant thereto.
"REAL PROPERTY ASSET" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"REAL ESTATE FINANCING TRANSACTIONS" means any arrangement with any
Person pursuant to which the Borrower or any of its Subsidiaries incurs
Indebtedness secured by a Lien on real property of the Borrower or any of its
Subsidiaries and related personal property.
"REDEEMABLE" means, with respect to any Equity Interest, Indebtedness
or other right or obligation, any such Equity Interest, Indebtedness or other
right or obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer or (b) is redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 10.07(c).
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed
28
receptacles containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or groundwater.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"REQUIRED LENDERS" means, as of any date of determination, Lenders
having more than 50% of the aggregate outstanding principal amount of Loans.
"REQUIRED LENDERS (TRANCHE A)" means, as of any date of determination,
Lenders having more than 50% of the aggregate outstanding principal amount of
Tranche A Loans.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower which owns
or leases a Principal Property; PROVIDED, HOWEVER, that in the event that the
1996 Instruments, or the limitations regarding Liens granted by or on the Equity
Interests or Indebtedness of Restricted Subsidiaries contained in the 1996
Instruments, are no longer binding on the Borrower, no Subsidiary of the
Borrower shall be a Restricted Subsidiary.
"S&P" means Standard and Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"SECOND-LIEN COLLATERAL" means the Collateral in which Liens are
purported to be granted pursuant to the Second-Lien Pledge and Security
Agreement, the Mortgages and the Foreign Pledge Agreements.
"SECOND-LIEN GRANTOR" means "GRANTOR" as defined in the Second-Lien
Pledge and Security Agreement.
"SECOND-LIEN IP COLLATERAL" means the IP Rights that constitute
Collateral under the Second-Lien Pledge and Security Agreement.
"SECOND-LIEN PLEDGE AND SECURITY AGREEMENT" means, the Second-Lien
Pledge and Security Agreement executed and delivered by the parties thereto on
29
the Closing Date, substantially in the form of Exhibit G, as such Second-Lien
Pledge and Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"SECURED PARTIES" means, collectively, the Agents and the Lenders.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on any date
of determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SPECIFIED REFINANCING INDEBTEDNESS" means any Indebtedness incurred to
refinance the 2006 Notes or the 2008 Notes pursuant to and in accordance with
Section 2.06(b).
"SUBSIDIARY" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person, PROVIDED, HOWEVER, in no event shall the LS&Co. Trust be
considered to be a Subsidiary of the Borrower. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that term
in Section 9.01.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options,
30
forward foreign exchange transactions, put or call transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any international foreign exchange master agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
"MASTER AGREEMENT"), including any such obligations or liabilities under any
Master Agreement.
"SWAP TERMINATION VALUE" means, with respect to each Swap Contract on
any date of determination, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contract, an amount equal to
the termination value, expressed in Dollars, as determined by the Borrower;
PROVIDED, HOWEVER, that in the event that two Lenders determine that the
xxxx-to-market value, expressed in Dollars, for any Swap Contract, as determined
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Swap Contract, is greater than the termination
value for such Swap Contract determined by the Borrower, the Swap Termination
Value of such Swap Contract shall be the amount determined by such Lenders.
"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"TAXES" has the meaning specified in Section 3.01(a).
"TITLE COMPANY" means one or more other title insurance companies
reasonably satisfactory to the Administrative Agent.
"TRADEMARK LICENSE AGREEMENT" means the Trademark License Agreement,
dated as of the Closing Date, between the Administrative Agent and the ABL
Agent, as such Trademark License Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"TRANCHE A COMMITMENT" means the commitment of a Lender to make a
Tranche A Loan to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the corresponding
amount set forth opposite such Lender's name on Schedule 2.01 or in the
31
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement, and "TRANCHE A COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE A LOANS" means the Loans made by the Lenders to the Borrower
pursuant to Section 2.01(a).
"TRANCHE A NOTES" means any promissory notes of the Borrower issued
pursuant to Section 2.11 to evidence the Tranche A Loans of any Lenders,
substantially in the form of Exhibit B-1 annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TRANCHE B COMMITMENT" means the commitment of a Lender to make a
Tranche B Loan to the Borrower pursuant to Section 2.01(b) in an aggregate
principal amount at any one time outstanding not to exceed the corresponding
amount set forth opposite such Lender's name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement, and "TRANCHE B COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE B LOANS" means the Loans made by the Lenders to the Borrower
pursuant to Section 2.01(b).
"TRANCHE B NOTES" means any promissory notes of the Borrower issued
pursuant to Section 2.11 to evidence the Tranche B Loans of any Lenders,
substantially in the form of Exhibit B-2 annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TYPE" means, with respect to any Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNITED STATES" and "U.S." mean the United States of America.
"UNPLEDGED FOREIGN SUBSIDIARIES" means Foreign Subsidiaries none of the
Equity Interests of which is pledged pursuant to the Second-Lien Pledge and
Security Agreement.
"VOTING TRUST AGREEMENT" means the Voting Trust Agreement entered into
as of April 15, 1996 by and among Xxxxxx X. Xxxx, Xxxxx X. Xxxx, Xx., Xxxxx X.
Xxxx, Xx. and F. Xxxxxx Xxxxxxx as the Voting Trustees and the stockholders of
the Borrower (as successor to LSAI Holding Corp.) who are parties thereto.
32
"VOTING TRUSTEES" means the individuals designated as Voting Trustees
under the Voting Trust Agreement.
Section 1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "HEREIN," "HERETO," "HEREOF" and "HEREUNDER" and words
of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "INCLUDING" is by way of example and not limitation.
(iv) The term "DOCUMENTS" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a later
specified date, the word "FROM" means "FROM AND INCLUDING"; the words "TO" and
"UNTIL" each mean "TO BUT EXCLUDING"; and the word "THROUGH" means "TO AND
INCLUDING."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
Section 1.03. ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
33
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
Section 1.04. ROUNDING. Any financial ratios required to be maintained by
the Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
Section 1.05. REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
Section 1.06. TIMES OF DAY. Unless otherwise specified, all references
herein to times of day shall be references to Pacific Standard time (daylight or
standard, as applicable).
ARTICLE 2
THE COMMITMENTS AND BORROWINGS
Section 2.01. TERM LOANS. Subject to the terms and conditions set forth
herein, each Lender that has a Tranche A Commitment severally agrees to lend to
the Borrower on the Closing Date an amount not exceeding its Tranche A
Commitment, to be used in accordance with the provisions of Sections 6.11 and
7.10, and each Lender that has a Tranche B Commitment severally agrees to lend
to the Borrower on the Closing Date an amount not exceeding its Tranche B
Commitment, to be used in accordance with the provisions of Sections 6.11 and
7.10. The Borrower may make only one borrowing under each of the Tranche A
Commitments and the Tranche B Commitments. Amounts borrowed under this
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Section 2.01 and subsequently repaid or prepaid may not be reborrowed. Tranche A
Loans may be Base Rate Loans or Eurodollar Rate Loans, and Tranche B Loans shall
bear a fixed interest rate, in each case as further provided herein.
Section 2.02. BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) The Borrowing, each conversion of Tranche A Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 9:00 a.m. three Business Days prior to the requested date of the
Borrowing of Loans, or any conversion to or continuation of Eurodollar Rate
Loans or any conversion of Eurodollar Rate Loans to Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this (a) must be confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower (or
any individual designated by such Responsible Officer in writing to the
Administrative Agent). Each conversion or continuation shall be in a principal
amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
Loan Notice (whether telephonic or written) shall specify (i) whether the
Borrower is requesting the Borrowing, a conversion of Tranche A Loans from one
Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of each Class of
Loans to be borrowed (which shall be specified by the Administrative Agent to
the Borrower prior to the date of the Loan Notice relating to the Borrowing),
converted or continued, (iv) if Tranche A Loans, the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (v) if applicable,
the duration of the Interest Period with respect thereto. If, with respect to
Tranche A Loans, the Borrower fails to specify a Type of Loan in a Loan Notice
or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Loans shall be made as, or converted to, Base
Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans. If the Borrower requests the Borrowing of, or
a conversion to, or a continuation of Eurodollar Rate Loans in any such Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in (a). In
the case of the Borrowing, each Lender shall make the amount of its Loan
available to the
35
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 10:00 a.m. on the Business Day specified in the
applicable Loan Notice. Upon satisfaction of the applicable conditions set forth
in Section 4.01, the Administrative Agent shall make all funds so received
available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of the
Administrative Agent with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders (Tranche A).
(d) The Administrative Agent shall promptly notify the Borrower and the
relevant Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
relevant Lenders of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public announcement of such
change.
(e) After giving effect to all conversions of Tranche A Loans from one Type
to the other, and all continuations of Tranche A Loans as the same Type, there
shall not be more than ten Interest Periods in effect with respect to Tranche A
Loans.
Section 2.03. VOLUNTARY PREPAYMENTS.
(a) Subject to Section 2.03(c), the Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay Loans
in whole or in part without premium or penalty; PROVIDED that (i) such notice
must be received by the Administrative Agent not later than 9:00 a.m. (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B)
one Business Day prior to the date of prepayment of Base Rate Loans or Tranche B
Loans, and (ii) any prepayment shall be in a principal amount of $10,000,000 or
a whole multiple of $5,000,000 in excess thereof or if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and, if applicable, the Type(s) of Loans to
be prepaid; provided that the Borrower may prepay Loans of one Class pursuant to
this Section 2.03(a) only if contemporaneously therewith the Borrower shall
prepay Loans of the other Class (pro rata on the basis of aggregate principal
amount of
36
Loans of each Class then outstanding) pursuant to this Section 2.03(a). The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Loan shall be
accompanied by all accrued interest thereon, together with any additional
amounts required pursuant to Section 3.05 (provided that any prepayment in
connection with the termination and refinancing of this Agreement may be
conditioned on the closing of such refinancing).
(b) Any voluntary prepayments of the Loans pursuant to Section 2.03(a)
shall be applied to prepay ratably the Loans of each Class (on the basis of
aggregate principal amount of Loans of each Class then outstanding). Each such
prepayment of the Loans shall be applied pro rata to the remaining scheduled
payments of principal set forth in Section 2.06(a). Each such prepayment of
Tranche A Loans shall be applied in such manner to the Type of Tranche A Loans
specified by the Borrower in the relevant notice of prepayment (or, if the
Borrower shall have failed to so specify, the Type of Tranche A Loans as the
Administrative Agent shall determine in its discretion).
(c) Voluntary prepayments of Loans pursuant to Section 2.03(a) will not be
permitted during certain periods ("PREPAYMENT BLOCKAGE PERIODS"). The initial
Prepayment Blockage Period will be the period from the Closing Date through
March 31, 2006. The subsequent Prepayment Blockage Period will be the period
from the date the 2006 Notes Refinancing Condition is met through March 31,
2007. For purposes of this Section 2.03(c), the 2006 Notes Refinancing Condition
will be deemed to have been met only upon receipt by the Administrative Agent of
written notice from the Borrower of its effectiveness.
Section 2.04. MANDATORY PREPAYMENTS.
(a) No later than the date of receipt by the Borrower or any Subsidiary of
Net Cash Proceeds in respect of any Disposition (including without limitation
any license) of IP Collateral permitted by Section 7.05(f), the Borrower shall
prepay the Loans in an aggregate principal amount equal to the amount of such
Net Cash Proceeds, PROVIDED that any such prepayment occurring during any
Prepayment Blockage Period shall be subject to Section 2.04(d).
(b) Concurrently with any prepayment of the Loans pursuant to this Section
2.04, the Borrower shall deliver to the Administrative Agent an officer's
certificate demonstrating the calculation of the amount of the applicable Net
Cash Proceeds that gave rise to such prepayment. In the event that the Borrower
shall subsequently determine that the actual amount was greater than the amount
set forth in such officer's certificate, the Borrower shall promptly make an
additional
37
prepayment of the Loans in an amount equal to the amount of such excess, and the
Borrower shall concurrently therewith deliver to the Administrative Agent an
officer's certificate demonstrating the derivation of the additional amount
resulting in such excess.
(c) Any mandatory prepayments of the Loans pursuant to Section 2.04(a),
shall be applied to prepay ratably the Loans of each Class (on the basis of
aggregate principal amount of Loans of each Class then outstanding). Each such
prepayment of the Loans shall be applied pro rata to the remaining scheduled
payments of principal set forth in Section 2.06(a).
(d) Any mandatory prepayments of the Loans pursuant to Section 2.04(a) that
occur during any Prepayment Blockage Period shall be subject to the following
clauses (i) through (iii):
(i) At least three Business Days prior to any date (an "UNSCHEDULED
PREPAYMENT DATE") on which any mandatory prepayment of the Loans (an
"UNSCHEDULED PREPAYMENT") would, but for the provisions of this paragraph
(d), otherwise be made pursuant to this Section 2.04, the Borrower shall
deliver a notice (a "BORROWER PREPAYMENT NOTICE") to the Administrative
Agent, which notice shall (x) indicate the intention of the Borrower to
make an Unscheduled Prepayment, (y) set forth the amount of such
Unscheduled Prepayment and (z) contain an offer to prepay on a specified
date (each such date, a "DEFERRED UNSCHEDULED PREPAYMENT DATE"), which
shall be the tenth Business Day after the date of the Borrower Prepayment
Notice. Upon receipt of any Borrower Prepayment Notice, the Administrative
Agent shall promptly deliver a notice conforming to the requirements of
paragraph (d)(ii) (a "PREPAYMENT NOTICE") to each Lender, and such
Unscheduled Prepayment shall not occur on such Unscheduled Prepayment Date,
but shall instead be deferred as provided in subclause (z) of this Section
2.04(d)(i);
(ii) Each Prepayment Notice shall be in writing, shall refer to this
Section 2.04 and shall (w) notify each Lender of the contents and the date
of the Borrower Prepayment Notice, (x) set forth the prepayment amount that
the applicable Lender will be entitled to receive if it accepts prepayment
of its Loans in accordance with this paragraph, (y) request such Lender to
notify the Borrower and the Administrative Agent in writing, no later than
the third Business Day prior to the Deferred Unscheduled Prepayment Date,
of such Lender's acceptance or rejection (in each case, in whole and not in
part) of such offer of prepayment and (z) inform such Lender that the
failure by such Lender to reject such offer in writing on or before the
third Business Day prior to such Deferred
38
Unscheduled Prepayment Date shall be deemed an acceptance of such
prepayment offer; and
(iii) On each Deferred Unscheduled Prepayment Date, the Borrower shall
pay to the Administrative Agent an amount equal to the amount that would
otherwise have been payable by the Borrower pursuant to paragraph (a) of
this Section on the related Unscheduled Prepayment Date but for the
provisions of this paragraph (d). Of such amount, the Administrative Agent
shall apply to the prepayment of the outstanding Loans of each of the
Lenders that shall have accepted (or been deemed to have accepted)
prepayment (each, an "ACCEPTING LENDER") its ratable share (determined as
provided in Section 2.04(c)) of the amount so paid by the Borrower. The
balance of the amount so paid by the Borrower, if any, shall be returned
promptly to the Borrower by the Administrative Agent.
Section 2.05. CHANGE OF CONTROL PREPAYMENTS. If a Change of Control shall
occur, the Borrower shall, within ten days after the occurrence thereof, give
each Lender notice thereof, which notice shall describe in reasonable detail the
facts and circumstances giving rise thereto and shall specify an Optional
Termination Date for purposes of this Section (the "OPTIONAL TERMINATION DATE")
which date shall not be less than 30 nor more than 60 days after the date of
such notice. Each Lender may, by notice to the Borrower and the Administrative
Agent given not less than three Business Days prior to the Optional Termination
Date, declare the Loans made by it (together with accrued interest thereon and a
premium of 1% of the principal amount thereof) and any other amounts payable
hereunder for its account to be, and such Loans and such other amounts shall
thereupon become, due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower, in each case
effective on the Optional Termination Date.
Section 2.06. REPAYMENT OF LOANS; DETERMINATION OF MATURITY DATE.
