SECOND AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT
dated as of June 15, 1999,
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
the Additional Obligors referred to herein,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
THE CHASE MANHATTAN BANK
and
CITIBANK, N.A.,
as Syndication Agents,
and
NATIONSBANK, N.A.,
as Documentation Agent
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................... 1
SECTION 1.1 Definitions................................................ 1
SECTION 1.2 General.................................................... 16
SECTION 1.3 Other Definitions and Provisions........................... 16
ARTICLE II REVOLVING CREDIT FACILITY...................................... 16
SECTION 2.1 Revolving Credit Loans..................................... 16
SECTION 2.2 Procedure for Advances of Revolving Credit Loans........... 17
SECTION 2.3 Repayment of Revolving Credit Loans........................ 18
SECTION 2.4 Evidence of Debt........................................... 19
SECTION 2.5 Permanent Reduction of the Revolving Credit Commitment..... 19
SECTION 2.6 Termination of Revolving Credit Facility................... 20
ARTICLE III LETTER OF CREDIT FACILITY..................................... 21
SECTION 3.1 L/C Commitment............................................. 21
SECTION 3.2 Procedure for Issuance of Letters of Credit................ 21
SECTION 3.3 Fees and Other Charges..................................... 22
SECTION 3.4 L/C Participations......................................... 22
SECTION 3.5 Reimbursement.............................................. 23
SECTION 3.6 Provisions Regarding National Currency Units and the Euro.. 24
SECTION 3.7 Obligations Absolute....................................... 26
SECTION 3.8 Effect of Application...................................... 27
ARTICLE IV [RESERVED]..................................................... 27
ARTICLE V GENERAL LOAN PROVISIONS......................................... 27
SECTION 5.1 Interest................................................... 27
SECTION 5.2 Notice and Manner of Conversion or Continuation of
Revolving Credit Loans..................................... 29
SECTION 5.3 Fees....................................................... 29
SECTION 5.4 Manner of Payment.......................................... 30
SECTION 5.5 Crediting of Payments and Proceeds......................... 30
SECTION 5.6 Adjustments................................................ 31
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent............. 31
SECTION 5.8 Joint And Several Liability Of The Credit Parties.......... 32
SECTION 5.9 Changed Circumstances...................................... 33
SECTION 5.10 Indemnity.................................................. 36
SECTION 5.11 Capital Requirements....................................... 37
SECTION 5.12 Taxes...................................................... 37
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ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING................... 39
SECTION 6.1 Closing.................................................... 39
SECTION 6.2 Conditions to Closing and Initial Revolving Credit Loans
and Letters of Credit...................................... 39
SECTION 6.3 Conditions to All Extensions of Credit..................... 42
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES.......... 43
SECTION 7.1 Representations and Warranties............................. 43
SECTION 7.2 Survival of Representations and Warranties, Etc............ 48
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES............................ 49
SECTION 8.1 Financial Statements and Projections....................... 49
SECTION 8.2 Officer's Compliance Certificate........................... 50
SECTION 8.3 Accountants' Certificate................................... 50
SECTION 8.4 Other Reports.............................................. 50
SECTION 8.5 Notice of Litigation and Other Matters..................... 50
SECTION 8.6 Accuracy of Information.................................... 51
ARTICLE IX AFFIRMATIVE COVENANTS.......................................... 51
SECTION 9.1 Preservation of Corporate Existence and Related Matters.... 51
SECTION 9.2 Maintenance of Property.................................... 51
SECTION 9.3 Insurance.................................................. 52
SECTION 9.4 Accounting Methods and Financial Records................... 52
SECTION 9.5 Payment and Performance of Obligations..................... 52
SECTION 9.6 Compliance With Laws and Approvals......................... 52
SECTION 9.7 Environmental Laws......................................... 52
SECTION 9.8 Compliance with ERISA...................................... 53
SECTION 9.9 Conduct of Business........................................ 53
SECTION 9.10 Visits and Inspections..................................... 53
SECTION 9.11 Use of Proceeds............................................ 53
SECTION 9.12 Year 2000 Compatibility.................................... 53
ARTICLE X FINANCIAL COVENANTS............................................. 54
SECTION 10.1 Interest Coverage Ratio.................................... 54
SECTION 10.2 Minimum Net Worth.......................................... 54
ARTICLE XI NEGATIVE COVENANTS............................................. 54
SECTION 11.1 Limitations on Debt and Guaranty Obligations............... 54
SECTION 11.2 [Reserved]................................................. 56
SECTION 11.3 Limitations on Liens....................................... 56
SECTION 11.4 Limitations on Loans, Advances, Investments and
Acquisitions............................................... 58
SECTION 11.5 Limitations on Mergers and Liquidation..................... 59
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SECTION 11.6 Limitations on Sale or Transfer of Assets.................. 60
SECTION 11.7 Limitations on Dividends and Distributions................. 60
SECTION 11.8 Transactions with Affiliates............................... 60
SECTION 11.9 Changes in Fiscal Year End................................. 61
SECTION 11.10 Amendments; Payments and Prepayments of Material Debt and
Subordinated Debt.......................................... 61
ARTICLE XII DEFAULT AND REMEDIES.......................................... 61
SECTION 12.1 Events of Default.......................................... 61
SECTION 12.2 Remedies................................................... 63
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc............ 64
ARTICLE XIII THE ADMINISTRATIVE AGENT..................................... 64
SECTION 13.1 Appointment................................................ 64
SECTION 13.2 Delegation of Duties....................................... 65
SECTION 13.3 Exculpatory Provisions..................................... 65
SECTION 13.4 Reliance by the Administrative Agent....................... 65
SECTION 13.5 Notice of Default.......................................... 66
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders. 66
SECTION 13.7 Indemnification............................................ 67
SECTION 13.8 The Administrative Agent in Its Individual Capacity........ 67
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent....................................... 67
SECTION 13.10 Syndication Agents and Documentation Agent................. 68
ARTICLE XIV MISCELLANEOUS................................................. 68
SECTION 14.1 Notices.................................................... 68
SECTION 14.2 Expenses; Indemnity........................................ 69
SECTION 14.3 Set-off.................................................... 70
SECTION 14.4 Governing Law.............................................. 70
SECTION 14.5 Consent to Jurisdiction.................................... 70
SECTION 14.6 Waiver of Jury Trial....................................... 70
SECTION 14.7 Reversal of Payments....................................... 70
SECTION 14.8 Injunctive Relief; Punitive Damages........................ 71
SECTION 14.9 Accounting Matters......................................... 71
SECTION 14.10 Successors and Assigns; Participations..................... 71
SECTION 14.11 Amendments, Waivers and Consents........................... 76
SECTION 14.12 Performance of Duties...................................... 76
SECTION 14.13 All Powers Coupled with Interest........................... 76
SECTION 14.14 Survival of Indemnities.................................... 77
SECTION 14.15 Titles and Captions........................................ 77
SECTION 14.16 Severability of Provisions................................. 77
SECTION 14.17 Counterparts............................................... 77
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SECTION 14.18 Term of Agreement.......................................... 77
SECTION 14.19 Inconsistencies with Other Documents; Independent Effect of
Covenants.................................................. 77
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EXHIBITS
Exhibit A - Form of Second Amended and Restated Revolving Credit Note
Exhibit B - Form of Notice of Revolving Credit Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1(a) - Lenders and Revolving Credit Commitments
Schedule 1.1(b) - Outstanding Letters of Credit
Schedule 1.1(c) - Outstanding Nine West Letters of Credit
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(p) - Debt and Guaranty Obligations
Schedule 7.1(q) - Litigation
Schedule 11.3 - Existing Liens
Schedule 11.4 - Existing Loans, Advances and Investments
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SECOND AMENDED AND RESTATED 364-DAY CREDIT AGREEMENT, dated as of the 15th
day of June, 1999, by and among ▇▇▇▇▇ APPAREL GROUP USA, INC., a Pennsylvania
corporation, the Additional Obligors (as defined below), the Lenders who are or
may become a party to this Agreement, FIRST UNION NATIONAL BANK, as
Administrative Agent for the Lenders, THE CHASE MANHATTAN BANK and CITIBANK,
N.A., as Syndication Agents, and NATIONSBANK, N.A., as Documentation Agent.
STATEMENT OF PURPOSE
The Borrower (as defined below) has requested and the Lenders have agreed
to amend and restate the Prior Credit Agreements (as defined below) as set forth
herein to (i) make the appropriate adjustments contemplated by the Prior Credit
Agreements to account for the happening of the Asset Drop-Down (as defined in
the Prior Credit Agreements); and (ii) amend and restate, and as of the Closing
Date replace, on substantially the same terms, the Obligations provided for in
the Prior Credit Agreements and the Master Joinder Agreement dated January 1,
1999 among ▇▇▇▇▇ Apparel Group, Inc., ▇▇▇▇▇ Apparel Group USA, Inc., ▇▇▇▇▇
Apparel Group Holdings, Inc. and First Union National Bank as Administrative
Agent.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Additional Debt Securities" shall have the meaning set forth in Section
11.1(f).
"Additional Obligors" means, the collective reference to ▇▇▇▇▇ Apparel
Group, ▇▇▇▇▇ Apparel Group Holdings and New Nine West Group in their capacities
as co-obligors under this Agreement.
"Administrative Agent" means First Union in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Affiliate" means, with respect to any Person, any other Person (other than
a Subsidiary) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any of its Subsidiaries. The term "control" means the possession,
directly or indirectly, of any power to direct or cause the direction of the
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management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agreement" means this Second Amended and Restated 364-Day Credit
Agreement, as amended, restated, supplemented or otherwise modified.
"Alternative Currency" means (i) Pounds Sterling, (ii) any national
currency of Italy, Spain, the Federal Republic of Germany or the Republic of
France (in each case, so long as such national currency unit continues to be
available as legal tender for obligations of the same type and character as the
obligations set forth in this Agreement, is freely convertible and is not
subject to exchange controls), (iii) the euro or (iv) any other lawful currency
(other than Dollars) acceptable to the Issuing Lenders which, in the case of
this clause (iv), is freely transferable and convertible into Dollars in the
United States currency market and is freely available to all Issuing Lenders
in the London interbank deposit market.
"Alternative Currency L/C Commitment" means the lesser of (a) One Hundred
Million Dollars ($100,000,000) and (b) the L/C Commitment.
"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities
and all orders and decrees of all courts and arbitrators.
"Applicable Margin" means, for purposes of calculating (a) the Base Rate
and LIBOR Rate for purposes of Section 5.1(a), (b) the L/C Fee for purposes of
Section 3.3(a) or (c) the Facility Fee for purposes of Section 5.3(a), the
corresponding rate set forth below for the applicable rating of the senior,
unsecured, long-term debt of the Credit Parties, on a collective basis (the
"Debt Rating") publicly announced by Standard & Poor's Ratings Group ("S&P")
and ▇▇▇▇▇'▇ Investors Service, Inc. ("Moodys") as follows:
Applicable Margin Per Annum
---------------------------------------------
Level S&P Rating Moodys Rating LIBOR Rate Base Rate Trade Standby Facility
L/C Fee L/C Fee Fee
I >=A- >=A3 0.350% 0.000% 0.150% 0.350% 0.100%
II >=BBB+ >=Baa1 0.500% 0.000% 0.200% 0.500% 0.125%
III >=BBB >=Baa2 0.600% 0.000% 0.225% 0.600% 0.150%
IV >=BBB- >=Baa3 0.800% 0.000% 0.300% 0.800% 0.200%
V <=BB+ <=Ba1 1.025% 0.000% 0.350% 1.025% 0.250%
provided, that if both Moodys and S&P shall not have in effect a Debt Rating
(other than by reason of the circumstances referred to in the last sentence of
this definition), then such Debt Rating shall be deemed to be Level V. In the
event that the corresponding Debt Ratings publicly announced by S&P and Moodys
listed above differ by (a) one pricing level, the Applicable Margin shall be
based on the higher of the two ratings, and (b) two or more pricing levels, the
3
Applicable Margin shall be based on the rating one rating below the higher of
the two ratings. Any change in the Applicable Margin shall be effective as of
the Business Day on which the applicable rating is announced or is publicly
available. If the rating system of S&P and Moodys shall change, or if both
of such rating agencies shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good faith
to amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agencies and, pending the
effectiveness of any such amendment, the Applicable Margin shall be
determined by reference to the rating most recently in effect prior to
such change or cessation.
"Application" means an application, in the form specified by any Issuing
Lender from time to time, requesting such Issuing Lender to issue a Letter of
Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the sum of (i) the Federal Funds Rate plus (ii) 1/2 of 1%; each change in the
Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means any Revolving Credit Loan bearing interest at a rate
based upon the Base Rate as provided in Section 5.1(a).
"beginning of the Third State of EMU" means January 1, 1999.
"Borrower" means ▇▇▇▇▇ Apparel Group USA, Inc.
"Business Day" means (a) any day other than a Saturday, Sunday or legal
holiday on which banks in Charlotte, North Carolina, Philadelphia, Pennsylvania
and New York, New York, are not authorized or required by law to remain closed
for the conduct of their commercial banking business, (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, the term "Business Day" shall also exclude
any day on which banks are not open for trading in Dollar deposits in the
London interbank market, and (c) with respect to all notices and determinations
in connection with, and payment of principal and interest on, any L/C Obligation
denominated in an Alternative Currency; the term "Business Day" shall also
exclude any day on which banks in London do not provide quotations for deposits
denominated in such Alternative Currency.
"Capital Lease" means, with respect to the Credit Parties and their
Subsidiaries, any lease of any property that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Credit Parties and their Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
12.1(h).
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Section 6.2 shall be satisfied or waived
in all respects.
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"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified from
time to time.
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Credit Parties and their Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Correspondent" means any financial institution designated by an Issuing
Lender to act as such Issuing Lender's correspondent hereunder with respect to
the distribution and payment of Letters of Credit denominated in an Alternative
Currency.
"Credit Facility" means the collective reference to the Revolving Credit
Facility and the L/C Facility.
"Credit Parties" means each of the Additional Obligors and the Borrower.
"Debt" means, with respect to the Credit Parties and their Subsidiaries at
any date and without duplication, the sum of the following calculated in
accordance with GAAP: (a) all liabilities, obligations and indebtedness, in
each case for borrowed money including but not limited to obligations evidenced
by bonds, debentures, notes or other similar instruments of any such Person, (b)
all obligations to pay the deferred purchase price of property or services of
any such Person, except trade payables arising in the ordinary course of
business, (c) all obligations of any such Person as lessee under Capital
Leases, (d) all Debt of any other Person secured by a Lien on any asset of
any such Person, (e) all Guaranty Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the
amount of drawn letters of credit not reimbursed as required by the terms
thereof, including without limitation any Reimbursement Obligation not
reimbursed as required by the terms hereof, and banker's acceptances issued
for the account of any such Person, and (g) all obligations
incurred by any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Documentation Agent" means NationsBank, N.A., in its capacity as
documentation agent hereunder, and any successor thereto.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Dollar Amount" shall mean (a) with regard to any Obligation denominated in
Dollars, the amount thereof and (b) with regard to any Obligation denominated in
an Alternative Currency, the amount of Dollars which is equivalent to the sum of
(i) the amount so expressed in an Alternative Currency at the applicable-quoted
spot rate on the appropriate page of the ▇▇▇▇▇▇'▇ Screen as determined by the
Administrative Agent at the relevant time; plus (ii) any amounts owed by the
Borrower pursuant to Section 3.5(b).
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"EBITDAR" means, with respect to the Credit Parties and their Subsidiaries
on a Consolidated basis for any period, the sum of (a) Net Income for such
period, plus (b) the sum of the following to the extent deducted in the
determination of Net Income: (i) income and franchise taxes, (ii) Interest
Expense, (iii) amortization, depreciation, extraordinary non-cash losses and
any other non-cash charges (including amortization of goodwill, transaction
expenses, covenants not to compete and other intangible assets, and non-cash
charges resulting from purchase accounting related to the Nine West
Acquisition) and (iv) Rental Expense less (c) any items of extraordinary
gain which were included in determining Net
Income.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company,
insurance company or other financial institution which in the ordinary course
of business extends credit of the type extended hereunder and that has total
assets in excess of $1,000,000,000, (d) already a Lender hereunder (whether
as an original party to this Agreement or as the assignee of another Lender)
or an Affiliate of a Lender hereunder, (e) the successor (whether by transfer
of assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, (f) any SPC solely to the extent
permitted by Section 14.10(h), or (g) any other Person that has been approved
in writing as an Eligible Assignee by the Borrower and the Administrative Agent.
"EMU" mean economic and monetary union as contemplated in the Treaty on
European Union.
"EMU Legislation" means legislative measures of the European Council (or
any duly authorized successor thereto) for the introduction of the change over
to or operation of a single or unified European currency (whether known as the
euro or otherwise), being in part the beginning of the Third Stage of EMU.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six (6) years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, binding
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
6
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended, supplemented or otherwise
modified from time to time.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Estimated Net Worth" means the estimated Consolidated Net Worth as of the
Closing Date calculated in a manner reasonably satisfactory to the
Administrative Agent.
"euro" means the single currency to which Participating Member States of
the European Union have converted.
"euro unit" means the currency unit of the euro.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Debt Securities" means the 6.25% Senior Notes due 2001 of ▇▇▇▇▇
Apparel Group.
"Existing Loans" shall have the meaning assigned thereto in Section 6.2(f).
"Existing Nine West Accounts Receivable Facility" means the Receivables
Purchase Agreement dated as of December 28, 1995 by and between Nine West Group
and Nine West Funding Corporation, a Delaware corporation, and the related
pooling and servicing, undertaking and purchase agreements, each as amended,
supplemented or otherwise modified from time to time.
"Extensions of Credit" means, as to any Lender at any time, (a) an amount
equal to the sum of (i) the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding, and (ii) such Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then outstanding, or (b) the
making of any loan or participation in any Letter of Credit by such Lender, as
the context requires.
"Facility Fee" shall have the meaning assigned thereto in Section 5.3(a).
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
7
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any
reason, such rate is not available, then "Federal Funds Rate" shall mean a
daily rate which is determined, in the opinion of the Administrative Agent,
to be the rate at which federal funds are being offered for sale in the
national federal funds market at 9:00 a.m. (Charlotte time). Rates for
weekends or holidays shall be the same as the rate for the most immediate
preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Credit Parties and their
Subsidiaries ending on December 31.
"Five-Year Credit Agreement" means the Five-Year Credit Agreement of even
date herewith by and among the Borrower, the Additional Obligors, the
Administrative Agent and the financial institutions party thereto, as amended,
restated, supplemented or otherwise modified from time to time.
"Five-Year Credit Agreement Obligations" means the obligations of the
Borrower and the Additional Obligors under the Five-Year Credit Agreement.
"Fixed Exchange Rate" means the exchange rate for a national currency unit
into a euro unit set in accordance with EMU Legislation in effect from time to
time.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Credit Parties and their Subsidiaries throughout the period indicated.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Granting Lender" shall have the meaning assigned thereto in Section
14.10(h).
8
"Guaranty Obligation" means, with respect to the Credit Parties and their
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for
the purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include (i) endorsements for collection or deposit in
the ordinary course of business or (ii) a contractual commitment by one
Person to invest in another Person for so long as such investment is
expected to constitute a permitted investment under Section 11.4.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law, (d) the discharge or emission or release of which
requires a permit or license under any Applicable Law or other Governmental
Approval, or (e) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or forward rate agreement or other agreement regarding
the hedging of interest rate risk exposure executed in connection with hedging
the interest rate exposure of any Credit Party, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified from time to time.
"Interest Coverage Ratio" shall have the meaning assigned thereto in
Section 10.1.