(a) The Borrower shall make principal payments on the Loans in an amount
equal to 0.25% of the initial aggregate principal amount of the Loans payable on
the last Business Day of each Fiscal Quarter commencing with the first Fiscal
Quarter for the Fiscal Year 2004 and pay the remaining balance of the initial
aggregate principal amount of the Loans on the Maturity Date; PROVIDED that the
Loans and all other amounts owed hereunder with respect to the Loans shall be
paid in full no later than the Maturity Date.
(b) In order to meet the conditions referred to in the definition of
"MATURITY DATE", the Borrower will be required to have refinanced or irrevocably
set aside funds, on terms and conditions reasonably satisfactory to the
Administrative Agent, to repay in whole each of the 2006 Notes (the "2006 NOTES
REFINANCING
39
CONDITION") and the 2008 Notes (the "2008 NOTES REFINANCING CONDITION") by May
1, 2006 in the case of the 2006 Notes and by July 15, 2007 in the case of the
2008 Notes, in each case in accordance with this Section 2.06(b). The Borrower
shall use all reasonable efforts to incur any refinancing Indebtedness on terms
and conditions similar to those contained in that certain Indenture dated as of
December 4, 2002 between the Borrower and Wilmington Trust Company, as trustee,
relating to the Borrower's 12-1/4% Senior Notes due 2012, and in any event,
except as provided in the next sentence, refinancing Indebtedness shall not (w)
be Guaranteed by any Subsidiary of the Borrower, (x) require any principal
payments prior to January 31, 2010, (y) be secured by any assets of the Borrower
or any of its Subsidiaries or (z) contain any financial maintenance covenants.
Notwithstanding the foregoing, the Borrower or any Subsidiary may incur
refinancing Indebtedness which is secured by accounts receivable or inventory
not constituting Collateral (I.E., Foreign Receivables or Inventory created or
located outside the United States), or (in an aggregate principal amount of
refinancing Indebtedness not to exceed $75,000,000) with other assets not
subject to Liens in favor of the Applicable Agent as of the date hereof, and
such Indebtedness need not comply with conditions (x), (y) and (z) of the
preceding sentence; PROVIDED that for purposes of determining the principal
amount of the 2006 Notes and the 2008 Notes deemed to have been refinanced in
accordance with this Section 2.06(b), the principal amount of such secured
refinancing Indebtedness shall be reduced by the portion thereof that is payable
prior to September 29, 2009. The Borrower may repay in whole or in part the 2006
Notes and the 2008 Notes in cash instead of refinancing them, in an aggregate
amount not to exceed the Consolidated Excess Cash Flow for the period from
August 25, 2003 to the end of the most recent Fiscal Quarter for which the
Borrower has delivered financial statements pursuant to Section 6.01(a) or (b)
so long as, after giving effect on a pro forma basis to the cash repayment
thereof, (A) the Consolidated Leverage Ratio does not exceed 4.75 to 1 (in the
case of the 2006 Notes) or 4.5 to 1 (in the case of the 2008 Notes), (B) the
Consolidated Interest Coverage Ratio exceeds 1.85 to 1 (in the case of the 2006
Notes) and 2.0 to 1 (in the case of the 2008 Notes), (C) at the time of such
repayment, no Default with respect to any amount payable or any Event of Default
has occurred and is continuing and (D) Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer to the effect set
forth in (A), (B) and (C) above (including calculations demonstrating compliance
with (A) and (B) above).
Section 2.07. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
GUARANTY.
(a) Application of Proceeds of Collateral. All proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any Collateral Document
may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in
40
part by the Administrative Agent in the order of priority as set forth in
Section 8.03.
(b) Application of Payments Under Guaranty. All payments received by the
Administrative Agent under the Guaranty shall be applied promptly from time to
time by the Administrative Agent in the order of priority as set forth in
Section 8.03.
Section 2.08. INTEREST.
(a) Subject to the provisions of Section 2.08(b):
(i) Tranche A Loans shall bear interest through maturity as follows:
(A) if a Base Rate Loan, then the sum of the Base Rate PLUS
5.875% per annum; and
(B) if a Eurodollar Rate Loan, then the sum of the Eurodollar
Rate for each Interest Period PLUS 6.875% per annum.
(ii) Each Tranche B Loan shall bear interest through maturity at a
rate per annum equal to 10.0%.
(b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at an interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws. Furthermore, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at an interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
Section 2.09. FEES. The Borrower shall pay to the Lead Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
41
Section 2.10. COMPUTATION OF INTEREST AND FEES. All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America's "prime rate" shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid.
Section 2.11. EVIDENCE OF DEBT. The Loans made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans in addition to such accounts or records. Each
Lender may attach schedules to its Notes and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
Section 2.12. PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 12:00 noon on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 12:00 noon shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business
42
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "COMPENSATION PERIOD") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan included in the applicable Borrowing. If such Lender does not pay such
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to
the rate of interest applicable to the applicable Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative Agent or the
Borrower may have against any Lender as a result of any default by such
Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this Section 2.12(c) shall be conclusive,
absent manifest error.
43
(d) If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article 2, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Borrowing set
forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans are several and
not joint. The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
Section 2.13. SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in Section 10.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation
44
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Obligations purchased to the
same extent as though the purchasing Lender were the original owner of the
Obligations purchased.
ARTICLE 3
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01. TAXES. Any and all payments by the Borrower to or for the
account of the Administrative Agent or any Lender under any Loan Document shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
EXCLUDING, in the case of the Administrative Agent and each Lender, taxes
imposed on or measured by its overall net income, and franchise taxes imposed on
it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office and, if
the forms provided by a Foreign Lender pursuant to Section 10.15(a) at the time
such Foreign Lender first becomes a party to this Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Foreign
Lender provides new forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (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 3.01), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
45
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
(c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 3.01) paid by the Administrative Agent and such Lender, (ii)
amounts payable under Section 3.01(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this Section 3.01(d) shall be made within 30 days after the date
the Lender or the Administrative Agent makes a demand therefor.
Section 3.02. ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
46
Section 3.03. INABILITY TO DETERMINE RATES. If the Required Lenders
(Tranche A) determine that for any reason adequate and reasonable means do not
exist for determining the Eurodollar Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders (Tranche A)) revokes such notice. Upon receipt of such
notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will be
deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.
Section 3.04. INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY .
(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law (which term for purposes of this
Section 3.04 shall include without limitation all applicable administrative
orders, directed duties, requests, licenses, guidelines, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law), or such Lender's compliance therewith,
there shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Loans, or a reduction in the
amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this Section 3.04(a) any such increased
costs or reduction in amount resulting from (i) taxes (as to which Section 3.01
shall govern) and (ii) changes in the basis or rate of taxation of overall net
income or overall gross income by the United States or any foreign jurisdiction
or any political subdivision of either thereof under the Laws of which such
Lender is organized or has its Lending Office), then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction; PROVIDED that the Borrower
shall not be required to compensate a Lender pursuant to this Section 3.04(a)
for any increased cost or reduction in respect of a period occurring more than
180 days prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor unless the circumstances
giving rise to such increased cost or reduction became applicable retroactively,
in which case no such time limitation shall apply so long as such Lender
requests compensation within 180 days from the date such circumstances become
applicable.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
47
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction; PROVIDED that the Borrower shall not be required
to compensate a Lender pursuant to this Section 3.04(b) for any reduction in
respect of a period occurring more than 180 days prior to the date that such
Lender notifies the Borrower of such Lender's intention to claim compensation
therefor unless the circumstances giving rise to such reduction became
applicable retroactively, in which case no such time limitation shall apply so
long as such Lender requests compensation within 180 days from the date such
circumstances become applicable.
Section 3.05. FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Eurodollar
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any
Eurodollar Rate Loan on the date or in the amount notified by the Borrower;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
Section 3.06. MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A
certificate of the Administrative Agent or any Lender claiming compensation
48
under this Article 3 and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Administrative Agent or such Lender may use any
reasonable averaging and attribution methods.
Section 3.07. SURVIVAL. All of the Borrower's obligations under this Article 3
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE 4
CONDITIONS PRECEDENT TO BORROWING
Section 4.01. CONDITIONS OF BORROWING. The obligation of each Lender to
make its Loans hereunder is subject to satisfaction of the following conditions
precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to each of the Lead Arranger and the
Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and the Guaranty (in
each case, from each of the Loan Parties party thereto), sufficient in
number for distribution to the Administrative Agent, each Lender and the
Borrower;
(ii) executed counterparts of the Intellectual Property Security
Agreement, the Second-Lien Pledge and Security Agreement, the Intercreditor
Agreement and the Trademark License Agreement;
(iii) if requested by any Lender at least two Business Days before the
Closing Date, a Tranche A Note or Tranche B Note executed by the Borrower
in favor of each Lender requesting such Note;
(iv) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of the Secretary of each Loan Party
as the Administrative Agent may require evidencing the identity, authority
and capacity of the Responsible Officers thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;
49
(v) such documents and certifications as the Administrative Agent
may reasonably require to evidence that each Loan Party is duly organized
or formed, and that each is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires
such qualification (except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect);
(vi) favorable opinions of Shearman & Sterling LLP, special counsel
to the Loan Parties, and Xxxxxx X. Xxxxxx, Esq., Senior Vice President and
General Counsel of the Borrower, each in form and substance reasonably
satisfactory to the Lenders and addressed to the Administrative Agent and
each Lender;
(vii) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by such
Loan Party and the validity against such Loan Party of the Loan Documents
to which it is a party, and such consents, licenses and approvals shall be
in full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;
(viii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Section 4.01(f) and (g)
have been satisfied, (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect other than as disclosed in the Borrower's public
filings with the SEC on or prior to September 19, 2003; (C) a calculation
of Consolidated EBITDA and Consolidated Funded Indebtedness as of the last
day of the Fiscal Quarter of the Borrower most recently ended prior to the
Closing Date and (D) a list of the 15 countries (other than the United
States) in which the highest percentages of the aggregate gross revenues of
the Borrower and its Subsidiaries on a consolidated basis for Fiscal Year
2002 were generated;
(ix) evidence that all insurance required to be maintained pursuant
to the Loan Documents as specified in Sections 5.10 and 6.07 has been
obtained and is in effect;
(x) evidence that (A) the Existing Credit Agreement and the
Existing Receivables Agreements have been or concurrently with the Closing
Date are being terminated or defeased in form and substance reasonably
acceptable to the Lead Arranger, (B) all Liens securing obligations under
the Existing Credit Agreement and the Existing
50
Receivables Agreements have been or concurrently with the Closing Date are
being released and (C) all obligations under the Existing Credit Agreement
and the Existing Receivables Agreements have been paid (or, in the case of
the Existing Receivables Agreements, funds for the payment thereof have
been irrevocably set aside on terms and conditions reasonably satisfactory
to the Lead Arranger);
(xi) a copy of the Investment Policies certified by a Responsible
Officer to be true, correct and complete as of the Closing Date; and
(xii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the Lead Arranger or the Required
Lenders reasonably may require.
(b) The Administrative Agent shall have received evidence satisfactory to
it that the Collateral and Guaranty Requirement shall have been satisfied.
(c) No actions, suits, proceedings, claims or disputes shall be pending or,
to the knowledge of the Borrower or any of its Subsidiaries, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.
(d) Any fees required to be paid on or before the Closing Date shall have
been paid. All accrued and invoiced reasonable fees and expenses of the
Administrative Agent and the Lead Arranger (including the fees and expenses of
counsel for the Administrative Agent and the Lead Arranger) shall have been
paid.
(e) There shall have occurred no event or circumstance since the date of
the Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect other
than as disclosed in the Borrower's public filings with the SEC on or prior to
September 19, 2003.
(f) The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct on and as of the date of the proposed
Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.
51
(g) No Default shall exist, or would result from such proposed Borrowing.
(h) The Administrative Agent shall have received a Loan Notice in
accordance with the requirements hereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
Section 5.01. EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.
Each Loan Party (a) is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation, has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
Section 5.02. AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or constitute a
default or require any payment to be made under or result in any breach or
contravention of, or the creation of any Lien under, (i) any Contractual
Obligation to which such Person is a party (except the Loan Documents) or (ii)
any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its property is subject; or (c) violate
any Law.
Section 5.03. GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except as
contemplated by the Loan Documents.
52
Section 5.04. BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.
Section 5.05. FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements and the consolidating balance sheets
and statements of income of the Borrower and its Subsidiaries as of the
corresponding dates and for the corresponding periods, respectively (i) were
prepared in accordance with GAAP consistently applied in all material respects
throughout the period covered thereby, except as otherwise expressly noted
therein and (ii) fairly present the financial condition of the Borrower and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied in all
material respects throughout the period covered thereby, except as otherwise
expressly noted therein. To the best knowledge of the Borrower after reasonable
investigation, neither the Borrower nor any of its Subsidiaries has any
obligation under any Guarantee, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that, as of the
Closing Date, is not reflected in the Audited Financial Statements and that, in
any such case, could have a Material Adverse Effect.
(b) The unaudited consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries dated for each of the Fiscal Quarters ended
February 23, 2003 and May 25, 2003, and the related consolidated and
consolidating statements of income and consolidated statement of cash flows for
each such Fiscal Quarter were prepared in accordance with GAAP consistently
applied in all material respects throughout the period covered thereby, except
as otherwise expressly noted therein, and fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i)
and (ii), to the absence of footnotes and to normal year-end audit adjustments.
(c) The forecasted balance sheets and statements of income of the Borrower
and its Subsidiaries delivered to the Lenders pursuant to Section 6.02(d) or
contained in the Information Memorandum were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery, the Borrower's best estimate of its future financial
performance.
53
(d) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect other than as
disclosed in the Borrower's public filings with the SEC on or prior to September
19, 2003.
Section 5.06. LITIGATION. There are no actions, suits, proceedings, claims
or disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.
Section 5.07. NO DEFAULT. Neither the Borrower nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
Section 5.08. OWNERSHIP OF PROPERTY; LIENS; REAL PROPERTY.
(a) Each of the Borrower and each Subsidiary has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
(b) As of the Closing Date, Schedule 5.08 annexed hereto contains a true,
accurate and complete list of (i) all fee interests in any Real Property Assets
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Loan Party, regardless of whether such
Loan Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Except as
specified in Schedule 5.08 annexed hereto, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and the
Borrower does not have knowledge of any material default that has occurred and
is continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against such
Loan Party in accordance with its terms, except as enforcement may be limited by
54
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
Section 5.09. ENVIRONMENTAL COMPLIANCE. The operations and properties of
each Loan Party and each of its Subsidiaries comply in all respects with all
applicable Environmental Laws and Environmental Permits except where such
noncompliance could not have a Material Adverse Effect, and no circumstances
exist that would be reasonably likely to (a) form the basis of an Environmental
Claim against any Loan Party or any of its Subsidiaries or any of their
properties that could have a Material Adverse Effect or (b) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law that could have a Material Adverse
Effect.
Section 5.10. INSURANCE. The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrower, or with Majestic Insurance
International Ltd., a wholly-owned Subsidiary of the Borrower, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies of similar size engaged in similar businesses and owning similar
properties in localities where the Borrower or the applicable Subsidiary
operates. Property insurance insuring real and personal property on a
replacement cost or (in respect of real property held for Disposition that is
not Collateral) actual cash value basis unless otherwise noted in Section 6.07
and business interruption coverage policies contain a loss payable subsection or
endorsement, satisfactory in form and substance to the Administrative Agent,
that names the Applicable Agent for the benefit of the Secured Parties as the
loss payee thereunder for any covered loss with respect to the Collateral, as
its interests may appear. General and automobile liability insurance policies
name the Applicable Agent for the benefit of the Secured Parties as an
additional insured thereunder, as its interests may appear. All insurance
policies provide for at least 30 days prior written notice to the Applicable
Agent of any material modification or cancellation of such policy.
Section 5.11. TAXES.
(a) The Borrower and its Subsidiaries have filed all federal, state and
other material tax returns and reports required to be filed, and have paid all
federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.
55
(b) Neither any Loan Party nor any of its Subsidiaries is party to any tax
sharing agreement.
(c) No issues have been raised by taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse Effect.