"Interest Expense" means, for any period, total interest expense
(including, without limitation, interest expense attributable to Capital Leases)
determined on a consolidated basis, without duplication, for the Credit Parties
and their Subsidiaries in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"ISP 98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
9
"Issuing Lender" means (a) First Union and The Chase Manhattan Bank, each
in its capacity as issuer of any Letter of Credit, and any other Lender mutually
acceptable and on terms satisfactory to the Borrower and the Administrative
Agent and (b) with regard to any Letter of Credit denominated in an Alternative
Currency the Correspondent of any entity identified in clause (a); and Issuing
Lenders means all such Lenders.
"▇▇▇▇▇ Apparel Group" means ▇▇▇▇▇ Apparel Group, Inc., a Pennsylvania
corporation.
"▇▇▇▇▇ Apparel Group Holdings" means ▇▇▇▇▇ Apparel Group Holdings, Inc., a
Delaware corporation.
"L/C Commitment" means Five Hundred Million Dollars ($500,000,000).
"L/C Facility" means the letter of credit facility established pursuant to
Article III hereof.
"L/C Fee" shall have the meaning assigned thereto in Section 3.3(a).
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders having
a Revolving Credit Commitment other than the applicable Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set forth
on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 14.10 other than any party hereto
that ceases to be a party hereto pursuant to any Assignment and Acceptance.
"Lending Group Members" means the collective reference to (a) the Lenders
party to this Agreement and (b) the lenders party to the Five-Year Credit
Agreement.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Commitment Percentage of the
Revolving Credit Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section 3.1
and, on the Closing Date, shall also include the Outstanding Letters of Credit
and the Outstanding Nine West Letters of Credit (which shall be deemed to have
been issued hereunder for the account of the Borrower).
"LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow ▇▇▇▇▇
Market Screen 3750 (or on any successor or substitute page of such service, or
any successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing
10
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period (rounded upward,
if necessary, to the nearest one hundredth of one percent (1/100%)). If, for
any reason, such rate does not appear on Dow ▇▇▇▇▇ Market Screen 3750, then
"LIBOR" shall be determined by the Administrative Agent to be the arithmetic
average (rounded upward, if necessary, to the nearest one-hundredth of one
percent (1/100%)) of the rate per annum at which deposits in Dollars would be
offered by the Reference Group in the London interbank market to the
Administrative Agent as of approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period and in an amount substantially equal to
the amount of the applicable Revolving Credit Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Revolving Credit Loan bearing interest at a
rate based upon the LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan Documents" means, collectively, this Agreement, the Revolving Credit
Notes, the Applications and each other document, instrument and agreement
executed and delivered by any Credit Party, its Subsidiaries or their counsel
in connection with this Agreement or otherwise referred to herein or
contemplated hereby, all as may be amended, restated or otherwise modified.
"Material Adverse Effect" means, with respect to the Credit Parties or any
of their Subsidiaries, a material adverse effect on the business, assets,
operations or financial condition of the Credit Parties and their Subsidiaries
taken as a whole or the ability of any such Person to perform its obligations
under the Loan Documents, in each case to which it is a party.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making (or
has made), or is accruing (or has accrued) an obligation to make, contributions
either presently or within the preceding six years.
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"national currency unit" means the unit of currency (other than a euro
unit) of a Participating Member State.
"Net Income" means, with respect to the Credit Parties and their
Subsidiaries for any period, the Consolidated net income (or loss) of the Credit
Parties and their Subsidiaries for such period determined in accordance with
GAAP; provided, that there shall be excluded from net income (or loss), the
income (or loss) of any Person (other than a Subsidiary of such Person) in
which such Person has an ownership interest unless received by such Person
in a cash distribution.
"Net Worth" means, with respect to the Credit Parties and their
Subsidiaries, as of any date, the total shareholders' equity that would appear
on a Consolidated balance sheet of the Credit Parties and their Subsidiaries
prepared as of such date in accordance with GAAP.
"New Nine West Group" means ▇▇▇▇ Asset Sub Inc., a Delaware corporation, to
be renamed Nine West Group Inc. immediately following the Closing Date.
"Nine West Acquisition" means the acquisition of all of the outstanding
stock of Nine West Group by the Borrower, one of the Credit Parties or one of
their respective Subsidiaries.
"Nine West Acquisition Agreement" means the Agreement and Plan of Merger
dated as of March 1, 1999, among ▇▇▇▇▇ Apparel Group, ▇▇▇▇ Acquisition Sub Inc.,
a Delaware corporation and Wholly-Owned Subsidiary of ▇▇▇▇▇ Apparel Group, and
Nine West Group.
"Nine West Group" means Nine West Group Inc., a Delaware corporation.
"Non-Consenting Lenders" shall have the meaning assigned thereto in Section
2.6.
"Notice of Account Designation" shall have the meaning assigned thereto in
Section 2.2(b).
"Notice of Revolving Credit Borrowing" shall have the meaning assigned
thereto in Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned thereto
in Section 5.2.
"Notice of Prepayment" shall have the meaning assigned thereto in Section
2.3(c).
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Revolving Credit Loans,
(b) the L/C Obligations, (c) all payment and other obligations owing by the
Credit Parties to any Lender or Affiliate of a Lender or the Administrative
Agent under any Hedging Agreement with any Lender or Affiliate of a Lender
(which such Hedging Agreement is permitted hereunder), and (d) all other fees
and commissions (including attorney's fees), charges, indebtedness, loans,
liabilities, financial accommodations,
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obligations, covenants and duties owing by the Credit Parties to the Lenders or
the Administrative Agent, of every kind, nature and description, direct or
indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any
note, in each case under or in respect of this Agreement, any Revolving
Credit Note, any Letter of Credit or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
in Section 8.2.
"Operating Lease" shall mean, as to any Person, as determined in accordance
with GAAP, any lease of property (whether real, personal or mixed) by such
Person as lessee which is not a Capital Lease.
"Other Taxes" shall have the meaning assigned thereto in Section 5.12(b).
"Outstanding Letters of Credit" means each letter of credit described on
Schedule 1.1(b) and outstanding as of the Closing Date.
"Outstanding Nine West Letters of Credit" means each letter of credit
described on Schedule 1.1(c) and outstanding as of the Closing Date.
"Outstanding Nine West Debt Obligations" means the collective reference to (a)
the existing 8-3/8% Series B Senior Notes due 2005 of Nine West Group (the "Nine
West Senior Notes"), (b) the existing 9% Series B Senior Subordinated Notes due
2007 of Nine West Group (the "Nine West Senior Subordinated Notes") and (c) the
existing 5-1/2% Convertible Subordinated Notes due 2003 of Nine West Group (the
"Nine West Convertible Subordinated Notes").
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code.
"Permitted Lines of Business" shall have the meaning assigned thereto in
Section 9.9.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pounds Sterling" means, unless otherwise qualified, pounds sterling in
lawful currency of the United Kingdom.
13
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate in effect at its
principal office in Charlotte, North Carolina. Each change in the Prime Rate
shall be effective as of the opening of business on the day such change in the
Prime Rate occurs. The parties hereto acknowledge that the rate announced
publicly by First Union as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other banks.
"Prior Credit Agreements" means the Amended and Restated 364-Day Credit
Agreement and the Amended and Restated Three Year Credit Agreement, both dated
as of October 15, 1998, by and among the Borrower, the Prior Lenders and First
Union, as Administrative Agent.
"Prior Lenders" means, collectively, the lenders party to the Prior Credit
Agreements.
"Reference Group" shall mean the Lenders party to this Agreement on the
Closing Date.
"Register" shall have the meaning assigned thereto in Section 2.4(a).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Rental Expense" means, all obligations of the Credit Parties or any of
their Subsidiaries for payments under Operating Leases.
"Required Agreement Lenders" means, at any date, any combination of Lenders
whose Revolving Credit Commitment Percentage equals at least fifty-one percent
(51%) of the Revolving Credit Commitment or if the Revolving Credit Commitment
has been terminated, any combination of Lenders who collectively hold at least
fifty-one percent (51%) of the aggregate unpaid principal amount of the
Extensions of Credit.
"Required Lenders" means, at any date, any combination of Lending Group
Members whose Total Committed Percentage equals at least fifty-one percent (51%)
of the Total Committed Amount.
"Responsible Officer" means any of the following: the chairman, president,
chief executive officer, chief financial officer or vice president and corporate
controller of the Borrower or ▇▇▇▇▇ Apparel Group or any other officer of the
Borrower or ▇▇▇▇▇ Apparel Group reasonably acceptable to the Administrative
Agent.
14
"Revolving Credit Commitment" means (a) as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender's name on Schedule 1.1(a) hereto as such amount may
be reduced or modified at any time or from time to time pursuant to the terms
hereof and (b) as to all Lenders, the aggregate Revolving Credit Commitment of
all Lenders to make Revolving Credit Loans, as such amount may be reduced at any
time or from time to time pursuant to the terms hereof. The Revolving Credit
Commitment of all Lenders on the Closing Date shall be Five Hundred Million
Dollars ($500,000,000).
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Revolving Credit Commitment of all of the Lenders.
"Revolving Credit Facility" means the revolving credit facility established
pursuant to Article II hereof.
"Revolving Credit Loans" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the Second
Amended and Restated Revolving Credit Notes made by the Borrower under this
Agreement payable to the order of any such Lender requesting such note,
substantially in the form of Exhibit A hereto, evidencing the obligation owed to
such Lender under the Revolving Credit Facility, and any amendments and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part; "Revolving
Credit Note" means any of such Revolving Credit Notes.
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.6.
"SPC" shall have the meaning assigned thereto in Section 14.10(h).
"Subordinated Debt" means the collective reference to Debt on Schedule
7.1(p) hereof designated as Subordinated Debt and any other Debt of the Credit
Parties or any Subsidiary thereof subordinated in right and time of payment to
the Obligations and otherwise permitted hereunder.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be Consolidated with those of the parent in
the parent's Consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise controlled,
by the parent or one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent. Unless otherwise qualified references
to "Subsidiary" or "Subsidiaries" herein shall refer to those of the Borrower.
"Sun Acquisition Agreement" means the Agreement and Plan of Merger dated
September 10, 1998 by and among the Borrower, SAI Acquisition Corp., Sun
Apparel, Inc. and the Shareholders of Sun Apparel, Inc., as amended and
modified from time to time.
15
"Syndication Agents" means The Chase Manhattan Bank and Citibank, N.A.,
each in their capacity as syndication agent hereunder, and any successor
thereto.
"Taxes" shall have the meaning assigned thereto in Section 5.12(a).
"Termination Event" means: (a) a "Reportable Event" described in Section
4043 of ERISA, or (b) the withdrawal of the Borrower or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment
of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other
event or condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to administer,
any Pension Plan, or (f) the partial or complete withdrawal of the Borrower or
any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien
pursuant to Section 412 of the Code or Section 302 of ERISA, or (h) any event
or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under
Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Third Stage Cutoff Date" shall have the meaning assigned to such term in
Section 3.6(c) hereof.
"Total Committed Amount" means (a) as to any Lending Group Member, the sum
of (i) the Revolving Credit Commitment of such Lending Group Member (or, if such
Revolving Credit Commitment has been terminated, the aggregate unpaid principal
amount of all outstanding Extensions of Credit of such Lending Group Member)
plus (ii) the Revolving Credit Commitment (as defined in the Five-Year Credit
Agreement) of such Lending Group Member (or, if such Revolving Credit Commitment
has been terminated, the aggregate unpaid principal amount of all outstanding
Extensions of Credit (as defined in the Five-Year Credit Agreement) of such
Lending Group Member) and (b) as to all Lenders, the aggregate Total Committed
Amount of all Lending Group Members.
"Total Committed Percentage" means, as to any Lending Group Member at any
time, the ratio of (a) the amount of the Total Committed Amount of such Lending
Group Member to (b) the aggregate Total Committed Amount of all Lending Group
Members.
"Treaty on European Union" means the Treaty of Rome of March 25, 1957, as
amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (signed
February 7, 1992), as amended from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York, as amended, restated or otherwise modified from time to time.
16
"Uniform Customs" the Uniform Customs and Practice for Documentary Credits
(1994 Revision), International Chamber of Commerce Publication No. 500.
"United States" means the United States of America.
"Utilization Fee" shall have the meaning assigned thereto in Section
5.3(b).
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by any Credit Party and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General
Unless otherwise specified, a reference in this Agreement to a particular
section, subsection, Schedule or Exhibit is a reference to that section,
subsection, Schedule or Exhibit of this Agreement. Terms defined in this
Agreement and the Five-Year Credit Agreement shall be construed consistently and
no term defined herein shall be limited or restricted by any similar definition
in the Five-Year Credit Agreement nor shall any such term herein limit or
restrict any similar definition in the Five-Year Credit Agreement. Wherever
from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated
in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement and the other Loan Documents or any certificate, report
or other document made or delivered pursuant to this Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(c) Any reference or usage of the word "amount" herein as it pertains
to any Obligation denominated in an Alternative Currency shall be deemed to be a
reference or usage of the term "Dollar Amount."
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Revolving
Credit Loans to the Borrower from time to time from the Closing Date through
the Revolving Credit Termination Date as requested by the Borrower in
accordance with the terms of Section 2.2; provided, that (a) the
17
aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to any amount requested) shall not exceed the Revolving Credit
Commitment less the sum of all outstanding L/C Obligations and (b) the
principal amount of outstanding Revolving Credit Loans from any Lender to the
Borrower shall not at any time exceed such Lender's Revolving Credit Commitment.
Each Revolving Credit Loan by a Lender shall be in a principal amount equal to
such Lender's Revolving Credit Commitment Percentage of the aggregate principal
amount of Revolving Credit Loans requested on such occasion. Subject to the
terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Revolving Credit Termination Date.
SECTION 2.2 Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit B
(a "Notice of Revolving Credit Borrowing") not later than 11:00 a.m. (Charlotte
time) (i) on the same Business Day as each Base Rate Loan and (ii) at least
three (3) Business Days before each LIBOR Rate Loan, of its intention to borrow,
specifying (A) the date of such borrowing, which shall be a Business Day, (B)
the amount of such borrowing, which shall be in an amount equal to the unused
amount of the Revolving Credit Commitment, or if less, (x) with respect to
Base Rate Loans in an aggregate principal amount of $1,000,000 or a whole
multiple of $250,000 in excess thereof and (y) with respect to LIBOR Rate
Loans in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof, (C) whether such Revolving Credit Loan is to
be a LIBOR Rate Loan or Base Rate Loan, and (D) in the case of a LIBOR Rate
Loan, the duration of the Interest Period applicable thereto. Notices
received after 11:00 a.m. (Charlotte time) shall be deemed received on the
next Business Day. The Administrative Agent shall promptly notify
the Lenders of each Notice of Revolving Credit Borrowing.
(b) Disbursement of Revolving Credit Loans. Not later than 2:00 p.m.
(Charlotte time) on the proposed borrowing date, each Lender will make available
to the Administrative Agent, for the account of the Borrower, at the office of
the Administrative Agent in funds immediately available to the Administrative
Agent, such Lender's Revolving Credit Commitment Percentage of the Revolving
Credit Loans to be made on such borrowing date. The Borrower hereby irrevocably
authorizes the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 2.2 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent notice of account designation, substantially
in the form of Exhibit C hereto (a "Notice of Account Designation"),
delivered by the Borrower to the Administrative Agent or as may be otherwise
agreed upon by the Borrower and the Administrative Agent from time to time.
Subject to Section 5.7 hereof, the Administrative Agent shall not be obligated
to disburse the portion of the proceeds of any Revolving Credit Loan requested
pursuant to this Section 2.2 for which any Lender is responsible to the extent
that such Lender has not made available to the Administrative Agent its
Revolving Credit Commitment Percentage of such Revolving Credit Loan.
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SECTION 2.3 Repayment of Revolving Credit Loans.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of all Revolving Credit Loans in full on the
Revolving Credit Termination Date, with all accrued but unpaid interest
thereon.
(b) Mandatory Repayment of Excess Extensions of Credit.
(i) If at any time the outstanding principal amount of all
Revolving Credit Loans plus the sum of all outstanding L/C Obligations exceeds
the Revolving Credit Commitment, the Borrower shall repay immediately upon
notice from the Administrative Agent, by payment to the Administrative Agent
for the account of the Lenders, Revolving Credit Loans and/or furnish cash
collateral reasonably satisfactory to the Administrative Agent or repay the
L/C Obligations in an amount equal to such excess. Such cash collateral shall
be applied in accordance with Section 12.2(b).
(ii) Excess Alternative Currency Letters of Credit. If the
Administrative Agent shall determine that the outstanding principal Dollar
Amount of all outstanding Letters of Credit denominated in an Alternative
Currency exceeds one hundred and five percent (105%) of the lesser of (A) the
L/C Commitment less the sum of the outstanding principal Dollar Amount of all
L/C Obligations and (B) the Alternative Currency L/C Commitment, in each case
as of the last Business Day of any calendar month during the term hereof, then
not later than three (3) Business Days after notice of the amount of such excess
from the Administrative Agent to the Borrower, the Borrower shall deposit an
amount in Dollars equal to such excess with the Administrative Agent to be
held as cash collateral in accordance with Section 12.2(b).
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit Loans, in whole or in part, upon at least three
(3) Business Days' irrevocable notice to the Administrative Agent with respect
to LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans, in the form attached hereto as Exhibit D (a "Notice of
Prepayment") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination thereof,
and, if of a combination thereof, the amount allocable to each. Upon receipt of
such notice, the Administrative Agent shall promptly notify each Lender. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date set forth in such notice. Partial repayments shall be
in an aggregate amount of $1,000,000 or a whole multiple of $250,000 in excess
thereof with respect to Base Rate Loans and $5,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to LIBOR Rate Loans.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.10 hereof.
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SECTION 2.4 Evidence of Debt.
(a) The Administrative Agent shall maintain a register and a subaccount
therein for each Lender (the "Register"), in which shall be recorded (i) the
amount of each Revolving Credit Loan made hereunder, including each Revolving
Credit Loan evidenced by a Revolving Credit Note, and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(b) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded, absent manifest error; provided,
however, that the failure of the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Revolving
Credit Loans made to the Borrower in accordance with the terms of this
Agreement.
(c) The Borrower hereby agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a Revolving Credit Note of such Borrower evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit A.
SECTION 2.5 Permanent Reduction of the Revolving Credit Commitment.
(a) Voluntary Reduction. The Borrower shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative Agent, to permanently reduce, without premium or penalty,
(i) the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $5,000,000 or any whole multiple of $1,000,000 in excess thereof.
(b) Each permanent reduction of the Revolving Credit Commitment made
pursuant to this Section 2.5 shall be accompanied, if necessary, by a payment of
principal sufficient to reduce the aggregate outstanding Revolving Credit Loans
and L/C Obligations, as applicable, after such reduction to the Revolving Credit
Commitment as so reduced and if the Revolving Credit Commitment as so reduced is
less than the aggregate amount of all outstanding Letters of Credit, the
Borrower shall be required to deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the amount by which the aggregate then
undrawn and unexpired amount of such Letters of Credit exceeds the Revolving
Credit Commitment as so reduced. Any reduction of the Revolving Credit
Commitment to zero (including upon termination of the Revolving Credit
Facility on the Revolving Credit Termination Date) shall be accompanied by
payment of all outstanding Revolving Credit Loans (and furnishing of cash
collateral satisfactory to the Administrative Agent for all L/C Obligations)
and shall result in the termination of the Revolving Credit Commitment and
the Revolving Credit Facility. Such cash collateral shall be applied in
accordance with Section 12.2(b). If the reduction of the Revolving
20
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.10
hereof.
SECTION 2.6 Termination of Revolving Credit Facility.