Section 5.12. ERISA COMPLIANCE; FOREIGN EMPLOYEE BENEFIT PLANS.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) Other than as set forth on Schedule 5.12(c), no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has a Funded
Current Liability Percentage of less than 90% as of the valuation date of the
most recently completed valuation (or if such Funded Current Liability
Percentage is less than 90% as of such valuation date, such Funded Current
Liability Percentage satisfies Section 412(l)(9)(B) of the Code); (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA.
(d) With respect to each retirement plan or arrangement mandated by a
government other than the United States (a "FOREIGN GOVERNMENT SCHEME OR
56
ARRANGEMENT") and with respect to each employee benefit plan maintained or
contributed to by any Loan Party or any Subsidiary of any Loan Party that is not
subject to United States law (a "FOREIGN PLAN"), each Foreign Plan is in
compliance with the applicable Foreign Government Scheme or Arrangement and
neither the Borrower nor any of its Subsidiaries has incurred or reasonably
expects to incur any liability under any Foreign Government Scheme or
Arrangement, which noncompliance or liability would be reasonably likely to have
a Material Adverse Effect.
Section 5.13. SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part A of Schedule 5.13,
which also sets forth the organizational structure of the Borrower and its
Subsidiaries as of the date hereof. Part B of Schedule 5.13 sets forth a
complete and accurate list of the Borrower's Material Subsidiaries, as of the
end of the Fiscal Year ended November 24, 2002, and the aggregate gross revenues
of the Subsidiaries of the Borrower not constituting Material Subsidiaries for
such Fiscal Year were not more than 5% of the aggregate gross revenues of the
Borrower and its Subsidiaries on a consolidated basis for such Fiscal Year. Part
C of Schedule 5.13 sets forth a complete and accurate list of all Restricted
Subsidiaries as of the date hereof. Schedule 6.13(b) sets forth a complete and
accurate list of all Material Foreign Subsidiaries as of the date hereof. No
Loan Party or any of their respective Subsidiaries have any Investments other
than those permitted under Section 7.02. None of the organizational documents of
any of the Domestic Subsidiaries or Material Foreign Subsidiaries contain any
material restriction against the pledge of such Subsidiary's Equity Interests to
the Applicable Agent pursuant to the Collateral Documents.
Section 5.14. MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock. Following the
application of the proceeds of each Borrowing, not more than 25% of the value of
the assets (either of the Borrower only or of the Borrower and its Subsidiaries
on a consolidated basis) subject to the provisions of Section 7.01 or Section
7.05 or subject to any restriction contained in any agreement or instrument
between the Borrower and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of Section 8.01(e) will be margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding
57
Company Act of 1935, or (ii) is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.
Section 5.15. DISCLOSURE. No representation or warranty of any Loan Party
contained in this Agreement or any other document, or any certificate or written
statement furnished to the Administrative Agent or any Lender by any Loan Party
for use in connection with any transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact or omits to
state or will omit to state a material fact known to such Loan Party necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading, it being understood
that this Section 5.15 does not purport to cover the representations and
warranties with respect to the consolidated forecasted balance sheets and
statements of income of the Borrower and its Subsidiaries delivered to the
Lenders pursuant to Section 6.01 or contained in the Information Memorandum.
Section 5.16. COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS. Each of the
Borrower and each Subsidiary is in compliance in all material respects with the
requirements of its respective Contractual Obligations and all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such Contractual Obligation, requirement
of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
Section 5.17. INTELLECTUAL PROPERTY, LICENSES, ETC. (a)
(i) The Borrower and its Subsidiaries own, or possess the right to
use, all of the trademarks, service marks, trade names, copyrights,
patents, patent rights, franchises, licenses and other intellectual
property rights and all goodwill associated therewith (collectively, "IP
RIGHTS") that are necessary to the conduct of their respective businesses
(the "BORROWER IP RIGHTS"). Except (x) as set forth in Schedule 5.17(a)(i)
and (y) for any right granted to a Subsidiary by a Loan Party which does
not restrict the Loan Parties from using, transferring or licensing any
Borrower IP Rights (other than Permitted Rights), no Subsidiary (other than
a Guarantor) owns or possesses the right to use any Borrower IP Rights.
(ii) Except as set forth in Schedule 5.17(a)(ii), no claim is pending
or, to the best of the Borrower and each Subsidiary's knowledge, threatened
to the effect that (1) the operations of the Borrower or any Subsidiary
(including, without limitation, any slogan or other advertising device,
product, process, method, substance, part or other material now
58
employed or now contemplated to be employed by the Borrower or any
Subsidiary) infringe upon or conflict with the asserted rights of any other
person under any IP Right or other proprietary right, or (2) the Borrower
IP Rights are invalid or unenforceable, and, to the best of the Borrower's
and each Subsidiary's knowledge there is no reasonable basis for any such
claim (whether or not pending or threatened), except for any claims that,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. To the knowledge of the Borrower and each
Subsidiary's knowledge, no other Person has infringed, misappropriated or
otherwise violated any Borrower IP Right, except for such infringements,
misappropriations or violations that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(iii) Except (x) as set forth in Schedule 5.17(a)(iii) and (y) for
licenses granted by the Borrower or any Subsidiary to a third party in
respect of the Borrower IP Rights outside of the United States that,
individually or in aggregate, are not material to the operations or
financial condition of the Borrower or any Subsidiary, there exist no
restrictions on the disclosure, use or transfer of any Borrower IP Rights.
(iv) Except as expressly contemplated by this Agreement, the other
Loan Documents or the ABL Credit Agreement, the consummation of the
transactions contemplated by this Agreement will not alter, impair or
extinguish any Borrower IP Rights.
(v) The Borrower and the Guarantors hold all right, title and
interest in and to all Borrower IP Rights free and clear of any liens,
charges, restrictions, claims or encumbrances of any nature whatsoever,
other than such Borrower IP Rights held by Subsidiaries as set forth on
Schedule 5.17(a)(v).
(vi) In each case where a trademark registration or trademark
application, service xxxx registration or service xxxx application, or
copyright registration or copyright application included in the Borrower IP
Rights is held by assignment, the assignment has been duly recorded with
the governmental authority from which the registration issued or before
which the application or application for registration is pending.
(b) Set forth on Schedule 5.17(b) hereto is a complete and accurate
list of all registered patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof (except for
licenses granted by the Borrower or any Subsidiary to a third party in
respect of the Borrower IP Rights outside of the United States that,
individually or in aggregate, are not material to the operations or
financial condition of the Borrower or any Subsidiary) of any Loan Party or
any of its Subsidiaries as of the date hereof,
59
showing the jurisdiction in which registered, the registration number and
the date of registration.
Section 5.18. MATTERS RELATING TO COLLATERAL.
(a) The execution and delivery of the Collateral Documents by the Loan
Parties, together with the actions taken to date pursuant to Sections 4.01(b),
6.12 and 6.14 are effective to create in favor of the Applicable Agent for the
benefit of the Lenders, as security for the Obligations, a valid Lien on all of
the Collateral that can be perfected by possession, by filing a UCC financing
statement, by filing a Mortgage with the appropriate real property office, by
recording an appropriate document with the PTO or by a deposit account control
agreement or by a securities account control agreement (in accordance with the
priority set forth in the Collateral Documents), and all filings and other
actions necessary or desirable to perfect and maintain the perfection and status
of such Liens have been duly made or taken and remain in full force and effect,
other than the filing or recording of any UCC financing statements or any
documents required to be filed with the PTO delivered to the Applicable Agent
for filing or recording (but not yet filed or recorded), the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of the Applicable Agent and certain registrations and filings and
delivery of documents and other items required under Section 6.14.
(b) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
either (i) the pledge or grant by any Loan Party of the Liens purported to be
created in favor of the Applicable Agent pursuant to any of the Collateral
Documents or (ii) the exercise by the Applicable Agent of any rights or remedies
in respect of any Collateral (whether specifically granted or created pursuant
to any of the Collateral Documents or created or provided for by applicable
law), except for filings or recordings contemplated by Article 4 and Sections
5.18(a), 6.12 and 6.14 and except as may be required, in connection with the
disposition of any pledged Equity Interests that constitute Collateral, by laws
generally affecting the offering and sale of securities and generally affecting
the disposition of the Collateral by a secured creditor.
(c) Except such as may have been filed in favor of the Administrative Agent
as contemplated by Section 5.18(a), (i) no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office, except in respect
of Liens permitted pursuant to Section 7.01 and (ii) no effective filing
covering all or any part of the IP Collateral or the Second-Lien IP Collateral
is on file in the PTO.
60
(d) The pledge of the Equity Interests that constitute Collateral pursuant
to the Collateral Documents does not violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System.
(e) All information supplied to the Administrative Agent by or on behalf of
any Loan Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
Section 5.19. MATERIALLY ADVERSE AGREEMENTS. Neither any Loan Party nor any
of its Subsidiaries is a party to any indenture, loan or credit agreement or any
lease or other agreement or instrument or subject to any Organization Documents
or corporate restrictions that would be reasonably likely to have a Material
Adverse Effect.
Section 5.20. SOLVENCY. Each Loan Party is, individually and together with
its Subsidiaries, Solvent.
Section 5.21. EXTRAORDINARY EVENTS. Neither the business nor the properties
of any Loan Party or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that would be reasonably likely to have a
Material Adverse Effect.
Section 5.22. CONDUCT OF BUSINESS. The Borrower and its Subsidiaries,
considered together, are engaged only in businesses related or incidental to the
manufacture and sale of clothing and accessories and the LOS/DOS Business.
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, the Borrower
shall, and shall (except in the case of the covenants set forth in Sections 6.01
and 6.11) cause each Subsidiary to:
Section 6.01. FINANCIAL STATEMENTS. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) As soon as available, but in any event within 90 days after the end of
each Fiscal Year of the Borrower, consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries as at the end of such Fiscal Year, and the
61
related consolidated and consolidating statements of income and consolidated
stockholders' equity and cash flows for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Required Lenders,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards and shall not be subject to any "GOING CONCERN" or like
qualification or exception or any qualification or exception as to the scope of
such audit; and
(b) As soon as available, but in any event within 45 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year of the Borrower,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as at the end of such Fiscal Quarter, and the related consolidated
and consolidating statements of income and consolidated cash flows for such
Fiscal Quarter and for the portion of the Borrower's Fiscal Year then ended,
setting forth in each case in comparative form the figures for the corresponding
Fiscal Quarter of the previous Fiscal Year and the corresponding portion of the
previous Fiscal Year, all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.
Section 6.02. CERTIFICATES; OTHER INFORMATION. Deliver to the
Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor nothing came to their attention that caused them
to believe that the Borrower failed to comply with the terms, covenants,
provisions or conditions of Section 7.18 insofar as they relate to accounting
matters or, if any such Default shall exist, stating the nature and status of
such event;
(b) concurrently with the delivery of the financial statements referred to
in Section 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;
(c) promptly after the same are available, copies of each annual report or
proxy sent to the stockholders of the Borrower, and copies of all annual,
regular, periodic and special reports and registration statements which the
Borrower may file or be required to file with the SEC under Section 13 or 15(d)
of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Administrative Agent pursuant hereto;
62
(d) as soon as available, but in any event no later than 60 days after the
end of each Fiscal Year, forecasts prepared by management of the Borrower, in
form satisfactory to the Administrative Agent, of consolidated balance sheets,
income statements and cash flow statements of the Borrower and its Subsidiaries,
such forecasts with respect to consolidated balance sheets and income statements
to be prepared on a monthly basis for the Fiscal Year following such Fiscal Year
and on an annual basis for each Fiscal Year thereafter until the Maturity Date,
and such forecasts with respect to cash flow statements to be prepared on an
annual basis for each Fiscal Year;
(e) promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of any Loan Party or of any of
its Subsidiaries pursuant to the terms of the 1996 Instruments or any indenture,
loan or credit or similar agreement executed in connection with a Capital
Markets Transaction and not otherwise required to be furnished pursuant to any
other clause of Sections 6.01 or 6.02;
(f) promptly upon receipt thereof, copies of all notices, requests and
other documents received by any Loan Party or any of its Subsidiaries under or
pursuant to any instrument, indenture, loan or credit or similar agreement
regarding or related to any breach or default by any Loan Party thereto or any
other event that could materially impair the value of the interests or the
rights of any Loan Party or otherwise have a Material Adverse Effect and copies
of any amendment, modification or waiver of any provision of any instrument,
indenture, loan or credit or similar agreement and, from time to time upon
request by the Administrative Agent, such information and reports regarding such
instruments, indentures and loan and credit and similar agreements as the
Administrative Agent may reasonably request;
(g) upon request of the Administrative Agent or any Lender, as soon as
available, but in any event within 60 days after the end of each Fiscal Year, a
report summarizing any material changes in the insurance coverage maintained for
the Borrower and its Subsidiaries during such Fiscal Year and containing such
additional information as any agent, or any Lender through the Administrative
Agent, may reasonably specify;
(h) upon request of the Administrative Agent or any Lender, no later than
60 days after the end of each Fiscal Year, a list of all Subsidiaries of each
Loan Party showing (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity Interests
authorized and the number outstanding, and the percentage of each such class of
its Equity Interests owned (directly or indirectly) by such Loan Party and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights;
63
(i) upon request of the Administrative Agent or any Lender, no later than
60 days after the end of each Fiscal Year, a list of the 15 countries (other
than the United States) in which the highest percentages of the aggregate gross
revenues of the Borrower and its Subsidiaries on a consolidated basis for such
Fiscal Year were generated;
(j) no later than 60 days after the end of each Fiscal Year, a list of all
Subsidiaries indicating whether each such Subsidiary is a Guarantor, Pledged
Domestic Subsidiary, Pledged Foreign Subsidiary or Unpledged Foreign Subsidiary,
and the percentage of the aggregate gross revenues of the Borrower and its
Subsidiaries on a consolidated basis for such Fiscal Year contributed by each
such Subsidiary;
(k) not later than 45 days after the end of each Fiscal Quarter, a list of
all licenses entered into by the Borrower during such Fiscal Quarter with third
parties, granting exclusive IP Rights in respect of apparel products or product
lines sold by the Borrower in the United States and included within the
Borrower's inventory at the time of entry by the Borrower into such license; and
(l) promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01 or Section
6.02 may be delivered electronically and if so delivered, shall be deemed to
have been delivered (i) with respect to any such documents that are included in
materials otherwise filed with the SEC, on the date on which the Borrower posts
such documents, or provides a link thereto on the Borrower's website on the
Internet at the website address listed on Schedule 10.02; or (ii) on the date on
which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (x)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (y) the Borrower shall notify (which may
be by facsimile or electronic mail) the Administrative Agent and each Lender of
the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (I.E., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(b) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
64
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
Section 6.03. NOTICES. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) any breach or non-performance
of, or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental Authority
(including any change in the status or the financial effect on the Borrower or
any of its Subsidiaries of such matters previously disclosed to the
Administrative Agent and the Lenders); or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or
any Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event or a decrease in the Funded
Current Liability Percentage for any Plan at the end of any Fiscal Quarter to
less than 90% PROVIDED that if such Funded Current Liability Percentage
satisfies Section 412(l)(9)(B) of the Code, then notice under this Section
6.03(c) shall not be required; and
(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary.
Each notice pursuant to this Section 6.03 shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been or may be breached.
Section 6.04. PAYMENT OF TAXES. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets (other than tax liabilities, assessments and governmental
charges not exceeding $5,000,000 in the aggregate); PROVIDED that no such
obligation or liability need be paid or discharged so long as (a) it is being
contested in good faith by appropriate proceedings diligently conducted, (b)
65
adequate reserves in accordance with GAAP are being maintained by the Borrower
or such Subsidiary and (c) in the case of a charge or claim which has or may
become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
Section 6.05. PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.04 or 7.05; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary or desirable
in the normal conduct of its business, except to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (c)
preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
Section 6.06. MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
Section 6.07. MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, or with Majestic
Insurance International Ltd., a wholly-owned Subsidiary of the Borrower,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by businesses of similar size engaged in
the same or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other businesses and
providing for not less than 30 days' prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance.