The Revolving Credit Facility shall terminate on the earliest of (a) June 13,
2000, (b) the date of termination of the entire Revolving Credit Commitment by
the Borrower pursuant to Section 2.5(a), and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a);
provided, that the Borrower may request on an annual basis a 364-day extension
of the date set forth in clause (a) above by providing the Administrative Agent
and each of the Lenders with a written request for such extension not more
than sixty (60) days and not fewer than fifty (50) days prior to the then
existing Revolving Credit Termination Date; provided further that each such
extension shall be subject to the satisfaction by the Borrower of each of
the conditions set forth in Section 6.3 on the then existing Revolving
Credit Termination Date. Each of the Lenders shall provide written notice
to the Administrative Agent on or prior to the thirtieth (30th) day (the
"Consent Date") before the then existing Revolving Credit Termination Date
of its desire to extend (any such Lender, a "Consenting Lender") or not to
so extend (any such Lender, a "Non-Consenting Lender") such date;
provided further, that the Termination Date shall not in any event extend
beyond June 13, 2004. No Lender shall be under any obligation or commitment to
extend such date and no such obligation or commitment on the part of any Lender
shall be inferred from the provisions of this Section 2.6. Failure on the part
of any Lender to respond to such request by the required date set forth above
shall be deemed to be a denial by such Lender of such request and all Revolving
Credit Loans of such Non-Consenting Lender shall be subject to the then existing
Revolving Credit Termination Date. If Lenders holding Revolving Credit
Commitment Percentages aggregating less than one hundred percent (100%) of
the Revolving Credit Commitment consent to such extension, the Borrower may
elect by written notice to the Administrative Agent and Lenders to (i)
continue the Revolving Credit Facility for such additional period with a
Revolving Credit Commitment equal to the then effective Revolving Credit
Commitment less the total Revolving Credit Commitment of the Non-Consenting
Lenders or (ii) require any such Non-Consenting Lender to transfer and assign
without recourse (in accordance with the provisions of Section 14.10) its
Revolving Credit Commitment and other interests, rights and obligations under
this Agreement to an Eligible Assignee (who consents thereto), which shall
assume such obligations upon its consent to assume such obligations;
provided that (A) no such assignment shall conflict with any Applicable Law,
(B) such assignment shall be at the cost and expense of the Borrower and (C)
the purchase price to be paid to such Non-Consenting Lender shall be an
amount equal to the outstanding principal amount of the Revolving Credit
Loans of such Non-Consenting Lender plus all interest accrued and unpaid thereon
and all other amounts owing to such Non-Consenting Lender thereon. To the
extent the Administrative Agent is a Consenting Lender, the Administrative
Agent agrees to use reasonable efforts to assist the Borrower in the
syndication of the total Revolving Credit Commitment of the Non-Consenting
Lenders after such extension; provided that any such syndication is made on
customary terms and the Administrative Agent is compensated for such services
in an amount reasonably acceptable to it. The Administrative Agent shall
provide a written list of the Consenting Lenders and Non-Consenting Lenders
to the Borrower and the Lenders promptly following the Consent Date (but in
no event less than twenty-five (25) days prior to the existing Revolving
Credit Termination Date). If the extension is granted, upon the then
existing date set forth in clause (a) of this Section 2.6, such date shall be
21
extended to the date which is 364 days from the then current date set forth
therein. If any L/C Obligations remain outstanding on the Revolving Credit
Termination Date, the Borrower shall provide cash collateral satisfactory to the
Administrative Agent for all such outstanding L/C Obligations. Such cash
collateral shall be applied in accordance with Section 12.2(b).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment.
Subject to the terms and conditions hereof, each Issuing Lender, in reliance
on the agreements of the other Lenders set forth in Section 3.4(a), agrees to
issue trade and standby letters of credit ("Letters of Credit") for the account
of the Borrower on any Business Day from the Closing Date through but not
including the Revolving Credit Termination Date in such form as may be approved
from time to time by such Issuing Lender; provided, that no Issuing Lender shall
have any obligation to issue any Letter of Credit if, after giving effect to
such issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b)
the L/C Obligations on account of Letters of Credit denominated in an
Alternative Currency would exceed the Alternative Currency L/C Commitment or
(c) the aggregate principal amount of outstanding Revolving Credit Loans, plus
the aggregate principal amount of L/C Obligations would exceed the Revolving
Credit Commitment. Each Letter of Credit shall (i) be denominated in (A)
Dollars, if such Letter of Credit is a standby Letter of Credit, or (B) Dollars
or an Alternative Currency, if such Letter of Credit is a trade Letter of
Credit, (ii) be a trade or standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, incurred in the ordinary course of business, (iii) expire on a date
no later than (A) two hundred twenty-five (225) days from the date of issuance
thereof for trade Letters of Credit and (B) one (1) year from the date of
issuance thereof for standby Letters of Credit, and (iv) be subject to the
Uniform Customs and/or ISP 98, as set forth in the Application or as determined
by the Issuing Lender and, to the extent not inconsistent therewith, the laws
of the State of New York. No Issuing Lender shall at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed
by, any Applicable Law. References herein to "issue" and derivations thereof
with respect to Letters of Credit shall also include extensions or modifications
of any existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit.
The Borrower may from time to time request that any Issuing Lender issue a
Letter of Credit (or amend, extend or renew an outstanding Letter of Credit) by
delivering to such Issuing Lender at any Issuing Lender's office at any address
mutually acceptable to the Borrower and such Issuing Lender an Application
therefor, including, if applicable, the office of such Issuing Lender's
Correspondent, completed to the satisfaction of such Issuing Lender, and such
other certificates, documents and other papers and information as such Issuing
Lender may reasonably request. Upon receipt of any Application, such Issuing
Lender shall process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall, subject to Section 3.1 and Article VI
hereof,
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promptly issue the Letter of Credit (or amend, extend or renew the outstanding
Letter of Credit) requested thereby (but in no event shall any Issuing Lender be
required to issue any Letter of Credit (or amend, extend or renew an outstanding
Letter of Credit) earlier than three (3) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by such Issuing
Lender and the Borrower. Within fifteen (15) Business Days after the end of
each month, the Administrative Agent shall report to each Lender the average
daily outstandings for each day in such month for all Letters of Credit during
the previous month.
SECTION 3.3 Fees and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account
of each Issuing Lender and the L/C Participants, a letter of credit fee (the
"L/C Fee") (i) with respect to each trade Letter of Credit, in an amount equal
to the Applicable Margin for trade Letters of Credit times the average daily
undrawn amount of such issued Letter of Credit as reported by the Administrative
Agent pursuant to Section 3.2 and (ii) with respect to each standby Letter of
Credit, in an amount equal to the Applicable Margin for standby Letters of
Credit times the face amount of such Letter of Credit. Such fee shall be
payable quarterly in arrears (x) for trade Letters of Credit, within fifteen
(15) Business Days after the end of each calendar quarter and on the Revolving
Credit Termination Date and (y) for standby Letters of Credit, on the last
Business Day of each calendar quarter and on the Revolving Credit Termination
Date.
(b) In addition to the foregoing commission, the Borrower shall pay the
Issuing Lenders an issuance fee of one eighth percent (1/8%) per annum on the
face amount of each standby Letter of Credit, payable quarterly in arrears on
the last Business Day of each calendar quarter and on the Revolving Credit
Termination Date.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to each Issuing Lender and the L/C Participants all fees
received by the Administrative Agent in accordance with their respective
Revolving Credit Commitment Percentages.
SECTION 3.4 L/C Participations.
(a) Each Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce such Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from such Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in such Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by such
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with each Issuing Lender that, if a draft is paid under any Letter of
Credit for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to such Issuing Lender upon demand at such Issuing Lender's address for notices
specified herein an amount in Dollars equal to such L/C Participant's Revolving
Credit Commitment Percentage
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of the Dollar Amount of such draft, or any part thereof, which is not
so reimbursed, such payment to be made by the making of a Base Rate Loan in
Dollars pursuant to Section 3.5(c) below.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to any Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by such Issuing Lender under any Letter
of Credit, the Administrative Agent shall notify each L/C Participant of the
amount and due date of such required payment and such L/C Participant shall pay
to such Issuing Lender the amount specified on the applicable due date. If any
such amount is paid to such Issuing Lender after the date such payment is due,
such L/C Participant shall pay to such Issuing Lender on demand, in addition to
such amount, the product of (i) such amount, times (ii) the daily average
Federal Funds Rate as determined by the Administrative Agent during the period
from and including the date such payment is due to the date on which such
payment is immediately available to such Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360. A certificate of any Issuing Lender with
respect to any amounts owing under this Section 3.4(b) shall be conclusive in
the absence of manifest error. With respect to payment to any Issuing Lender of
the unreimbursed amounts described in this Section 3.4(b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such payment
shall be due on the following Business Day.
(c) Whenever, at any time after any Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Revolving Credit Commitment Percentage of such payment in accordance with this
Section 3.4, such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, or any payment of
interest on account thereof), such Issuing Lender will distribute to such L/C
Participant its pro rata share thereof in accordance with such L/C Participant's
Revolving Credit Commitment Percentage; provided, that in the event that any
such payment received by such Issuing Lender shall be required to be returned by
such Issuing Lender, such L/C Participant shall return to such Issuing Lender
the portion thereof previously distributed by such Issuing Lender to it.
SECTION 3.5 Reimbursement.
(a) Reimbursement by the Borrower. The Borrower agrees to reimburse
each Issuing Lender on each date the Administrative Agent notifies the Borrower
of the date and amount of a draft paid under any Letter of Credit for the amount
of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by any Issuing Lender in connection with such payment (other
than those payable pursuant to Section 3.5(b) below). Each such payment shall
be made to any Issuing Lender at its address for notices specified herein (i) in
Dollars if such Letter of Credit was denominated in Dollars or (ii) in Dollars
or the applicable Alternative Currency, at the option of the Borrower, if such
Letter of Credit was denominated in an Alternative Currency, and in each case,
in immediately available funds. Interest shall be payable on any and all
amounts remaining unpaid by the Borrower under this Article III from the day
24
immediately following the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue.
(b) Exchange Indemnification and Increased Costs. The Borrower shall,
upon demand from any Issuing Lender or L/C Participant, pay to such Issuing
Lender or L/C Participant, the amount of (i) any loss or cost or increased cost
incurred by such Issuing Lender or L/C Participant, (ii) any reduction in any
amount payable to or in the effective return on the capital to such Issuing
Lender or L/C Participant, (iii) any currency exchange loss, in each case with
respect to clauses (i), (ii) and (iii), that such Issuing Lender or L/C
Participant sustains as a result of the Borrower's repayment in Dollars of any
Letter of Credit denominated in an Alternative Currency or (iv) any interest or
any other return, including principal, foregone by such Issuing Lender as a
result of the introduction of, change over to or operation of the euro in any
member state participating in the euro. A certificate of such Issuing Lender
setting forth in reasonable detail the basis for determining such additional
amount or amounts necessary to compensate such Issuing Lender shall be
conclusively presumed to be correct save for manifest error.
(c) Reimbursement by the Lenders. If the Borrower fails to timely
reimburse such Issuing Lender on the date the Borrower receives the notice
referred to in this Section 3.5, the Borrower shall be deemed to have timely
given a Notice of Revolving Credit Borrowing pursuant to Section 2.2 hereunder
to the Administrative Agent requesting the Lenders to make a Base Rate Loan on
such date in an amount in Dollars equal to the Dollar Amount (as of the date of
funding of such Base Rate Loan by each Lender) of such draft paid, together with
any taxes, fees, charges or other costs or expenses incurred by any Issuing
Lender and to be reimbursed pursuant to this Section 3.5 and, regardless of
whether or not the conditions precedent specified in Article VI have been
satisfied, the Lenders shall make Base Rate Loans in such amount, the proceeds
of which shall be applied to reimburse such Issuing Lender for the amount of the
related drawing and costs and expenses. Notwithstanding the foregoing, nothing
in this Section 3.5 shall obligate the Lenders to make such Base Rate Loans if
the making of such Base Rate Loans would violate the automatic stay under
federal bankruptcy laws.
SECTION 3.6 Provisions Regarding National Currency Units and the Euro.
(a) Effectiveness of Provisions. To the extent that any provision of
this Section 3.6 relates to any state (or the national currency unit of such
state) that is not a Participating Member State at the beginning on the Third
Stage of EMU, such provision shall become effective in relation to such state
(and the national currency unit of such state) at and from the date on which
such state becomes a Participating Member State.
(b) Continuity of Contract. The Administrative Agent, the Lenders and
the Borrower agree that the occurrence or non-occurrence of EMU, any event or
events associated with EMU and/or the introduction of the euro in all or any
part of the European Union will not result in the discharge, cancellation,
rescission or termination in whole or in part of any agreement between the
Administrative Agent, any
25
Lender and the Borrower or give the Administrative Agent, any Lender or
the Borrower the right to cancel, rescind, terminate or vary any agreement,
other than as specifically provided in this Agreement.
(c) Redenomination and Alternative Currencies. Each obligation of any
party under this Agreement which has been denominated in the national currency
unit of a Participating Member State shall be automatically redenominated into
the euro unit at the Fixed Exchange Rate on January 1, 2002 (the "Third Stage
Cutoff Date") and shall thereafter be payable solely in euro; provided, that if
and to the extent that any EMU Legislation provides that following the beginning
of the Third Stage of EMU, and prior to the Third Stage Cutoff Date, an amount
denominated either in the euro unit or in the national currency unit of a
Participating Member State and payable within the Participating Member State by
crediting an account of a creditor can be paid by a debtor either in the euro
unit or in that national currency unit, each party to this Agreement shall be
entitled to pay or repay any such amount either in the euro unit or in such
national currency unit; provided, however, any amount paid in a national
currency unit shall equal, at the Fixed Exchange Rate for that national currency
unit, the required amount stated to be due in euro units.
(d) Payments. Those Sections of this Agreement providing for payment or
repayment by the Borrower in a national currency unit shall be construed so
that, in relation to the payment of any amount of euro units or national
currency units, such amount shall be made available to the Administrative Agent,
any Issuing Lender or any Lender, as applicable, in immediately available,
freely transferable, cleared funds to such account with each bank (in such
principal financial center) as the Administrative Agent, any Issuing Lender or
any Lender, as applicable, may from time to time nominate for this purpose.
(e) Payments by the Administrative Agent and Issuing Lenders Generally. With
respect to the payment of any amount denominated in the euro unit or in a
national currency unit, the Administrative Agent and the Issuing Lenders shall
not be liable to the Borrower or any of the Lenders in any way whatsoever for
any delay, or the consequences of any delay, in the crediting to any account of
any amount required by this Agreement to be paid by the Administrative Agent or
any Issuing Lender, as applicable, if the Administrative Agent or any Issuing
Lender, as applicable, has made reasonable effort to effect all relevant steps
to achieve, on the date required by this Agreement, the payment of such amount
in immediately available, freely transferable, cleared funds (in the euro unit
or, as the case may be, in a national currency unit) to the account with the
bank in the principal financial center in the Participating Member State which
the Borrower or, as the case may be, any Lender shall have specified for such
purpose. In this paragraph, "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures of such
clearing or settlement system as the Administrative Agent or any Issuing Lender,
as applicable, may from time to time reasonably believe to be in effect for the
purpose of clearing or settling payment of the euro.
(f) Rounding and Other Consequential Changes. Without prejudice and in
addition to any method of conversion or rounding prescribed by any EMU
Legislation and without prejudice to the respective liabilities for indebtedness
of the Borrower to the Administrative Agent, any Issuing Lender or any Lender,
as applicable, and the Administrative Agent, any
26
Issuing Lender or any Lender, as applicable, to the Borrower under or pursuant
to this Agreement:
(i) each reference in this Agreement to a minimum amount (or an integral
multiple thereof) in a national currency unit to be paid to or by the
Administrative Agent, any Issuing Lender or any Lender, as applicable, shall be
replaced by a reference to such reasonably comparable amount (or an integral
multiple thereof) in the euro unit as the Administrative Agent may from time to
time specify; and
(ii) except as expressly provided in this Agreement, each provision of this
Agreement, including, without limitation, the right to combine currencies to
affect a set off, shall be subject to such reasonable changes of interpretation
as the Administrative Agent may from time to time specify to be necessary or
appropriate to reflect the introduction of or change over to the euro in
Participating Member States necessary or appropriate to reflect the
implementation of EMU to place the parties hereto in substantially the
position they would have occupied had EMU not been implemented.
(g) Further Assurance. The Borrower agrees, at the request of the
Administrative Agent or any Issuing Lender, at the time of or at any time
following the implementation of EMU, to enter into an agreement amending this
Agreement in such manner as the Administrative Agent or such Issuing Lender
reasonably shall request in order to reflect the implementation of EMU to place
the parties hereto in the position they would have been in had EMU not been
implemented.
SECTION 3.7 Obligations Absolute.
The Borrower's obligations under this Article III (including without
limitation the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim
or defense to payment which the Borrower may have or have had against any
Issuing Lender or any beneficiary of a Letter of Credit. The Borrower also
agrees with each Issuing Lender that no Issuing Lender shall be responsible
for, and the Borrower's Reimbursement Obligation under Section 3.5 shall not
be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even though such documents shall in fact
prove to be invalid, fraudulent or forged, or any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. No Issuing Lender shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by such Issuing Lender's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by any Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and/or
ISP 98, as set forth in the Application or as determined by the Issuing Lender
and, to the extent not inconsistent therewith, the laws of the State of New
York, shall be binding on the Borrower and shall not result in any
liability of any Issuing Lender to the Borrower. The responsibility of each
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of
27
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
SECTION 3.8 Effect of Application.
To the extent that any provision of any Application related to any Letter of
Credit is inconsistent with the provisions of this Article III, the provisions
of this Article III shall apply.
ARTICLE IV
[RESERVED]
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
5.1, at the election of the Borrower, the aggregate principal balance of any
Revolving Credit Loans shall bear interest at (i) the Base Rate plus the
Applicable Margin or (ii) the LIBOR Rate plus the Applicable Margin; provided
that LIBOR Rate Loans shall not be available until three (3) Business Days after
the Closing Date unless the Borrower executes and delivers an indemnity in favor
of the Administrative Agent and the Lenders in form and substance satisfactory
to them. The Borrower shall select the rate of interest and Interest Period, if
any, applicable to any Revolving Credit Loan at the time a Notice of Revolving
Credit Borrowing is given pursuant to Section 2.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 5.2. Each Revolving Credit
Loan or portion thereof bearing interest based on the Base Rate shall be a "Base
Rate Loan", and each Revolving Credit Loan or portion thereof bearing interest
based on the LIBOR Rate shall be a "LIBOR Rate Loan." Any Revolving Credit Loan
or any portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such
Revolving Credit Loan, which Interest Period shall, unless otherwise agreed by
the Administrative Agent and the Lenders, be a period of one (1), two (2), three
(3), or six (6) months with respect to each LIBOR Rate; provided that:
(i) the Interest Period shall commence on the date of advance of
or conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
28
(ii) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period with respect to a LIBOR Rate
Loan would otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Termination Date; and
(v) there shall be no more than six (6) Interest Periods in
effect at any time.
(c) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent and Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum two percent (2%) in excess of the rate then
applicable to LIBOR Rate Loans, as applicable, until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) in excess of
the rate then applicable to Base Rate Loans, and (iii) all outstanding Base Rate
Loans shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans. Interest shall continue
to accrue on the amount of Revolving Credit Loans outstanding after the filing
by or against the Borrower of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.
(d) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing June 30, 1999; and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto, and if such Interest
Period exceeds three (3) months, at the end of each three (3) month interval
during such Interest Period. Interest on LIBOR Rate Loans and all fees payable
hereunder shall be computed on the basis of a 360-day year and assessed for the
actual number of days elapsed and interest on Base Rate Loans shall be computed
on the basis of a 365/66-day year and assessed for the actual number of days
elapsed.