Section 6.08. COMPLIANCE WITH LAWS. Comply in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
Section 6.09. BOOKS AND RECORDS. Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
66
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower or such Subsidiary, as the
case may be.
Section 6.10. INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; PROVIDED, HOWEVER, that if an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
Section 6.11. USE OF PROCEEDS. Use the proceeds of the Borrowings (a) to
refinance obligations of the Borrower and its Subsidiaries under the Existing
Credit Agreement and the Existing Receivables Agreements and (b) for working
capital, capital expenditures and other general corporate purposes not in
contravention of any Law or of any Loan Document.
Section 6.12. FURTHER ASSURANCES REGARDING COLLATERAL AND GUARANTY
REQUIREMENT.
(a) Will execute and deliver any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), that may be required under any
applicable law, or that the Administrative Agent or the Required Lenders may
reasonably request, to cause the Collateral and Guaranty Requirement to be and
remain satisfied, all at the Borrower's expense. The Loan Parties will provide
to the Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Collateral Documents. In
furtherance and not in limitation of the foregoing, in the event that any Person
becomes a Domestic Subsidiary and otherwise qualifies as a Guarantor under the
definition of "Guarantor" after the date hereof, the Borrower shall promptly
notify the Administrative Agent of that fact and, within thirty (30) days of
such Person becoming a Domestic Subsidiary and qualifying as a Guarantor under
the definition of "Guarantor":
(i) (A)cause such Subsidiary to execute and deliver to the Applicable
Agent a counterpart of each of the Guaranty, the Intellectual Property
Security Agreement and the Second-Lien Pledge and Security
67
Agreement and to take all such further actions and execute all such further
documents and instruments as may be necessary or, in the opinion of the
Applicable Agent, desirable to create in favor of the Applicable Agent, for
the benefit of the Lenders, a valid and perfected priority lien on all of
the personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents and (B) deliver to the Applicable
Agent all certificates representing the Equity Interests of such Subsidiary
(accompanied by irrevocable undated stock powers, duly endorsed in blank)
owned by the respective pledgor; and
(ii) deliver to the Applicable Agent, together with such Loan
Documents, (A) certified copies of such Subsidiary's Certificate or
Articles of Incorporation, together with a good standing certificate from
the Secretary of State of the jurisdiction of its incorporation, to the
extent generally available and a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from
the appropriate taxing authority of such jurisdiction, each to be dated a
recent date prior to their delivery to the Applicable Agent, (B) a copy of
such Subsidiary's Bylaws, certified by its corporate secretary or an
assistant secretary as of a recent date prior to their delivery to the
Applicable Agent, (C) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (1) the fact that the attached
resolutions of the Board of Directors of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (2)
the incumbency and signatures of the officers of such Subsidiary executing
such Loan Documents, and (D) a favorable opinion of counsel to such
Subsidiary, in form and substance reasonably satisfactory to the Applicable
Agent and its counsel, as to (1) the due organization and good standing of
such Subsidiary, (2) the due authorization, execution and delivery by such
Subsidiary of such Loan Documents, (3) the enforceability of such Loan
Documents against such Subsidiary, and (4) such other matters (including
matters relating to the creation and perfection of Liens in any Collateral
pursuant to such Loan Documents) as the Applicable Agent may reasonably
request, all of the foregoing to be satisfactory in form and substance to
the Applicable Agent and its counsel; and
(b) In the event that any Person becomes a Material Foreign Subsidiary
after the date hereof, promptly notify the Applicable Agent of that fact and use
its commercially reasonable efforts to take or cause to be taken all such
actions, execute and deliver or cause to be executed and delivered all such
agreements, documents and instruments and make or cause to be made all such
filings and recordings that may be necessary or, in the opinion of the
Applicable Agent, desirable in order to create in favor of the ABL Agent and the
Administrative Agent, for the benefit of their respective secured parties, a
valid and perfected
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security interest in 65% of the Equity Interests owned by the Borrower or any
other Loan Party of such Person; PROVIDED, HOWEVER, that no action shall be
required to be taken by any Loan Party with respect to the Equity Interests of
any Material Foreign Subsidiary pursuant to this subsection in the event that
the Borrower and the Applicable Agent agree in good faith that the pledge of
such Equity Interests would result in a significant tax liability to any Loan
Party or would otherwise be impracticable;
PROVIDED, HOWEVER, neither the Borrower nor any of its Subsidiaries shall be
required pursuant to this Section 6.12 to grant Liens on any Principal Property,
the Equity Interests of a Restricted Subsidiary or any Indebtedness of or issued
by a Restricted Subsidiary.
Section 6.13. MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL. From
and after the Closing Date, in the event that (i) the Borrower or any Guarantor
acquires any fee interest in real property (other than Principal Property) with
an appraised value in excess of $10,000,000 or (ii) at the time any Person
becomes a Guarantor, such Person owns or holds any fee interest in real property
(other than Principal Property) with an appraised value in excess of
$10,000,000, in either case excluding any such Real Estate the encumbrancing of
which requires the consent of any applicable lessor or (in the case of clause
(ii) above) then-existing senior lienholder, where the Borrower or such
Guarantor is unable to obtain such lessor's or senior lienholder's consent (any
such non-excluded Real Estate described in the foregoing clause (i) or (ii)
being an "ADDITIONAL MORTGAGED PROPERTY"), deliver to the Applicable Agent, as
soon as practicable after such Person acquires such Additional Mortgaged
Property or becomes a Guarantor, as the case may be, the following:
(a) ADDITIONAL MORTGAGE. A fully executed and notarized Mortgage (an
"ADDITIONAL MORTGAGE"), duly recorded in all appropriate places in all
applicable jurisdictions, encumbering the interest of such Loan Party in such
Additional Mortgaged Property;
(b) OPINIONS OF COUNSEL. A favorable opinion of counsel to such Loan Party,
in form and substance reasonably satisfactory to the Applicable Agent and its
counsel, as to the due authorization, execution and delivery by such Loan Party
of such Additional Mortgage and such other matters as the Applicable Agent may
reasonably request;
(c) TITLE INSURANCE. (i) If required by the Applicable Agent, an ALTA
mortgagee title insurance policy or an unconditional commitment therefor (an
"ADDITIONAL MORTGAGE POLICY") issued by the Title Company with respect to such
Additional Mortgaged Property, in an amount satisfactory to the Applicable Agent
(which in the absence of a Default or Event of Default shall be an amount not to
exceed 10% of the gross book value of such Additional Mortgaged
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Property), insuring fee simple title to such Additional Mortgaged Property
vested in such Loan Party and assuring the Administrative Agent that such
Additional Mortgage creates a valid and enforceable priority mortgage lien on
such Additional Mortgaged Property, subject only to a standard survey exception
and such other exceptions as are customary or are reasonably acceptable to the
Applicable Agent, which Additional Mortgage Policy (A) shall include an
endorsement for mechanics' liens and for any other matters reasonably requested
by the Applicable Agent and (B) shall provide for affirmative insurance and such
reinsurance as the Applicable Agent may reasonably request, all of the foregoing
in form and substance reasonably satisfactory to the Applicable Agent; and (ii)
evidence satisfactory to the Applicable Agent that such Loan Party has (A)
delivered to the Title Company all certificates and affidavits required by the
Title Company in connection with the issuance of the Additional Mortgage Policy
and (B) paid to the Title Company or to the appropriate governmental authorities
all expenses and premiums of the Title Company in connection with the issuance
of the Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with recording
the Additional Mortgage in the appropriate real estate records;
(d) TITLE REPORT. If no Additional Mortgage Policy is required with respect
to such Additional Mortgaged Property, a title report issued by the Title
Company with respect thereto, dated not more than thirty (30) days prior to the
date such Additional Mortgage is to be recorded and satisfactory in form and
substance to the Applicable Agent;
(e) COPIES OF DOCUMENTS RELATING TO TITLE EXCEPTIONS. Copies of all
recorded documents listed as exceptions to title or otherwise referred to in the
Additional Mortgage Policy or title report delivered pursuant to clause (c) or
(d) above; and
(f) MATTERS RELATING TO FLOOD HAZARD PROPERTIES. (i) Evidence, which may be
in the form of a letter from an insurance broker or a municipal engineer, as to
(A) whether such Additional Mortgaged Property is a Flood Hazard Property and
(B) if so, whether the community in which such Flood Hazard Property is located
is participating in the National Flood Insurance Program, (ii) if such
Additional Mortgaged Property is a Flood Hazard Property, such Loan Party's
written acknowledgement of receipt of written notification from the Applicable
Agent (A) that such Additional Mortgaged Property is a Flood Hazard Property and
(B) as to whether the community in which such Flood Hazard Property is located
is participating in the National Flood Insurance Program, and (iii) in the event
such Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program, evidence
that the Borrower has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the Board of
Governors of the Federal Reserve System.
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Section 6.14. POST CLOSING ACTIONS RELATING TO COLLATERAL. Within 180 days
after the Closing Date or such later date agreed to by the Administrative Agent
in its sole discretion, deliver to the Administrative Agent evidence that all
action that the Administrative Agent may deem necessary or desirable in order to
perfect and protect the First Priority Lien of the Administrative Agent for the
benefit of the Secured Parties in all foreign registrations of the IP Collateral
in Belgium, Canada, France, Germany, Italy, Japan, Mexico, The Netherlands
(including the Netherlands Antilles), Spain, and the United Kingdom (each, a
"SPECIFIED JURISDICTION") and any other jurisdiction reasonably requested by the
Administrative Agent, to the extent no action shall be required in one or more
of the Specified Jurisdictions pursuant to clause (ii) of the proviso set forth
below, has been taken; PROVIDED that (i) taking such action does not result in
the granting of a trademark registration or application therefor in the name of
the Administrative Agent or the Secured Parties or (ii) no action shall be
required to be taken in any jurisdiction pursuant to this subsection in the
event that the Borrower and the Administrative Agent agree in good faith that
such action would be commercially impracticable.
(b) Within 180 days after the Closing Date, or such later date agreed to by
the Administrative Agent in its sole discretion, deliver to the Applicable Agent
such documents as shall be necessary to create and perfect a security interest
in 65% of the Equity Interests of each Material Foreign Subsidiary listed on
Schedule 6.14(b), together with the certificates or instruments, if any,
representing 65% of such Equity Interests accompanied by irrevocable undated
instruments of transfer, duly endorsed in blank and otherwise in form and
substance satisfactory to the Applicable Agent; PROVIDED, HOWEVER, that no
action shall be required to be taken by any Loan Party with respect to the
Equity Interests of any Material Foreign Subsidiary pursuant to this subsection
in the event that the Borrower and the Administrative Agent agree in good faith
that the pledge of such Equity Interests would result in a significant tax
liability to any Loan Party or would otherwise be impracticable.
(c) Within ninety (90) days after the Closing Date, or such later date
agreed to by the Applicable Agent in its sole discretion, deliver to the
Applicable Agent an original intercompany promissory note duly executed by each
Foreign Subsidiary (other than any Restricted Subsidiary) and duly endorsed to
the Applicable Agent.
(d) Within thirty (30) days after the Closing Date, or such later date
agreed to by the Applicable Agent in its sole discretion, the Borrower shall
have, and shall cause each Guarantor to have, (i) delivered to the Applicable
Agent a control agreement in form and substance satisfactory to the Applicable
Agent in respect of each deposit account of such Person and (ii) taken all other
steps necessary or, in the opinion of the Applicable Agent, desirable to ensure
that the Applicable Agent has sole dominion and control over such deposit
account;
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PROVIDED that if any Borrower or any Guarantor is unable to obtain such an
agreement from any financial institution, the Borrower shall, or shall cause the
applicable Guarantor to, within sixty (60) days after receiving a written
request by the Applicable Agent to do so, transfer all amounts in the applicable
deposit account to a deposit account maintained at a financial institution from
which the Borrower or such Guarantor has obtained such an agreement; PROVIDED
FURTHER that this Section 6.14(d) shall not apply to any deposit account held by
any such Person to the extent (A) such deposit account is maintained with a
financial institution with which such Person has not entered into any control
agreement in relation to any other deposit account, (B) the aggregate assets in
all deposit accounts maintained by such Person with such financial institution
at no time exceed $100,000 and (C) the aggregate amount of assets in all deposit
accounts of all such Persons not subject to control agreements in reliance on
the exemption provided pursuant to clauses (A)-(C) of this proviso at no time
exceed $1,000,000.
(e) Within thirty (30) days after the Closing Date, or such later date
agreed to by the Applicable Agent in its sole discretion, the Borrower shall
have, and shall cause each Guarantor to have, delivered to the Applicable Agent
evidence that all action that the Applicable Agent may deem necessary or
desirable in order to perfect and protect the priority Lien of the Applicable
Agent for the benefit of the Lenders in all domestic registrations of patents
has been taken.
(f) Within thirty (30) days after the Closing Date, or such later date
agreed to by the Applicable Agent in its sole discretion, the Borrower shall
have delivered to the Applicable Agent in respect of the Little Rock, Arkansas
property owned by the Borrower all documents and taken all other actions
required pursuant to Section 6.13 and not previously delivered to the Applicable
Agent or taken, as the case may be, as though such property were an Additional
Mortgaged Property.
(g) Within thirty (30) days after the Closing Date, or such later date
agreed to by the Applicable Agent in its sole discretion, the Borrower shall
have delivered to the Applicable Agent evidence, in form, scope, and substance,
reasonably satisfactory to the Applicable Agent, of all insurance coverage and
related endorsements as required by Section 5.10.
(h) Within two (2) days after the Closing Date, or such later date agreed
to by the Applicable Agent in its sole discretion, the Borrower shall have, and
shall cause each Guarantor to have, delivered to the Administrative Agent
evidence that all action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the First Priority Lien of the
Administrative Agent for the benefit of the Lenders in domestic registrations of
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trademarks as provided in the Intellectual Property Security Agreement has been
taken.
ARTICLE 7
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied:
Section 7.01. LIENS. The Borrower shall not, nor shall it permit any
Subsidiary nor the LS&Co. Trust to, directly or indirectly create, incur, assume
or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired or sign or file or suffer to exist under
the UCC of any jurisdiction, a financing statement that names the Borrower or
any of its Subsidiaries or the LS&Co. Trust as debtor, or sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens securing the obligations of the Borrower and the Guarantors under
the ABL Credit Agreement or other obligations arising under or in connection
with Cash Management Services and Ordinary Course Swap Contracts secured by the
ABL Credit Agreement, PROVIDED that such obligations shall be secured only by
substantially the same types of assets securing the ABL Credit Agreement as of
the date hereof;
(c) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, PROVIDED that the property covered thereby is
not increased (except as contemplated thereby) and any renewal or extension of
the obligations secured or benefited thereby is permitted pursuant to Section
7.03(c)(i);
(d) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(e) materialmen's, mechanics', workmen's and repairmen's Liens securing
obligations (other than Indebtedness for borrowed money) which are not overdue
for more than 30 days and carriers' and warehousemen's Liens and other similar
Liens arising in the ordinary course of business securing obligations (other
than Indebtedness for borrowed money) which are not overdue for more than 15
days or, in each case, which are being contested in good faith and by
appropriate
73
proceedings diligently conducted, if adequate reserves as required by GAAP with
respect thereto are maintained on the books of the applicable Person;
(f) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation (other than any Lien imposed by ERISA) so long as no foreclosure,
sale or similar proceedings have been commenced with respect to any portion of
the Collateral on account thereof;
(g) pledges or deposits to secure the performance of bids, trade contracts
and leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(h) easements, rights-of-way, zoning restrictions and other similar
encumbrances on title to real property that were not incurred in connection with
and do not secure Indebtedness and do not, either individually or in the
aggregate, materially interfere with the ordinary conduct of the Borrower and
its Subsidiaries, taken as a whole;
(i) Liens securing litigation or judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing appeal or
other surety bonds related to such judgments;
(j) purchase money Liens upon or in real property or personal property
acquired or held by the Borrower or any of its Subsidiaries in the ordinary
course of business to secure the purchase price of such property or to secure
Indebtedness incurred solely for the purpose of financing the acquisition or
improvement of any such property to be subject to such Liens (including, without
limitation, pursuant to capital leases or Equipment Financing Transactions), or
Liens existing on any such property at the time of acquisition (other than any
such Liens created in contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; PROVIDED, HOWEVER, that no such Lien shall
extend to or cover any property other than the property being acquired or
improved, and no such extension, renewal or replacement shall extend to or cover
any property not theretofore subject to the Lien being extended, renewed or
replaced; and PROVIDED FURTHER that the aggregate principal amount of the
Indebtedness secured by Liens permitted by this clause (j) shall not exceed the
amount permitted under Section 7.03(c)(iii) at any time outstanding;
(k) Liens in favor of customs and revenue authorities arising as a matter
of law or pursuant to a bond to secure payment of customs duties in connection
with the importation of goods;
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(l) Liens attaching to ownership interests in joint ventures (whether in
partnership, corporate or other form) engaged in the LOS/DOS Business or
attaching to intellectual property rights relating to the LOS/DOS Business;
(m) Liens created in connection with Permitted Foreign Inventory
Transactions or Permitted Foreign Receivables Transactions permitted under
Section 7.03(c)(vi); PROVIDED, HOWEVER, that no such Lien shall extend to or
cover property other than the property subject to such Permitted Foreign
Inventory Transaction or Permitted Foreign Receivables Transaction;
(n) Liens created pursuant to applications or reimbursement agreements
pertaining to documentary letters of credit which encumber documents and other
property of the Borrower or any of its Subsidiaries (other than LSFCC or the
LS&Co Trust) relating to such documentary letters of credit and the products and
proceeds thereof;
(o) Liens on any cash and Cash Equivalents that are the subject of a
repurchase agreement entered into in the ordinary course of business and
permitted under Section 7.02(d);
(p) any interest or title of a lessor or a sublessor and any restriction or
encumbrance to which the interest or title of such lessor or sublessor may be
subject that is incurred in the ordinary course of business and, either
individually or when aggregated with all other permitted Liens in effect on any
date of determination, could not be reasonably expected to have a Material
Adverse Effect;
(q) leases or subleases granted to others in the ordinary course of
business not interfering with the ordinary conduct of the business of the
grantor thereof;
(r) Liens arising solely by virtue of any statutory or common law provision
relating to banker's Liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; PROVIDED THAT (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Borrower or any of its Subsidiaries owning the affected deposit account or other
funds maintained with a creditor depository institution in excess of those set
forth by regulations promulgated by the Federal Reserve Board or any foreign
regulatory agency performing an equivalent function, and (ii) such deposit
account is not intended by the Borrower or any of its Subsidiaries to provide
collateral (other than such as is ancillary to the establishment of such deposit
account) to the depository institution;
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(s) Liens, assignments and pledges of rights to receive premiums, interest
or loss payments or otherwise arising in connection with workers' compensation
loss portfolio transfer insurance transactions or any insurance or reinsurance
agreements pertaining to losses covered by insurance, and Liens (including,
without limitation and to the extent constituting Liens, negative pledges) in
favor of insurers or reinsurers on pledges or deposits by the Borrower or any
Subsidiary under workmen's compensation laws, unemployment insurance laws or
similar legislation;
(t) Liens on property of any Foreign Subsidiary or a foreign branch of a
Domestic Subsidiary securing Indebtedness permitted under Section 7.03(c)(xv)
outstanding in an aggregate principal amount not to exceed $15,000,000 at any
time; and
(u) other Liens securing Indebtedness outstanding (including, without
limitation, Indebtedness arising under capital leases, Equipment Financing
Transactions and Real Estate Financing Transactions) of the Borrower or any of
its Subsidiaries (other than LSFCC or the LS&Co Trust) in an aggregate principal
amount not to exceed $75,000,000 at any time, PROVIDED that in no event shall
any IP Collateral be subject to any Lien permitted pursuant to this Section
7.01(u).
Section 7.02 . INVESTMENTS. The Borrower shall not, nor shall it permit any
Subsidiary or the LS&Co. Trust to, directly or indirectly make or hold any
Investments, except:
(a) Investments existing on the date hereof and described on Schedule 7.02
and any extensions or renewals thereof or conversions of any such loan
Investments to equity Investments;
(b) equity Investments by the Borrower and its Subsidiaries in their
Subsidiaries existing on the date hereof and described on Schedule 7.02;
(c) advances to officers, directors and employees of the Borrower or any of
its Subsidiaries for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments by the Borrower and its Subsidiaries in cash and Cash
Equivalents;
(e) Investments consisting of intercompany Indebtedness permitted under
Section 7.03(a)(i), 7.03(a)(iv), 7.03(b), 7.03(c)(i), 7.03(c)(v), 7.03(c)(vii),
7.03(c)(viii), 7.03(c)(ix), 7.03(c)(xi), 7.03(c)(xii) or 7.03(c)(xiii);
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(f) extensions of credit to customers or suppliers of the Borrower or any
of its Subsidiaries in the ordinary course of business and any Investments
received in satisfaction or partial satisfaction thereof;
(g) Investments by the Borrower in any Guarantor;
(h) Investments by any Guarantor in the Borrower or any other Guarantor;
(i) Investments by any Pledged Domestic Subsidiary in the Borrower, any
Guarantor or any other Pledged Domestic Subsidiary;
(j) Investments by any Pledged Foreign Subsidiary in the Borrower, any
Guarantor, any Pledged Domestic Subsidiary or any other Pledged Foreign
Subsidiary;
(k) Investments by any Unpledged Foreign Subsidiary (other than LSIFCS) in
the Borrower or any Subsidiary and Investments by LSIFCS in the Borrower, any
Guarantor, any Pledged Domestic Subsidiary or any Pledged Foreign Subsidiary;
(l) Investments by the Borrower in any of its Subsidiaries and Investments
by any of its Subsidiaries in the Borrower or any of its other Subsidiaries;
PROVIDED that the sum, without duplication, of (i) such Investments made after
the date hereof PLUS (ii) the aggregate principal amount of Indebtedness
permitted by Section 7.03(c)(xi) plus (iii) the aggregate dispositions permitted
by Section 7.05(i) shall not exceed the Available Amount; PROVIDED FURTHER that
Investments in Subsidiaries of the Borrower that are not Solvent immediately
prior to the making of any such Investment shall not exceed $10,000,000 in the
aggregate in any Fiscal Year;
(m) Investments by the Borrower in any of its Subsidiaries and Investments
by any of its Subsidiaries in the Borrower or any of its other Subsidiaries
resulting from a Disposition permitted under Section 7.05(k);
(n) Investments by any Subsidiary in any other Subsidiary formed in
connection with a Permitted Foreign Receivables Transaction permitted under
Section 7.03(c)(vi) in an amount not to exceed the proceeds thereof;
(o) Investments by any Subsidiary in any other Subsidiary formed in
connection with Permitted Foreign Inventory Transactions permitted under Section
7.03(c)(vi) in an amount not to exceed the proceeds thereof;
(p) other Investments by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.02 in an aggregate amount not to exceed
$35,000,000 at any time outstanding;
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(q) contribution of a promissory note executed by Levi Xxxxxxx & Co. Europe
S.A. in favor of Levi Xxxxxxx Continental S.A. (or its successors) from Levi
Xxxxxxx Continental S.A. (or its successors) to LSIFCS in connection with sales
permitted under Section 7.05(d) and 7.05(k);
(r) Investments, if any, by the Borrower into the LS&Co. Trust and by the
LS&Co. Trust permitted by the LS&Co. Trust Agreement; and
(s) Investments permitted under Section 7.04 and 7.06.
Section 7.03. INDEBTEDNESS. The Borrower shall not, nor shall it permit any
Subsidiary or the LS&Co. Trust to, directly or indirectly create, incur, assume
or suffer to exist any Indebtedness, except:
(a) in the case of the Borrower,
(i) Indebtedness owed to any Subsidiary, which Indebtedness, if owed
to any Guarantor, (A) shall constitute Pledged Indebtedness and (B) shall
be evidenced by promissory notes in form and substance satisfactory to the
Administrative Agent, shall be subordinated in right of payment to the
payment in full of the Obligations and such promissory notes shall be
pledged as security for the Obligations of the holder thereof under the
Loan Documents to which such holder is a party and delivered to the
Applicable Agent pursuant to the terms of the Second-Lien Pledge and
Security Agreement;
(ii) Indebtedness of the Borrower issued in a Capital Markets
Transaction provided such Indebtedness is unsecured and such Indebtedness
does not have a stated maturity date or required principal payments earlier
than January 31, 2010; and
(iii) Guarantees of the Borrower under the LS&Co. Trust Agreement,
provided that the investment activities of the LS&Co. Trust are in
compliance with the Investment Policies;
(iv) Guarantees of the Borrower in respect of the obligations of
Subsidiaries arising under or in connection with the Borrower's Cash
Management Services;
(b) in the case of Subsidiaries specified in this Section 7.03(b),
(i) Indebtedness owed to the Borrower or to any Guarantor by another
Guarantor, which Indebtedness (A) shall constitute Pledged Indebtedness and
(B) shall, except in the case of redeemable preferred stock, be evidenced
by promissory notes in form and substance satisfactory to the
Administrative Agent, shall be subordinated in right of
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payment in full of the Obligations, and such promissory notes shall be
pledged as security for the Obligations of the holder thereof under the
Loan Documents to which such holder is a party and delivered to the
Administrative Agent pursuant to the terms of the Second-Lien Pledge and
Security Agreement;
(ii) Indebtedness owed to any Pledged Domestic Subsidiary by any
Guarantor or another Pledged Domestic Subsidiary;
(iii) Indebtedness owed to any Pledged Foreign Subsidiary by any
Guarantor, any Pledged Domestic Subsidiary or another Pledged Foreign
Subsidiary;
(iv) Indebtedness owed to any Unpledged Foreign Subsidiary (other
than LSIFCS) by any Subsidiary and Indebtedness owed to LSIFCS by any
Guarantor, Pledged Domestic Subsidiary or Pledged Foreign Subsidiary; and
(v) Indebtedness owed to the Borrower or to any Guarantor by a
Pledged Domestic Subsidiary, a Pledged Foreign Subsidiary or a foreign
branch of any Pledged Domestic Subsidiary not to exceed in the aggregate
$50,000,000 at any time outstanding, which Indebtedness (A) shall
constitute Pledged Indebtedness and (B) shall, except in the case of
redeemable preferred stock, be evidenced by promissory notes in form and
substance satisfactory to the Administrative Agent, shall be subordinated
in right of payment in full of the Obligations, and such promissory notes
shall be pledged as security for the Obligations of the holder thereof
under the Loan Documents to which such holder is a party and delivered to
the Administrative Agent pursuant to the terms of the Second-Lien Pledge
and Security Agreement;
(c) in the case of the Borrower and Subsidiaries specified in this Section
7.03(c),
(i) Indebtedness of the Borrower and its Subsidiaries outstanding on
the Closing Date and listed on Schedule 7.03 hereto and any refinancing of
the industrial revenue bond obligations, capital leases and Equipment
Financing Transactions listed on Schedule 7.03 hereto provided there is no
increase in the aggregate principal amount of such obligations;
(ii) Indebtedness of the Borrower and its Subsidiaries under the Loan
Documents and under the ABL Credit Agreement;
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(iii) Indebtedness of the Borrower and its Subsidiaries (other than
LSFCC) secured by Liens permitted by Section 7.01(j) not to exceed in the
aggregate $100,000,000 at any time outstanding;
(iv) Indebtedness of the Borrower, LSIFCS and any Material Domestic
Subsidiary in respect of Ordinary Course Swap Contracts and consistent with
prudent business practice, provided that the aggregate Swap Termination
Value of all such Ordinary Course Swap Contracts with third parties under
which the Borrower, LSIFCS or any Material Domestic Subsidiary would be
required to make a payment on termination thereof do not exceed in the
aggregate $75,000,000;
(v) so long as no Default shall have occurred and be continuing,
Indebtedness of the Borrower and its Subsidiaries (other than LSFCC) to
LSIFCS in the ordinary course of business and Indebtedness of LSIFCS to the
Borrower and any of its other Subsidiaries (other than LSFCC) in the
ordinary course of business;
(vi) Indebtedness of Foreign Subsidiaries in the form of Permitted
Foreign Receivables Transactions or Permitted Foreign Inventory
Transactions;
(vii) Ordinary Course Swap Contracts between the Borrower or LSIFCS
and LSIFCS or other Subsidiaries (other than LSFCC) in the ordinary course
of business;
(viii) customary indemnification obligations and other Guarantees of
any Subsidiary incurred in connection with any Permitted Foreign
Receivables Transaction or Permitted Foreign Inventory Transactions
permitted under Section 7.03(c)(vi);
(ix) Indebtedness of the Borrower to any of its Subsidiaries or of
any of its Subsidiaries to any of its Subsidiaries in connection with the
purchases of inventory or raw materials in the ordinary course of business
in an amount not to exceed the purchase price thereof and any related
servicing fees;
(x) (A) Indebtedness of the Borrower and its Subsidiaries arising from
the honoring of a check, draft, wire transfer or similar instrument against
insufficient funds; provided that such Indebtedness is unsecured other than
by a Lien permitted pursuant to Section 7.01(r) or is supported by a letter
of credit, and (B) Indebtedness of the Borrower and its Subsidiaries in
respect of the Borrower's Cash Management Services, PROVIDED that the
aggregate Indebtedness at any one time in connection with all such Cash
Management Services does not exceed $160,000,000;
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(xi) Indebtedness of the Borrower to any of its Subsidiaries (other
than LSFCC) and Indebtedness of any of its Subsidiaries (other than LSFCC)
to the Borrower or any of its other Subsidiaries (other than LSFCC);
PROVIDED, HOWEVER, that the sum, without duplication, of (A) the aggregate
principal amount of all such Indebtedness incurred after the date hereof
PLUS (B) the aggregate Investments permitted by Section 7.02(l) PLUS (C)
the aggregate dispositions permitted by Section 7.05(i) shall not exceed
the Available Amount;
(xii) Indebtedness of the Borrower to any of its Subsidiaries (other than
LSFCC) and Indebtedness of any of its Subsidiaries (other than LSFCC)
to the Borrower or to any of its other Subsidiaries (other than LSFCC)
incurred in connection with a Disposition permitted under Section
7.05(d) and Section 7.05(k);
(xiii) Indebtedness of any Subsidiary (other than LSFCC) to any other
Subsidiary (other than LSFCC) incurred in connection with a Permitted
Foreign Receivables Transaction or a Permitted Foreign Inventory
Transaction permitted under Section 7.03(c)(vi) in an amount not to
exceed the proceeds thereof;
(xiv) Indebtedness of the Borrower and its Subsidiaries in the form of
capital leases, Real Estate Financing Transactions or Equipment
Financing Transactions to the extent permitted by Section 7.01(j) or
Section 7.01(u); and
(xv) in addition to the foregoing Sections 7.03(c)(i) - (xiv) and without
duplication, Indebtedness (other than Indebtedness under Ordinary
Course Swap Contracts or in connection with the Borrower's Cash
Management Services) of the Borrower and its Subsidiaries (other than
LSFCC) not exceeding $150,000,000 in the aggregate at any time.