(e) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Loan
Documents charged or collected pursuant to the terms of this Agreement or
pursuant to any other Loan Document exceed the highest rate permissible under
any Applicable Law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court
determines that the Lenders have charged or received interest hereunder in
excess of the highest applicable rate,
29
the rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lenders shall at the Administrative Agent's
option (i) promptly refund to the Borrower any interest received by Lenders in
excess of the maximum lawful rate or (ii) shall apply such excess to the
principal balance of the Obligations. It is the intent hereof that
the Borrower not pay or contract to pay, and that neither the Administrative
Agent nor any Lender receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by the
Borrower under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of
Revolving Credit Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option (a) to convert all or any portion of its
outstanding Base Rate Loans in a principal amount equal to $5,000,000 or any
whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans
and (b), (i) to convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $250,000 in excess
thereof into Base Rate Loans or (ii) to continue such LIBOR Rate Loans as LIBOR
Rate Loans for an additional Interest Period; provided that if any conversion or
continuation is made prior to the expiration of any Interest Period, the
Borrower shall pay any amount required to be paid pursuant to Section 5.10
hereof. Whenever the Borrower desires to convert or continue Revolving Credit
Loans as provided above, the Borrower shall give the Administrative Agent
irrevocable prior written notice in the form attached as Exhibit E (a "Notice of
Conversion/Continuation") not later than 11:00 a.m. (Charlotte time) three (3)
Business Days before the day on which a proposed conversion or continuation of
such Revolving Credit Loan is to be effective (except in the case of a
conversion of a LIBOR Rate Loan to a Base Rate Loan in which case same day
notice by the Borrower shall be sufficient) specifying (A) the Revolving Credit
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Revolving Credit Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
SECTION 5.3 Fees.
(a) Facility Fees. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders, a non-refundable facility fee (the "Facility
Fee") at a rate per annum equal to the Applicable Margin on the full amount of
the Revolving Credit Commitment, regardless of usage. The Facility Fee shall be
payable in arrears on the last Business Day of each calendar quarter for the
period commencing on the Closing Date and ending on the Revolving Credit
Termination Date. The Facility Fee shall be distributed by the Administrative
Agent to the Lenders pro rata in accordance with the Lenders' respective
Revolving Credit Commitment Percentages.
(b) Utilization Fee. The Borrower shall pay a utilization fee (the
"Utilization Fee") at a rate per annum equal to 0.125% on the average amount of
outstanding Revolving Credit Loans during each fiscal quarter that such average
exceeds $275,000,000 (exclusive of any issued and
30
outstanding Letters of Credit). The average amount of Revolving Credit Loans for
any fiscal quarter shall be calculated by the Administrative Agent (which such
calculation shall be conclusively presumed correct save manifest error) as
follows: (i) the sum of the principal amount of outstanding Revolving Credit
Loans at the close of business for each day during such fiscal quarter, divided
by
(ii) the total number of days of such fiscal quarter. The Utilization Fee shall
be payable in arrears on the fifteenth (15th) day following written notification
by the Administrative Agent to the Borrower of the average for the preceding
quarter and the resulting Utilization Fee. The Utilization Fee shall be
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Revolving Credit Commitment Percentage.
(c) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Revolving Credit Loans
and for its obligations hereunder, the Borrower agrees to pay to the
Administrative Agent, for its account, the fees set forth in the separate fee
letter agreement executed by the Borrower and the Administrative Agent dated
April 22, 1999.
SECTION 5.4 Manner of Payment.
Each payment by the Borrower on account of the principal of or interest on the
Revolving Credit Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement or any
other Loan Document shall be made not later than 1:00 p.m. (Charlotte time) on
the date specified for payment under this Agreement to the Administrative Agent
at the Administrative Agent's Office for the account of the Lenders (other than
as set forth below) pro rata in accordance with their respective Revolving
Credit Commitment Percentages (except as specified below), in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 2:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 12.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
accordance with such Lender's Revolving Credit Commitment Percentage (except as
specified below), and shall wire advice of the amount of such credit to each
Lender. Each payment to the Administrative Agent of the L/C Participants'
commissions shall be made in like manner, but for the account of the L/C
Participants. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Section 5.9, 5.10, 5.11, 5.12
or 14.2 shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 5.1(b)(ii), if any payment under this
Agreement or any other Loan Document shall be specified to be made upon a day
which is not a Business Day, it shall be made on the next succeeding day which
is a Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
SECTION 5.5 Crediting of Payments and Proceeds.
In the event that the Borrower shall fail to pay any of the Obligations when
due and the Obligations have been
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accelerated pursuant to Section 12.2, all payments received by the Lenders upon
the Obligations and all net proceeds from the enforcement of the Obligations
shall be applied first to all expenses then due and payable by the Borrower
hereunder, then to all indemnity obligations then due and payable by the
Borrower hereunder, then to all Administrative Agent's fees then due and
payable, then to all commitment and other fees and commissions then due and
payable, then to accrued and unpaid interest hereunder or under any other Loan
Document, and Reimbursement Obligation (pro rata in accordance with all such
amounts due), then to the principal amount hereunder or under any other Loan
Document, Reimbursement Obligation and any termination payments due in respect
of a Hedging Agreement with any Lender or Affiliate of a Lender (which Hedging
Agreement is permitted hereunder) (pro rata in accordance with all such amounts
due) and then to the cash collateral account described in Section 12.2(b) hereof
to the extent of any L/C Obligations then outstanding, in that order.
SECTION 5.6 Adjustments.
If any Lender (a "Benefited Lender") shall at any time receive any payment of
all or part of the Obligations owing to it, or interest thereon, or if any
Lender shall at any time receive any collateral in respect to the Obligations
owing to it (whether voluntarily or involuntarily, by set-off or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, or
interest thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Extensions of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 5.7 Nature of Obligations of Lenders Regarding
Extensions of Credit; Assumption by the Administrative Agent.
The obligations of the Lenders under this Agreement to make the Revolving
Credit Loans and issue or participate in Letters of Credit are several and are
not joint or joint and several. Unless the Administrative Agent shall have
received notice from a Lender prior to a proposed borrowing date that such
Lender will not make available to the Administrative Agent such Lender's ratable
portion of the amount to be borrowed on such date (which notice shall not
release such Lender of its obligations hereunder), the Administrative Agent may
assume that such Lender has made such portion available to the Administrative
Agent on the proposed borrowing date in accordance with Sections 2.2(b) and 4.2,
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount
is made available to the Administrative Agent on a date after such borrowing
date, such Lender shall pay to the Administrative Agent on demand an amount,
until paid, equal to the product of (a) the amount not made available by such
Lender in accordance with the terms hereof, times (b) the daily average Federal
Funds Rate during such period as determined by the Administrative Agent, times
(c) a fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on
32
which such amount not made available by such Lender in accordance with
the terms hereof shall have become immediately available to the Administrative
Agent and the denominator of which is 360. A certificate of the Administrative
Agent with respect to any amounts owing under this Section 5.7 shall be
conclusive, absent manifest error. If such Lender's Revolving Credit Commitment
Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days of such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to such borrowing, on demand, from the Borrower. The failure of any Lender to
make available its Revolving Credit Commitment Percentage of any Revolving
Credit Loan requested by the Borrower shall not relieve it or any other Lender
of its obligation hereunder to make its Revolving Credit Commitment Percentage
of such Revolving Credit Loan available on the borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make its Revolving
Credit Commitment Percentage of such Revolving Credit Loan available on the
borrowing date.
SECTION 5.8 Joint And Several Liability Of The Credit Parties.
(a) Each of the Credit Parties is jointly and severally liable not
merely as a surety but as a co-debtor for each and every Obligation. Each of
the Credit Parties is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lenders
under this Agreement, for the mutual benefit, directly or indirectly, of each of
the Credit Parties and in consideration of the undertakings of each of the
Credit Parties to accept joint and several liability for the Obligations.
(b) Except as otherwise expressly provided herein, each Credit Party
hereby waives promptness, diligence, presentment, demand, protest, notice of
acceptance of its joint and several liability, notice of any and all advances of
the Revolving Credit Loans and Letters of Credit made under this Agreement and
the other Loan Documents, notice of occurrence of any Default or Event of
Default, or of any demand for any payment under this Agreement and notice of any
action at any time taken or omitted by the Administrative Agent or any Lender
under or in respect of any of the Obligations hereunder. Each Credit Party
hereby waives all defenses which may be available by virtue of any valuation,
stay, moratorium law or other similar law now or hereafter in effect, any right
to require the marshaling of assets of any of the Credit Parties and any other
entity or person primarily or secondarily liable with respect to any of the
Obligations, and all suretyship defenses generally. Each Credit Party hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment, or place or manner for payment, compromise, refinancing,
consolidation or renewals of any of the Obligations hereunder, the acceptance of
any partial payment thereon, any waiver, consent or other action or acquiescence
by the Administrative Agent or any Lender at any time or times in respect of any
default by any Credit Party in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement and the other Loan Documents,
any and all other indulgences whatsoever by the Administrative Agent or any
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of such Obligations or the addition, substitution or release,
in whole or in part, of any Credit Party or any other entity or person primarily
or secondarily liable for any Obligation. If for any reason any of the Credit
Parties has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from any of the Credit Parties by reason of such Credit Party's insolvency,
bankruptcy or reorganization or by other operation of law or for any reason,
this Agreement and the other Loan Documents shall nevertheless be binding on
each of the other Credit Parties to the same extent as if such Credit Party at
all times had been the sole obligor on such Obligations. The Obligations of
each Credit Party under this Section 5.8 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any reconstruction or
similar proceeding with respect to any Credit Party, the Administrative Agent or
any Lender.
(c) If at any time, any payment, or any part thereof, made in respect
of any of the Obligations, is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any of the Credit Parties, or otherwise, the
provisions of this Section 5.8 will forthwith be reinstated in effect as though
such payment had not been made.