Section 7.04. FUNDAMENTAL CHANGES. The Borrower shall not, nor shall it
permit any Subsidiary nor the LS&Co. Trust to, directly or indirectly merge,
dissolve, liquidate, consolidate with or into another Person, or 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 or in favor of
any Person, except that, so long as no Default exists or would result therefrom:
(a) any Domestic Subsidiary may merge into or consolidate with, or may be
liquidated, wound-up or dissolved into, the Borrower or any other Domestic
Subsidiary; PROVIDED that the Person formed by such merger or consolidation, or
into which such Domestic Subsidiary is liquidated, wound-up or dissolved, (i) in
the case of any such transaction involving the Borrower, shall be the Borrower,
(ii) in the case of any such transaction involving a Guarantor and
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not the Borrower, shall be a Guarantor, and (iii) in the case of any such
transaction involving a Pledged Domestic Subsidiary and not the Borrower, shall
be a Pledged Domestic Subsidiary;
(b) any Pledged Foreign Subsidiary may merge into or consolidate with, or
may be liquidated, wound-up or dissolved into, the Borrower, any Guarantor, any
Pledged Domestic Subsidiary or any other Pledged Foreign Subsidiary; PROVIDED
that the Person formed by such merger or consolidation, or into which such
Pledged Foreign Subsidiary is liquidated, wound-up or dissolved, (i) in the case
of any such transaction involving the Borrower, shall be the Borrower, (ii) in
the case of any such transaction involving a Guarantor and not the Borrower,
shall be a Guarantor, and (iii) in the case of any such transaction involving a
Pledged Domestic Subsidiary and not the Borrower, shall be a Pledged Domestic
Subsidiary;
(c) any Unpledged Foreign Subsidiary may merge into or consolidate with, or
may be liquidated, wound-up or dissolved into, the Borrower or any other
Subsidiary; PROVIDED, that the Person formed by such merger or consolidation, or
into which such Unpledged Foreign Subsidiary is liquidated, wound-up or
dissolved, (i) in the case of any such transaction involving the Borrower, shall
be the Borrower, (ii) in the case of any such transaction involving a Guarantor
and not the Borrower, shall be a Guarantor, (iii) in the case of any such
transaction involving a Pledged Domestic Subsidiary and not the Borrower, shall
be a Pledged Domestic Subsidiary, and (iv) in the case of any such transaction
involving a Pledged Foreign Subsidiary and not the Borrower or a Domestic
Subsidiary, shall be a Pledged Foreign Subsidiary; and
(d) the LS&Co Trust may merge into or consolidate with any other trust
adopted and maintained by the Borrower for a similar purpose pursuant to a trust
agreement in form and substance satisfactory to the Administrative Agent.
(e) the Borrower and any Subsidiary may make any Disposition permitted
pursuant to Section 7.05(k) or (i).
Section 7.05. DISPOSITIONS. The Borrower shall not, nor shall it permit any
Subsidiary nor the LS&Co. Trust to, directly or indirectly make any Disposition
or enter into any agreement to make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business, including any property
no longer used in the business;
(b) Dispositions of inventory (i) in the ordinary course of business or
(ii) by the Borrower or any of its Subsidiaries to the Borrower or any of its
Subsidiaries in arms length transactions in the ordinary course of business;
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(c) Dispositions of accounts receivable to collection agencies provided the
aggregate face amount of all such accounts receivable does not exceed
$5,000,000;
(d) Dispositions permitted by Section 7.04;
(e) Licenses of IP Rights in the ordinary course of business;
(f) Licenses of any IP Collateral other than in the ordinary course of
business or other Dispositions of all of the right, title and interest in any IP
Collateral, to the extent that such Disposition is for fair market value (in the
case of any material Disposition, as determined in good faith by the board of
directors of the Borrower), PROVIDED that, with respect to the IP Collateral
subject to any such Disposition, the sales in the applicable jurisdictions for
the prior twelve-month period of Inventory using such IP Collateral in the
production thereof do not in the aggregate (x) with respect to any single
Disposition (or series of Dispositions) account for more than 5% of the
consolidated net sales of the Borrower and its Subsidiaries for the prior
twelve-month period and (y) with respect to all such Dispositions account for
more than 10% of the consolidated net sales of the Borrower and its Subsidiaries
for the prior twelve-month period; and PROVIDED FURTHER that for any such
Disposition in excess of $1,000,000 the Borrower and its Subsidiaries make the
prepayments required by Section 2.04;
(g) Transfers and contributions of funds from time to time (i) by the
Borrower to that certain grantor trust adopted and maintained by the Borrower in
connection with the deferred compensation plan of the Borrower (the "LS&CO.
DEFERRED COMPENSATION PLAN") for the purpose of contributing funds to be held
until paid to participants in the LS&Co. Deferred Compensation Plan and their
beneficiaries (together with any successors, the "LS&CO. TRUST") pursuant to
those certain trust agreements in form and substance satisfactory to the
Administrative Agent (the "LS&CO. TRUST AGREEMENT") and (ii) by the LS&Co. Trust
to plan participants or the Borrower in accordance with the LS&Co. Trust
Agreement;
(h) Dispositions of (A) inventory (and related assets customarily included
in such transactions) pursuant to a Permitted Foreign Inventory Transaction
pursuant to Section 7.03(c)(vi) or (xiii), (B) accounts receivable (and related
assets customarily included in such transactions) pursuant to a Permitted
Foreign Receivables Transaction pursuant to Section 7.03(c)(vi) or (xiii), (C)
real property pursuant to Real Estate Financing Transactions permitted under
Section 7.03(c)(xiv); and (D) equipment pursuant to Equipment Financing
Transactions permitted under Section 7.03(c)(i), (iii) or (xiv);
(i) Dispositions by the Borrower to any of its Subsidiaries of property
other than accounts receivable and inventory and Dispositions by any of its
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Subsidiaries to the Borrower or any of its other Subsidiaries of property other
than accounts receivable and inventory; provided that the sum, without
duplication, of (i) the aggregate fair market value of such property sold,
transferred, licensed or otherwise disposed of after the date hereof plus (ii)
the aggregate principal amount of Indebtedness permitted by Section 7.03(c)(xi)
plus (iii) the aggregate Investments permitted by Section 7.02(l) shall not
exceed the Available Amount;
(j) other Dispositions by the Borrower and its Subsidiaries of property
other than accounts receivable or inventory; PROVIDED that (i) at the time of
any Disposition, no Event of Default shall exist or shall result from such
disposition; (ii) the consideration received for such Disposition shall be in an
amount at least equal to the fair market value of the assets sold, transferred,
licensed or otherwise disposed of; (iii) at least 75% of the consideration
received for such disposition shall be cash; (iv) the non-cash consideration
received for all such Dispositions in the aggregate shall not exceed $30,000,000
at any time outstanding; and (v) the aggregate fair market value of all assets
so sold, transferred, licensed or otherwise disposed of by the Borrower and its
Subsidiaries shall not exceed $50,000,000 in any Fiscal Year;
(k) Dispositions for no more than fair market value of property, including
Equity Interests, (i) of any Guarantor to the Borrower or another Guarantor;
(ii) of any Pledged Domestic Subsidiary to the Borrower, any Guarantor or
another Pledged Domestic Subsidiary; (iii) of any Pledged Foreign Subsidiary to
the Borrower, any Guarantor, any Pledged Domestic Subsidiary or another Pledged
Foreign Subsidiary; and (iv) of any Unpledged Foreign Subsidiary to the Borrower
or any of its other Subsidiaries;
(l) Dispositions constituting leases or subleases granted to others in the
ordinary course of business not interfering with the ordinary conduct of the
business of the grantor thereof;
(m) Dispositions involving the liquidation of any Foreign Subsidiary or a
foreign branch of any Domestic Subsidiary for the purpose of converting the
Borrower's business in such foreign region into licensee operations;
(n) Dispositions of accounts receivable from the Borrower to LSFCC; and
(o) a Disposition of the promissory note permitted pursuant to Section
7.02(q).
Notwithstanding the foregoing, the Borrower or any of its Subsidiaries
shall not transfer its right, title and interest in and to any IP Collateral,
except as permitted by Section 7.05(e), (f) and (k). The Borrower shall not
permit any Subsidiary that is not a Guarantor to hold any Borrower IP Rights
(whether
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existing now or created hereafter), except (x) as set forth on Schedule 1.01B,
(y) for any Borrower IP Right (other than Permitted Rights) granted to such
Subsidiary by a Loan Party which does not restrict the Loan Parties from
otherwise using, transferring or licensing such Borrower IP Right, PROVIDED that
any such Borrower IP Right shall be subject to the same proviso as is set forth
in the definition of "Permitted Right", and (z) to the extent such Subsidiary
has executed and delivered to the Administrative Agent a counterpart of the
Guaranty or otherwise guaranteed the Obligations in a manner reasonably
satisfactory to the Administrative Agent and the Administrative Agent has been
granted a perfected first-priority security interest in the respective Borrower
IP Rights that are IP Collateral.
Section 7.06. RESTRICTED PAYMENTS. The Borrower shall not, nor shall it
permit any Subsidiary to, directly or indirectly declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as such,
make any distribution of assets, Equity Interests, obligations or securities to
its stockholders, partners or members (or the equivalent Persons thereof) as
such, except that, so long as no Default shall have occurred and be continuing
at the time of any action described below or would result therefrom:
(a) the Borrower may declare and pay dividends and distributions payable
only in common stock (other than Disqualified Stock) of the Borrower; and
(b) any Subsidiary of the Borrower may (i) declare and pay cash dividends
and make other cash distributions and dividends and distributions payable in
property or in common stock (other than Disqualified Stock) of such Subsidiary
to the Borrower and (ii) declare and pay cash dividends and make other cash
distributions and dividends and distributions payable in property or in common
stock (other than Disqualified Stock) of such Subsidiary to any Subsidiary of
the Borrower of which it is a Subsidiary; provided that any dividends paid by a
Subsidiary of the Borrower which is not a wholly-owned Subsidiary are paid to
all stockholders thereof on a pro rata basis or on a basis that results in the
receipt by the Borrower or a Subsidiary that is the parent of that Subsidiary of
dividends or distributions of greater value than it would receive on a pro rata
basis.
Section 7.07. CHANGE IN NATURE OF BUSINESS. The Borrower shall not, nor
shall it permit any Subsidiary to, directly or indirectly engage in any business
not related or incidental to the manufacture and sale of clothing and
accessories. The LOS/DOS Business is a business that is related or incidental to
the manufacture and sale of clothing within the meaning of the preceding
sentence.
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Section 7.08. TRANSACTIONS WITH AFFILIATES. Subject to Section 7.05(k), the
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly enter into any transaction of any kind with any Affiliate of the
Borrower, whether or not in the ordinary course of business, other than on fair
and reasonable terms substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's length transaction with a Person other than an Affiliate.
Section 7.09. BURDENSOME AGREEMENTS. The Borrower shall not nor shall it
permit any of its Subsidiaries, directly or indirectly to enter into or suffer
to exist any agreement or arrangement limiting the ability of any of its
Subsidiaries to declare or pay dividends or other distributions in respect of
its Equity Interests or repay or prepay any Indebtedness owed to, make loans or
advances to, or otherwise transfer assets to or invest in, the Borrower or any
Subsidiary of the Borrower (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (a) the Loan Documents and the ABL Credit Agreement, (b) restrictions on
Subsidiaries formed in connection with Permitted Foreign Receivables
Transactions or Permitted Foreign Inventory Transactions permitted under Section
7.03(c)(vi) or (xiii) contained in documentation for such Transactions to the
extent such restrictions are required by the other party thereto or are
otherwise customary in standard market practice for similar transactions, (c)
restrictions on the declaration or payment or other distributions in respect of
such Equity Interests contained in documentation for any Capital Markets
Transaction permitted under Section 7.03(a)(ii) provided such restrictions do
not prohibit any actions expressly permitted hereunder, (d) restrictions on the
foregoing (other than restrictions of the type set forth in clause (c)), if any,
contained in documentation for any Capital Markets Transaction permitted under
Section 7.03(a)(ii) provided that any such restrictions shall be deemed to be
included herein as if set forth in this Agreement, (e) restrictions on the
transfer of the property subject to Permitted Foreign Inventory Transactions
permitted under Section 7.03(c)(vi) or (xiii), Equipment Financing Transactions
permitted under Section 7.03(c)(i), (iii) or (xiv) and Real Estate Financing
Transactions permitted under Section 7.03(c)(xiv) and Dispositions of accounts
receivable subject to Permitted Foreign Receivables Transactions permitted under
Section 7.03(c)(vi) or (xiii), (f) restrictions placed on the transfer by a
Subsidiary of IP Rights granted by the Borrower in connection with the terms of
licenses between the Borrower and any Subsidiaries relating to such IP Rights,
and (g) restrictions required to be placed on the transfer of property pursuant
to a Lien permitted under Section 7.01.
Section 7.10. USE OF PROCEEDS. The Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly (a) use the proceeds of any Borrowing,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying
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margin stock or to refund indebtedness originally incurred for such purpose; (b)
acquire any security in any transaction that is subject to Sections 13 or 14 of
the Exchange Act; (c) knowingly purchase Ineligible Securities from the Lead
Arranger during any period in which the Lead Arranger makes a market in such
Ineligible Securities, (d) knowingly purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Lead Arranger, or (e) make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Lead Arranger and issued by
or for the benefit of the Borrower or any Affiliate of the Borrower. The Lead
Arranger is a registered broker-dealer and permitted to underwrite and deal in
certain Ineligible Securities.
Section 7.11. LEASE OBLIGATIONS. The Borrower shall not, nor shall it
permit any Subsidiary to, create, incur, assume or suffer to exist, any
obligations as lessee (a) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction other than capital leases,
Real Estate Financing Transactions and Equipment Financing Transactions
permitted under Section 7.03(c), or (b) for the rental or hire of other real or
personal property of any kind under leases or agreements to lease (excluding
capital leases) other than (i) leases in existence on the Closing Date and (ii)
leases entered into or assumed by the Borrower or any Subsidiary after the date
hereof in the ordinary course of business.
Section 7.12. AMENDMENTS OF CERTAIN DOCUMENTS. The Borrower shall not, nor
shall it permit any Subsidiary or the LS&Co. Trust to, amend, any of its
Organization Documents, the Investment Policies or the Leadership Shares Plan if
the effect of such amendment would be materially adverse to the Borrower or to
the Lenders.
Section 7.13. ACCOUNTING CHANGES. The Borrower shall not, nor shall it
permit any Subsidiary to, make or permit, any change in its Fiscal Year.
Section 7.14. PREPAYMENTS, ETC., OF INDEBTEDNESS. The Borrower shall not,
nor shall it permit any Subsidiary to, prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness, except (a) the prepayment of the Borrowings in accordance with the
terms of this Agreement, the prepayment of the borrowings under the ABL Credit
Agreement in accordance with the terms thereof and the prepayment of
Indebtedness payable to the Borrower, (b) prepayment by Foreign Subsidiaries of
the Indebtedness of Foreign Subsidiaries other than Indebtedness permitted under
Section 7.03(c)(i) and listed on Part A of Schedule 7.03, (c) the prepayment,
redemption, repurchase or other satisfaction of the 2006 Notes and the 2008
Notes prior to the scheduled maturity thereof in accordance with Section 2.06,
(b) the prepayment, redemption, repurchase or other satisfaction of any secured
Indebtedness (other than any secured Specified Refinancing Indebtedness that
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does not require any principal payments prior to September 29, 2009), (e) the
close out of Ordinary Course Swap Contracts and (f) Indebtedness of the Borrower
to any of its Subsidiaries and Indebtedness of any of its Subsidiaries to the
Borrower or any of its other Subsidiaries to the extent such Indebtedness to be
prepaid is permitted pursuant to Section 7.03 in each case, in accordance with
any subordination terms thereof.
Section 7.15. NEGATIVE PLEDGE. The Borrower shall not, nor shall it permit
any Subsidiary to, enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets except:
(a) negative pledges existing on property of the Borrower and its
Subsidiaries on the Closing Date and listed on Schedule 7.01;
(b) negative pledges in favor of the Secured Parties, or in favor of the
agents and lenders under the ABL Credit Agreement;
(c) negative pledges in connection with any purchase money Indebtedness
permitted under Section 7.03(c)(iii) solely to the extent that the agreement or
instrument governing such Indebtedness prohibits a Lien on the property acquired
with the proceeds of such Indebtedness;
(d) negative pledges in connection with any capital lease permitted under
Section 7.03(c)(i), (iii) or (xiv) solely to the extent that such capital lease
prohibits a Lien on the property subject thereto;
(e) negative pledges on accounts receivable of Foreign Subsidiaries and the
associated assets of Foreign Subsidiaries required in connection with Permitted
Foreign Receivable Transactions permitted under Section 7.03(c)(vi) or (xiii),
negative pledges on the property subject to Permitted Foreign Inventory
Transactions permitted under Section 7.03(c)(vi) or (xiii), negative pledges on
the property subject to Equipment Financing Transactions permitted under Section
7.03(c)(i), (iii) or (xiv) and Real Estate Financing Transactions permitted
under Section 7.03(c)(xiv), and negative pledges on the property subject to
Liens permitted under Section 7.01;
(f) negative pledges on IP Rights licensed from third parties; and
(g) negative pledges with respect to property of the Borrower and its
Subsidiaries contained in documentation for any Capital Markets Transaction
provided such negative pledges (i) expressly permit Liens in favor of the ABL
Agent and the Administrative Agent on all assets of the Borrower and its
Subsidiaries and Liens on equipment subject to Equipment Financing Transactions,
real property subject to Real Estate Financing Transactions,
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accounts receivable subject to Permitted Foreign Receivables Transactions,
inventory subject to Permitted Foreign Inventory Transactions and property
subject to any other Lien permitted under Section 7.01 and (ii) do not require
the Indebtedness issued in such Capital Markets Transactions to be secured by
such permitted Liens.
Section 7.16. RESTRICTED SUBSIDIARIES. The Borrower shall not permit any of
its Subsidiaries (other than Unpledged Foreign Subsidiaries) to become a
Restricted Subsidiary, other than as a result of a change in Consolidated Net
Tangible Assets (as defined in the 1996 Instruments).
Section 7.17. AMENDMENTS OF DOCUMENTS RELATING TO INDEBTEDNESS. The
Borrower shall not, nor shall it permit any Subsidiary to, (a) amend or
otherwise change the terms of any Indebtedness permitted under Section
7.03(c)(i) and listed on Part A of Schedule 7.03 or any Specified Refinancing
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Indebtedness, change (to any date earlier than January 31, 2010)
any date upon which payments of principal or interest are due thereon, change
any event of default or condition to an event of default with respect thereto
(other than to eliminate or make less onerous any such event of default or
increase any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights on
the holders of such Indebtedness (or a trustee or other representative on their
behalf) which would be materially adverse to the Borrower or to the Lenders or
(b) amend or otherwise change the terms of any other Indebtedness, if the effect
of such amendment or change, together with all other amendments or changes made,
is to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Indebtedness (or a trustee or other
representative on their behalf) which would be materially adverse to the
Borrower or the Lenders or, in the case of any Indebtedness permitted pursuant
to Section 7.03(a)(ii) only, change (to earlier dates) any dates upon which
payments of principal are due thereon or change the redemption, prepayment or
defeasance provisions thereof; PROVIDED THAT none of the foregoing shall apply
to any Indebtedness of the Borrower to any of its Subsidiaries or to
Indebtedness of any of its Subsidiaries to the Borrower or any of its other
Subsidiaries other than amendments to the terms of any subordination provisions
relating to any Pledged Indebtedness.
Section 7.18. FINANCIAL COVENANT. The Borrower shall not, directly or
indirectly, permit the Consolidated Fixed Charge Coverage Ratio as of the end of
any Fiscal Quarter of the Borrower to be less than 1.00 to 1.00.
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ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan, or (ii)
within three days after the same becomes due, any interest on any Loan, or any
fee due hereunder, or (iii) within three Business Days after the same becomes
due, any other amount payable hereunder or under any other Loan Document; or
(b) SPECIFIC COVENANTS. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of (i) Sections 6.03, 6.05, 6.07, 6.11 or
Article 7, or Sections 6.01, 6.02, and such failure under this Section
8.01(b)(ii) continues for five Business Days after the earlier of (A) a
Responsible Officer of such Loan Party becoming aware of such default or (B)
receipt by such Loan Party of notice from the Administrative Agent or any Lender
of such default; or
(c) OTHER DEFAULTS. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b)) contained in any
Loan Document on its part to be performed or observed and such failure continues
for 30 days after the earlier of (i) a Responsible Officer of such Loan Party
becoming aware of such default or (ii) receipt by such Loan Party of notice from
the Administrative Agent or any Lender of such default; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or
(e) CROSS-DEFAULT. The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise, in each case after any applicable grace
period) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder) having an aggregate principal amount (including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$25,000,000, or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to
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become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded, in each
case after any applicable grace period; or
(f) INSOLVENCY PROCEEDINGS, ETC. Any Loan Party or any of its Material
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) The Borrower or any Material
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 60 days after its issue or levy; or
(h) JUDGMENTS. There is entered against the Borrower or any Material
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding $20,000,000 (to the extent not covered by a valid and
binding policy of insurance between the defendant and the insurer, which shall
be rated at least "A" by A.M. Best Company at the time of such insurance
policy's inception, covering full payment thereof as to which the insurer does
not dispute coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 30 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) any Plan maintained by the Borrower or any of its ERISA
Affiliates shall be terminated within the meaning of Title IV of ERISA or a
trustee shall be appointed by an appropriate United States district court to
administer any Plan, or the PBGC (or any successor thereto) shall institute
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan, and, in each case, the Borrower's or any such ERISA Affiliate's liability
(after
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giving effect to the tax consequences thereof) as of the date thereof to the
PBGC (or any successor thereto) for unfunded guaranteed vested benefits under
such Plan or the Borrower's obligations to contribute to any Plan in order to
voluntarily terminate such Plan exceed $20,000,000 (or in the case of a
termination involving the Borrower or any of its ERISA Affiliates as a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA) the
withdrawing employer's proportionate share of such liability shall exceed such
amount), or (ii) the Borrower or any of its ERISA Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from such
Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred a withdrawal
liability in an amount exceeding $20,000,000; or
(j) INVALIDITY OF LOAN DOCUMENTS; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS. At any time after the execution and delivery thereof (ii) any Loan
Document for any reason other than as expressly permitted hereunder or
satisfaction in full of all the Obligations, ceases to be in full force and
effect or is declared null and void; (ii) the Administrative Agent shall not
have or shall cease to have a valid and perfected Lien in any Collateral
purported to be covered by any Collateral Document (with the priority required
by the applicable Collateral Document), for any reason other than the failure of
the Administrative Agent or any Lender to take any action within its control; or
(iii) any Loan Party or any other Person contests in any manner the validity or
enforceability of any Loan Document or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document.
Section 8.02. REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
occurs and is continuing, the Administrative Agent shall, at the request of, or
may, with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder, under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(b) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Secured Parties under the Loan Documents or applicable
law;
PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
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terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, in
each case without further act of the Administrative Agent or any Lender.
Section 8.03. APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
FIRST, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article 3) payable to the Administrative Agent in its capacity as
such;
SECOND, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article 3),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
THIRD, to payment of that portion of the Obligations constituting
accrued and unpaid interest, ratably among the Lenders in proportion to the
respective amounts described in this clause Third payable to them;
FOURTH, to payment of that portion of the Obligations constituting
unpaid principal, ratably among the Lenders in proportion to the respective
amounts described in this clause Fourth held by them; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
ARTICLE 9
ADMINISTRATIVE AGENT
Section 9.01. APPOINTMENT AND AUTHORIZATION OF THE ADMINISTRATIVE AGENT AND
SUPPLEMENTAL COLLATERAL AGENTS.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
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contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) It is the purpose of this Agreement and the other Loan Documents that
there shall be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact
business as agent or trustee in such jurisdiction. It is recognized that in case
of litigation under this Agreement or any of the other Loan Documents, and in
particular in case of the enforcement of any of the Loan Documents, or in case
the Administrative Agent deems that by reason of any present or future law of
any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be necessary
that the Administrative Agent appoint an additional individual or institution as
a separate trustee, co-trustee, collateral agent or collateral co-agent (any
such additional individual or institution being referred to herein individually
as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL
COLLATERAL AGENTS").
In the event that the Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either the Administrative Agent or such Supplemental Collateral Agent, and (ii)
the provisions of this Article IX and of Sections 10.04 and 10.05 that refer to
the Administrative Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to the Administrative Agent shall be
deemed to
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be references to the Administrative Agent and/or such Supplemental Collateral
Agent, as the context may require.
Should any instrument in writing from the Borrower or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by the
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, the Borrower shall, or
shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by the Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by the Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
Section 9.02. DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
Section 9.03. LIABILITY OF THE ADMINISTRATIVE AGENT. No Agent-Related
Person shall (a) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein), or
(b) be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
Section 9.04. RELIANCE BY THE ADMINISTRATIVE AGENT.
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(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
Section 9.05. NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
Section 9.06. CREDIT DECISION; DISCLOSURE OF INFORMATION BY THE
ADMINISTRATIVE AGENT. Each Lender acknowledges that no Agent-Related Person
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has made any representation or warranty to it, and that no act by the
Administrative Agent hereafter taken, including any consent to and acceptance of
any assignment or review of the affairs of any Loan Party or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to the Administrative Agent that it has, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any
Agent-Related Person.
Section 9.07. INDEMNIFICATION OF THE ADMINISTRATIVE AGENT. Whether or not
the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of any Loan Party and without limiting the obligation of any Loan
Party to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; PROVIDED, HOWEVER,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
PROVIDED, HOWEVER, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
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delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive
termination of the Aggregate Commitments, the payment of all other Obligations
and the resignation of the Administrative Agent.
Section 9.08. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as though
Bank of America were not the Administrative Agent hereunder and without notice
to or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise such rights and powers as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
Section 9.09. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders,
which successor administrative agent shall be consented to by the Borrower at
all times other than during the existence of an Event of Default (which consent
of the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "ADMINISTRATIVE AGENT" shall mean
such successor administrative agent, and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of any other Lender. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article IX and Sections 10.04 and 10.05 shall
inure to its benefit as to any actions taken or
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omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
Section 9.10. THE ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 2.09 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.11 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
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Section 9.11. COLLATERAL AND GUARANTY MATTERS. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion, to
enter into each Collateral Document as secured party on behalf of and for the
benefit of the Lenders and to be the agent for and representative of the Lenders
under the Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Guaranty; PROVIDED that the Administrative Agent
shall not (A) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
the Guaranty or (B) release any Collateral (except as otherwise expressly
permitted or required pursuant to the terms of this Agreement or the applicable
Collateral Document), in each case without the prior consent of Required Lenders
(or, if required pursuant to Section 10.01, all Lenders); PROVIDED FURTHER,
however, that, without further written consent or authorization from the
Lenders, the Administrative Agent may execute any documents or instruments
necessary to (a) release any Lien encumbering any item of Collateral (i) that is
the subject of a sale or other disposition of assets permitted by this
Agreement, (ii) the release of which is expressly provided for in the Collateral
Documents, (iii) to which the Required Lenders (or, if required pursuant to
Section 10.01, all Lenders) have otherwise consented, (iv) property that is the
subject of a Real Estate Financing Transaction or an Equipment Financing
Transaction, if the Borrower certifies to the Administrative Agent that the Real
Estate Financing Transaction or Equipment Financing Transaction is made in
compliance with Section 7.03 (and the Administrative Agent may rely conclusively
on any such certificate, without further inquiry) or (v) to the extent that such
Collateral is not IP Collateral and the aggregate fair market value of such
Collateral so released does not exceed $5,000,000 in any Fiscal Year, (b)
release any Guarantor from the Guaranty (and any Collateral Document to which it
is a party) if all of the capital stock of such Guarantor is sold to any Person
(other than an Affiliate of the Borrower) pursuant to a sale or other
disposition permitted hereunder or to which the Required Lenders (or, if
required pursuant to Section 10.01, all Lenders) have otherwise consented or (c)
subordinate Liens of the Administrative Agent, on behalf of the Secured Parties,
to any Liens permitted under Section 7.01(b) with respect to the Second-Lien
Collateral; PROVIDED THAT in each case the requirements of the applicable
Collateral Documents are satisfied. Anything contained in any of the Loan
Documents to the contrary notwithstanding, the Borrower, the Administrative
Agent and each Lender hereby agree that (x) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Guaranty, it being understood and agreed that all powers,
rights and remedies under the Collateral Documents and the Guaranty may be
exercised solely by the Administrative Agent for the benefit of the Lenders in
accordance with the terms thereof, and (y) in the event of a foreclosure by the
Administrative Agent on any of the Collateral pursuant to a public or private
sale, the Administrative Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and the Administrative Agent, as agent
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for and representative of the Lenders (but not any Lender or the Lenders in its
or their respective individual capacities unless Required Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Administrative Agent at such sale.
Upon request by the Administrative Agent at any time, the Required
Lenders (or, if required pursuant to Section 10.01, all Lenders) will confirm in
writing the Administrative Agent's authority to release or subordinate its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.11.
Without derogating from any other authority granted to the
Administrative Agent herein or in any other Loan Document, each Lender hereby
specifically (i) authorizes the Administrative Agent to enter into the Foreign
Pledge Agreements, including, without limitation, to the extent required by
Section 6.13(b), such Foreign Pledge Agreements governed by the laws of
Australia, Belgium, Bermuda, Brazil, Canada, Chile, China, Columbia, Costa Rica,
the Czech Republic, the Dominican Republic, Finland, France, Germany, Greece,
Hong Kong, Hungary, India, Indonesia, Italy, Japan, Korea, Malaysia, Mauritius,
Mexico, The Netherlands, New Zealand, Norway, Philippines, Poland, Portugal,
Singapore, South Africa, Spain, Switzerland, Turkey, and the United Kingdom,
respectively, as agent on behalf of the Lenders, with the effect that the
Lenders each become a Secured Party thereunder, (ii) appoints the Administrative
Agent as its attorney-in-fact granting it the powers to execute each such
Foreign Pledge Agreement or any other document, instrument or agreement related
to perfection, enforceability or notice of the security interests of Lenders in
any of the Collateral in its name and on its behalf, (iii) authorizes and
empowers the Administrative Agent to sub-delegate to third parties any or all of
its powers as attorney-in-fact of each of the Lenders and (iv) authorizes and
empowers the Administrative Agent to use its reasonable business judgment to
establish the value of any Collateral for purposes of or in connection with
perfection, enforceability or notice of the security interests of Lenders in any
of the Collateral to the extent the Administrative Agent believes may be
necessary or desirable with respect to any foreign jurisdiction.
The Administrative Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the Borrower or
is cared for, protected or insured or has been encumbered, or that the
Administrative Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available
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to the Administrative Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Administrative Agent may act in any manner it may
deem appropriate, in its sole discretion given the Administrative Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Administrative Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise and to the extent
expressly provided in any other Loan Document.
Section 9.12. OTHER AGENTS; ARRANGERS AND MANAGERS. None of the Persons
identified on the facing page or signature pages of this Agreement as a "sole
book manager," or "sole lead manager," shall have any right, power, obligation,
liability, responsibility or duty under this Agreement. Without limiting the
foregoing, none of the Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Persons so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE 10
MISCELLANEOUS
Section 10.01. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement, any other Loan Document or the Trademark License Agreement, and
(in the case of any Loan Document) no consent to any departure by the Borrower
or any other Loan Party therefrom, shall be effective unless in writing signed
by the Required Lenders and the Borrower or the applicable Loan Party, as the
case may be, and acknowledged by the Administrative Agent, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no such amendment, waiver or
consent shall:
(a) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the prior written
consent of such Lender;
(b) postpone (or amend Section 2.06(b) in any manner that has the effect of
postponing) any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the prior written consent of each Lender directly affected
thereby;
(c) reduce the principal of, or the rate of interest specified herein on,
any Loan or (subject to clause (ii) of the proviso following clause (h) of this
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Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the prior written consent of each Lender directly affected
thereby; provided, HOWEVER, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of "DEFAULT RATE" or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
to reduce any fee payable hereunder;
(d) change Section 2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the prior written consent
of each Lender;
(e) change any provision of this Section 10.01 or the definition of
"REQUIRED LENDERS" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
prior written consent of each Lender;
(f) release all or substantially all of the value of the guarantees of the
Guarantors under the Guaranty (other than to the extent permitted hereunder or
under the Guaranty) without the prior written consent of each Lender;
(g) release any Lien granted in favor of the Administrative Agent with
respect to all or substantially all of the Collateral (other than to the extent
permitted hereunder or under any applicable Collateral Document) without the
prior written consent of each Lender;
(h) change the definition of Consolidated Excess Cash Flow or the leverage
ratio test or the interest coverage ratio test described in Section 2.06(b) (or
any definitions related to any of the foregoing) that would have the effect of
increasing the maximum leverage ratio set forth therein or decreasing the
minimum interest coverage ratio set forth therein or increasing the amount of
cash that may be used in the refinancings required therein without the prior
written consent of each Lender; or
(i) change Section 10.07 in a manner that would impose additional
restrictions on the ability of any Lender to assign or otherwise transfer any of
its rights or obligations under this Agreement;
AND, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties
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thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
Section 10.02. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) GENERAL. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to Section
10.19) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower or the Administrative Agent, to the address,
facsimile number, electronic mail address or telephone number specified for
such Person on Schedule 10.02 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such
party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower and the Administrative Agent.
(b) All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant party
hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on
behalf of the relevant party hereto; (B) if delivered by mail, four Business
Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail, (subject to the provisions of Section 10.19) when received;
provided, however, that notices and other communications to the Administrative
Agent pursuant to Article II shall not be effective until actually received by
such Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(c) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
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manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(d) RELIANCE BY THE ADMINISTRATIVE AGENT AND LENDERS. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
Section 10.03. NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
Section 10.04. ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all reasonable costs and
expenses incurred in connection with the development, preparation, negotiation
and execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all reasonable Attorney Costs, (b) to
pay or reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with (i) creating or perfecting Liens in favor of the
Administrative Agent on behalf of the Secured Parties and (ii) the custody or
preservation of any of the Collateral, and (c) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranty, and including all such
costs and expenses incurred during any "workout" or restructuring in respect of
the Obligations and during any legal proceeding, including any proceeding under
any
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Debtor Relief Law), including all Attorney Costs. The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. All amounts due under this Section 10.04 shall be payable within ten
Business Days after demand therefor. The agreements in this Section shall
survive the termination of the Aggregate Commitments and repayment of all other
Obligations.
Section 10.05. INDEMNIFICATION BY THE BORROWER. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, trustees, advisors, counsel, agents
and attorneys-in-fact (collectively the "INDEMNITEES") from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Indemnitee in any way relating to or
arising out of or in connection with (a) the execution, delivery, enforcement,
performance or administration of any Loan Document or any other agreement,
letter or instrument delivered in connection with the transactions contemplated
thereby or the consummation of the transactions contemplated thereby, (b) any
Commitment or Loan or the use or proposed use of the proceeds therefrom, or (c)
any actual or alleged presence or release of Hazardous Materials on or from any
property currently or formerly owned or operated by the Borrower, any Subsidiary
or any other Loan Party, or any Environmental Liability related in any way to
the Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; PROVIDED that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements 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. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any special, indirect, consequential or
punitive damages relating to this
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Agreement or any other Loan Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date). All
amounts due under this Section 10.05 shall be payable within thirty days after
demand therefor. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.
Section 10.06. PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
Section 10.07. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.07(b), (ii) by way of participation in accordance with
the provisions of Section 10.07(d), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.07(f) or (h) (and
any other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
Section 10.07(d) and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement
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(including all or a portion of its Tranche A Loans or Tranche B Loans at the
time owing to it); PROVIDED that (i)except in the case of an assignment of the
entire remaining amount of the assigning Lender's Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in Section 10.07(g)) with respect to a Lender, the
aggregate principal amount of the Loans subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "TRADE DATE" is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $1,000,000, unless the Administrative Agent consents (such consent not
to be unreasonably withheld or delayed); each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender's rights
and obligations under this Agreement with respect to the Loans assigned, except
that this clause (ii) shall not prohibit any Lender from assigning all or a
portion of its rights and obligations in respect of Tranche A Loan and Tranche B
Loans on a non-pro rata basis; and (iii) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500, and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire. Subject to acceptance and recording thereof by
the Administrative Agent pursuant to Section 10.07(c), from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, 10.04 and 10.05 with respect to facts and circumstances occurring
prior to the effective date of such assignment). Upon request, the Borrower (at
its expense) shall execute and deliver a Tranche A Note and/or a Tranche B Note
to the assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.07(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
10.07(d).
(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
"REGISTER"). The entries in the Register shall be conclusive, and the Borrower,
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the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, upon
reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower's Affiliates or
Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
the Loans owing to it); PROVIDED that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the 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. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant. Subject to Section 10.07(e), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.07(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender, PROVIDED such Participant agrees to be
subject to Section 2.13 as though it were a Lender.
(e) No assignee, Participant or other transferee of any Lender's rights
(and no Lender on behalf of any assignee, Participant or other transferee) shall
be entitled to receive any greater payment under Sections 3.01, 3.04 or 3.05
than such Lender would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.01 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 10.15 as though it were a
Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Notes, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; PROVIDED that no such pledge or
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assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by the Administrative Agent (such approval not to be unreasonably
withheld or delayed); PROVIDED that notwithstanding the foregoing, "ELIGIBLE
ASSIGNEE" shall not include (A) the Borrower or any of the Borrower's Affiliates
or Subsidiaries, (B) any Person engaged, directly or indirectly, in the business
of manufacturing, distributing or selling of clothing fabric, clothing or
clothing accessories, or any Person who, individually or collectively with other
Persons, constitutes an Affiliate of any such Person (a "BUSINESS COMPETITOR")
and (C) any benefit plan for employees of a Business Competitor.
"FUND" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"APPROVED FUND" means any Fund 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.
(h) Notwithstanding anything to the contrary contained herein, any Lender
that is a Fund may create a security interest in all or any portion of the Loans
owing to it and the Notes, if any, held by it to the trustee for holders of
obligations owed, or securities issued, by such Fund as security for such
obligations or securities, PROVIDED that unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this Section 10.07,
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Loan Documents and (ii) such trustee shall not be entitled to exercise
any of the rights of a Lender under the Loan Documents even though such trustee
may have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.
Section 10.08. CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates' directors, officers, managers, members, partners,
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
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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 Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Loan Parties; (g) with the consent of
the Borrower; (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 or any Lender on a nonconfidential basis from a source
other than the Borrower; or (i) to the National Association of Insurance
Commissioners or any other similar organization. In addition, the Administrative
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Administrative
Agent and the Lenders in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitments, and the Borrowings.
For the purposes of this Section, "INFORMATION" means all information received
from any Loan Party relating to any Loan Party or its business, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by any Loan Party; PROVIDED that, in
the case of information received from a Loan Party after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Notwithstanding anything herein to the contrary, "Information" shall
not include, and the Administrative Agent and each Lender may disclose without
limitation of any kind, any information with respect to the "tax treatment" and
"tax structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the
Administrative Agent or such Lender relating to such tax treatment and tax
structure; PROVIDED that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans and transactions contemplated hereby.
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Section 10.09. SET-OFF. In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of any
Event of Default, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower or any other Loan Party, any such notice
being waived by the Borrower (on its own behalf and on behalf of each Loan
Party) to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the respective Loan Parties against any and all
Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not the Administrative Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
indebtedness. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application.
Section 10.10. INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "MAXIMUM RATE"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
Section 10.11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
Section 10.12. INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
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provisions of this Agreement shall control; PROVIDED that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
Section 10.13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.
Section 10.14. SEVERABILITY. If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 10.15. TAX FORMS.
(a) Each Lender that is not a "United States person" within the meaning of
Section 7701(a)(30) of the Code (a "FOREIGN LENDER") shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to the Administrative
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Agent such additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is satisfactory
to the Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or
payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for
its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination
of the Administrative Agent (in the reasonable exercise of its discretion),
(A) two duly signed completed copies of the forms or statements required to
be provided by such Lender as set forth above, to establish the portion of
any such sums paid or payable with respect to which such Lender acts for
its own account that is not subject to U.S. withholding tax, and (B) two
duly signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required under
the Code, to establish that such Lender is not acting for its own account
with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS
Form W-8IMY pursuant to this Section 10.15(a) or (B) if such Lender shall
have failed to satisfy the foregoing provisions of this Section 10.15(a);
PROVIDED that if such Lender shall have satisfied the requirement of this
Section 10.15(a) on the date such Lender became a Lender or ceased to act
for its own account with respect to any payment under any of the Loan
Documents, nothing in this Section 10.15(a) shall relieve the Borrower of
its obligation to pay any amounts pursuant to Section 3.01 in
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the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender or other Person
for the account of which such Lender receives any sums payable under any of
the Loan Documents is not subject to withholding or is subject to
withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of
the Loan Documents with respect to which the Borrower is not required to
pay additional amounts under this Section 10.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
Section 10.16. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE
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BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
Section 10.17. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
Section 10.18. JUDGMENT CURRENCY.
(a) If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in any currency (the "ORIGINAL
CURRENCY") into another currency (the "OTHER CURRENCY"), the parties hereto
agree, to the fullest extent permitted by law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent or a Lender could purchase the Original Currency with such
Other Currency in New York, New York on the Business Day immediately
116
preceding the day on which any such judgment, or any relevant part thereof, is
given.
(b) The obligations of the Borrower in respect of any sum due from it to
any agent or Lender hereunder shall, notwithstanding any judgment in such Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such agent or Lender of any sum adjudged to be so due in such Other
Currency such agent or Lender may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency; if the Original
Currency so purchased is less than the sum originally due such agent or Lender
in the Original Currency, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such agent or Lender against
such loss, and if the Original Currency so purchased exceeds the sum originally
due to such agent or Lender in the Original Currency, such agent or Lender shall
remit such excess to the Borrower.
Section 10.19. INTERNET COMMUNICATIONS. IN NO EVENT SHALL BANK OF AMERICA
OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, "BANK OF AMERICA
PARTIES") HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER OR ANY OTHER PERSON
OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
(WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY'S OR THE
AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE
EXTENT THE LIABILITY OF ANY BANK OF AMERICA PARTY IS FOUND IN A FINAL
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH BANK OF AMERICA PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
[SIGNATURE PAGES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LEVI XXXXXXX & CO.
By:______________________
Name:
Title:
000
XXXX XX XXXXXXX, N.A., as
the Administrative Agent
By:_______________________
Name:
Title:
119
LENDERS:
BANK OF AMERICA, N.A., as
Lender
By:___________________
Name:
Title:
000
XXXX XX XXXXXXX XXXXXX LLC,
as Lender
By:____________________
Name:
Title:
121
SCHEDULE 1.01A
DEFINITION OF "CHANGE OF CONTROL"(1)
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(a) prior to the first Public Equity Offering that results in a Public
Market, the Permitted Holders cease to be the Beneficial Owners, directly or
indirectly, of a majority of the total voting power of the Voting Stock of the
Borrower, whether as a result of the issuance of securities of the Borrower, any
merger, consolidation, liquidation or dissolution of the Borrower, any direct or
indirect transfer of securities by the Permitted Holders or otherwise; or
(b) on or after the first Public Equity Offering that results in a
Public Market, if any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 or any successor
provisions to either of the foregoing), including any group acting for the
purpose of acquiring, holding, voting or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, other
than any one or more of the Permitted Holders, becomes the Beneficial Owner,
directly or indirectly, of 35% or more of the total voting power of the Voting
Stock of the Borrower; PROVIDED, HOWEVER, that the Permitted Holders are the
Beneficial Owners, directly or indirectly, in the aggregate of a lesser
percentage of the total voting power of the Voting Stock of the Borrower than
that other person or group; and PROVIDED FURTHER, that the provisions of this
clause (b) will not apply to Voting Trustees serving in that capacity under the
Voting Trust Agreement; or
(c) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
the Borrower and the Restricted Subsidiaries, considered as a whole (other than
a disposition of assets as an entirety or virtually as an entirety to a
wholly-owned Restricted Subsidiary or one or more Permitted Holders) shall have
occurred, or the Borrower merges, consolidates or amalgamates with or into any
other Person (other than one or more Permitted Holders) or any other Person
(other than one or more Permitted Holders) merges, consolidates or amalgamates
with or into the Borrower, in any event pursuant to a transaction in which the
outstanding Voting Stock of the Borrower is reclassified into or exchanged for
cash, securities or other Property, other than transaction where:
_________________________________
(1) As defined in that certain 2001 U.S. Dollar Indenture dated as of
January 18, 2001 between the Borrower and Wilmington Trust Company (as successor
to Citibank, N.A.), as trustee. Unless otherwise specifically defined herein,
each term used in this Schedule A that is defined in the Credit Agreement has
the meaning assigned to such term in the Credit Agreement.
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(1) the outstanding Voting Stock of the Borrower is
reclassified into or exchanged for other Voting Stock of the Borrower
or for Voting Stock of the surviving corporation or transferee, and
(2) the Holders of the Voting Stock of the Borrower
immediately prior to the transaction own, directly or indirectly, not
less than a majority of the Voting Stock of the Borrower or the
surviving corporation or transferee immediately after the transaction
and in substantially the same proportion as before the transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of that period constituted the Board of Directors of the Borrower
(together with any new directors whose election or appointment by such Board or
whose nomination for election by the stockholders of the Borrower was approved
by a vote of not less than three-fourths of the directors then still in office
who were either directors at the beginning of that period or whose election or
nomination for election was previously so approved or by a vote of the Voting
Trustees pursuant to the terms of the Voting Trust Agreement) cease for any
reason to constitute a majority of the Board of Directors of the Borrower then
in office; or
(e) the stockholders of the Company shall have approved any plan of
liquidation or dissolution of the Borrower.
OTHER DEFINED TERMS
"BENEFICIAL OWNER" means a beneficial owner as defined in Rule 13d-3
under the Securities Exchange Act of 1934, except that:
(a) a Person will be deemed to be the Beneficial Owner of all shares
that the Person has the right to acquire, whether that right is exercisable
immediately or only after the passage of time,
(b) for purposes of clause (a) of the definition of "Change of
Control", Permitted Holders will be deemed to be the Beneficial Owners of any
Voting Stock of a corporation or other legal entity held by any other
corporation or other legal entity so long as the Permitted Holders Beneficially
Own, directly or indirectly, in the aggregate a majority of the total voting
power of the Voting Stock of that corporation or other legal entity, and
(c) for purposes of clause (b) of the definition of "Change of
Control", any "person" or "group" (as those terms are defined in Sections 13(d)
and 14(d) of the Securities Act of 1934 or any successor provisions to either of
the foregoing), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the
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Securities Exchange Act of 1934, other than any one or more of the Permitted
Holders, shall be deemed to be the Beneficial Owners of any Voting Stock of a
corporation or other legal entity held by any other corporation or legal entity
("the parent corporation"), so long as that person or group Beneficially Owns,
directly or indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of that parent corporation.
The term "BENEFICIALLY OWN" shall have a corresponding meaning.
"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in that Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into that equity interest.
"ISSUE DATE" means the first date on which the 2008 Notes are initially
issued.
"PERMITTED HOLDERS" means the holders of Voting Stock as of the Issue
Date, together with any Voting Trustee and any Person who is a "PERMITTED
TRANSFEREE" of the holders, as that term is defined in the Stockholders
Agreement dated as of April 15, 1996 between this Agreement and the stockholders
of the Borrower party thereto as that Stockholders Agreement was in effect on
the Issue Date, except that transferees pursuant to Section 2.2(a)(x) of that
Stockholders Agreement shall not be deemed to be Permitted Transferees for
purposes of this Agreement.
"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of that Person, over shares of any
other class of Capital Stock issued by that Person.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of
common stock of the Borrower pursuant to an effective registration statement
under the Securities Act of 1933.
"PUBLIC MARKET" means any time after:
(a) a Public Equity Offering has been consummated, and
(b) at least 15% of the total issued and outstanding common stock of
the Borrower has been distributed by means of an effective registration
statement under the Securities Act of 1933.
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"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"UNRESTRICTED SUBSIDIARY" means:
(a) any Subsidiary of the Borrower that is designated after the Issue
Date as an Unrestricted Subsidiary as permitted or required pursuant to Section
4.10 and is not thereafter redesignated as a Restricted Subsidiary as permitted
pursuant thereto; and
(b) any Subsidiary of an Unrestricted Subsidiary.
"VOTING STOCK" of any Person means all classes of Capital Stock or
other interests (including partnership interests, and in the case of the
Borrower, the certificates issued pursuant to the Voting Trust Agreement) of
that Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
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