(d) Until the payment and performance in full of all the Obligations,
none of the Credit Parties shall exercise and each hereby waives any rights
against the other Credit Parties as a result of payment by such Credit Party
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and none of the Credit Parties will prove any claim in competition
with the Administrative Agent or any Lender in respect of any payment hereunder
in bankruptcy, insolvency, or reorganization proceedings of any nature; none of
the Credit Parties will claim any set-off, recoupment or counterclaim against
any of the other Credit Parties in respect of any liability of one Credit Party
to another Credit Party. Each of the Credit Parties hereby agrees that the
payment of any amounts due with respect to any indebtedness owing by any of the
Credit Party to any other Credit Party is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Credit Party agrees that,
after the occurrence and during the continuance of any Default or Event of
Default hereunder, none of the Credit Parties will demand, ▇▇▇ for or otherwise
attempt to collect any indebtedness of any other Credit Party to such Credit
Party until all of the Obligations of the Credit Parties hereunder shall have
been paid in full in cash. If, notwithstanding the foregoing sentence, any
Credit Party shall collect, enforce or receive any amounts in respect of such
indebtedness in violation of the foregoing sentence while any Obligations of the
Credit Parties are still outstanding, such amounts shall be collected, enforced
and received by such Credit Party as trustee for the Administrative Agent and
the Lenders and be paid over to the Administrative Agent on account of the
Obligations without affecting in any manner the liability of such Credit Party
under the other provisions hereof.
SECTION 5.9 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect
to any Interest Period: (i) the Administrative Agent or any Lender (after
consultation with Administrative Agent) shall determine that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars, in the applicable amounts are not being quoted via Dow
▇▇▇▇▇ Market Screen 3750 (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative
33
Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) or offered to the
Administrative Agent or such Lender for such Interest Period; or (ii) the
Required Lenders reasonably determine (which determination shall be conclusive)
and notify the Administrative Agent that the LIBOR Rate will not adequately and
fairly reflect the cost to the Required Lenders of funding LIBOR Rate Loans for
such Interest Period; then the Administrative Agent shall forthwith give notice
thereof to the Borrower. Thereafter, until the Administrative Agent notifies
the Borrower that such circumstances no longer exist, the obligation of the
Lenders to make LIBOR Rate Loans and the right of the Borrower to convert any
Revolving Credit Loan to or continue any Revolving Credit Loan as a LIBOR Rate
Loan shall be suspended, and the Borrower shall repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such LIBOR Rate
Loan together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
issued after the date hereof of any such Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Revolving Credit Loan or continue any Revolving Credit
Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may
select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current
Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR
Rate Loan shall immediately be converted to a Base Rate Loan for the remainder
of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of,
or any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) issued after the date hereof
of such Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any
Revolving Credit Loan, Letter of Credit or Application or shall change the basis
of taxation of payments to any of the Lenders (or any of their respective
Lending Offices) of the principal of or interest on any Revolving Credit Loan,
Letter of Credit or Application or any other amounts due under this Agreement in
respect
35
thereof (except for changes in the rate of tax on the overall net income of any
of the Lenders or any of their respective Lending Offices imposed by the
jurisdiction in which such Lender is organized or is or should be qualified to
do business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Revolving Credit Loan; and the result of any of the foregoing is to increase the
costs to any of the Lenders of maintaining any LIBOR Rate Loan or issuing or
participating in Letters of Credit or to reduce the yield or amount of any sum
received or receivable by any of the Lenders under this Agreement or under any
other Loan Document in respect of a LIBOR Rate Loan or Letter of Credit or
Application, then such Lender may promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify the Borrower of such fact and
demand compensation therefor and, within fifteen (15) days after such notice by
the Administrative Agent, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or Lenders for such increased
cost or reduction. The Administrative Agent and the applicable Lender will
promptly notify the Borrower of any event of which it has knowledge which will
entitle such Lender to compensation pursuant to this Section 5.9(c); provided,
that the Administrative Agent shall incur no liability whatsoever to the Lenders
or the Borrower in the event it fails to do so. The amount of such compensation
shall be determined, in the applicable Lender's reasonable discretion, based
upon the assumption that such Lender funded its Revolving Credit Commitment
Percentage of the LIBOR Rate Loans in the London interbank market and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical; provided that no compensation shall be payable pursuant to the
above if the applicable Lender fails to demand compensation for such increased
costs within one-hundred eighty (180) days following the date on which such
Lender has actual knowledge of the event resulting in such increase. A
certificate of such Lender setting forth in reasonable detail the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
(d) Mitigation Obligations; Replacement of Lenders.
(i) If any Lender requests compensation under this
Section 5.9, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.12, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Revolving Credit Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (A) would eliminate or reduce amounts payable pursuant
to this Section 5.9 or Section 5.12, as the case may be, in the future and (B)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby
36
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(ii) If any Lender requests compensation under this
Section 5.9, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.12, or if any Lender defaults in its obligation to fund Revolving
Credit Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 14.10), all its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (A) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if an L/C Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(B) such Lender shall have received payment of an amount equal to the
outstanding principal of its Revolving Credit Loans and participations in
Letters of Credit, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (C) in the case of any such assignment resulting from a claim
for compensation under this Section 5.9, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
SECTION 5.10 Indemnity.
The Borrower hereby indemnifies each of the Lenders against any loss or
expense which may arise or be attributable to each Lender's obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any Revolving Credit Loan (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow on a
date specified therefor in a Notice of Revolving Credit Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss, cost or expense to any Lender shall be
deemed to equal an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of
such Loan had such event not occurred, at the LIBOR Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, covert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid, were it to bid, at the commencement of such period, for Dollar
deposits of a comparable amount and period from other banks in the London
interbank market; provided that no compensation shall be payable pursuant to the
above if the applicable Lender fails to demand compensation for such increased
costs within one-hundred eighty (180) days following the date on which such
Lender has actual knowledge of the event resulting in such increase. A
certificate of such Lender setting forth in reasonable detail the basis for
determining such amount or amounts necessary to compensate such Lender shall be
37
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 5.11 Capital Requirements.
If either (a) the introduction of, or any change in, or in the interpretation
of, any Applicable Law or (b) compliance with any guideline or request issued
after the date hereof from any central bank or comparable agency or other
Governmental Authority (whether or not having the force of law), has or would
have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to any Lender's Revolving Credit Commitment and other commitments of
this type, below the rate which the Lender or such other corporation could have
achieved but for such introduction, change or compliance, then within five (5)
Business Days after written demand by any such Lender, the Borrower shall pay to
such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction;
provided that no compensation shall be payable pursuant to the above if the
applicable Lender fails to demand compensation for such increased costs within
one-hundred eighty (180) days following the date on which such lender has actual
knowledge of the event resulting in such increase. A certificate of such Lender
setting forth in reasonable detail the basis for determining such amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.
SECTION 5.12 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Revolving Credit Notes or the Letters of Credit shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholding, and all liabilities
with respect thereto excluding, (i) in the case of each Lender and the
Administrative Agent, income and franchise taxes imposed on (or measured by) its
net income by the United States of America or by the jurisdiction under the laws
of which such Lender or the Administrative Agent (as the case may be) is
organized or its principal office is located or is or should be qualified to do
business or any political subdivision thereof, or in the case of any Lender, in
which its applicable Lending Office is located (provided, however, that no
Lender shall be deemed to be located in any jurisdiction solely as a result of
taking any action related to this Agreement or the Revolving Credit Notes or
Letters of Credit) and (ii) any branch profits tax imposed by the United States
of America or any similar tax imposed by any other jurisdiction described in
clause (i) above (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Revolving Credit Note or Letter of
Credit to any Lender or the Administrative Agent, (A) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
5.12) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the amount such party would have received had no such deductions
been made, (B) the Borrower shall make such deductions, (C) the Borrower shall
pay the full amount deducted to the relevant taxing authority or other authority
in accordance with applicable law,
38
and (D) the Borrower shall deliver to the Administrative Agent evidence of
such payment to the relevant taxing authority or other authority in the manner
provided in Section 5.12(d). The Borrower shall not, however, be required to
pay any amounts pursuant to clause (A) of the preceding sentence to any Foreign
Lender or the Administrative Agent not organized under the laws of the United
States of America or a state thereof (or the District of Columbia) if such
Foreign Lender or the Administrative Agent fails to comply with the requirements
of paragraph (e) of this Section 5.12 or Section 5.9(d), as the case may be.
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Revolving Credit Loans, the Letters of Credit, the other Loan Documents
(hereinafter referred to as "Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.12) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability prepared
by a Lender or the Administrative Agent, absent manifest error, shall be
conclusive, provided that if the Borrower reasonably believes that such Taxes or
Other Taxes were not correctly or legally asserted, such Lender or the
Administrative Agent (as the case may be) shall use reasonable efforts to
cooperate with the Borrower, at the Borrower's expense, to obtain a refund of
such Taxes or Other Taxes. Such indemnification shall be made within thirty
(30) days from the date such Lender or the Administrative Agent (as the case may
be) makes written demand therefor. If a Lender or the Administrative
Agent shall become aware that it is entitled to receive a refund in respect of
Taxes or Other Taxes, it promptly shall notify the Borrower of the availability
of such refund and shall, within sixty (60) days after receipt of a request by
the Borrower pursue or timely claim such refund at the Borrower's expense. If
any Lender or the Administrative Agent receives a refund in respect of any Taxes
or Other Taxes for which such Lender or the Administrative Agent has received
payment from the Borrower hereunder, it promptly shall repay such refund (plus
interest received, if any) to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
5.12 with respect to Taxes or Other Taxes giving rise to such refund), provided
that the Borrower, upon the request of such Lender or the Administrative Agent,
agrees to return such refund (plus any penalties, interest or other charges
required to be paid) to such Lender or the Administrative Agent in the event
such Lender or the Administrative Agent is required to repay such refund to the
relevant taxing authority.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 14.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
39
(e) Delivery of Tax Forms. Each Foreign Lender shall deliver to the
Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms W-8ECI or Forms
W-8BEN, as applicable (or successor forms) properly completed and certifying in
each case that such Foreign Lender is entitled to a complete exemption from
withholding or deduction for or on account of any United States federal income
taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding taxes. Each Foreign Lender further agrees to deliver
to the Borrower, with a copy to the Administrative Agent, a Form W-8BEN or
W-8ECI and Form W-8 or W-9, or successor applicable forms or manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower,
certifying in the case of a Form W-8BEN or W-8ECI that such Foreign Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes (unless in any such case
an event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or the exemption to which such
forms relate unavailable and such Foreign Lender notifies the Borrower and the
Administrative Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 5.12 shall survive the payment in full of the
Obligations and the termination of the Revolving Credit Commitment.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing.
The closing shall take place at the offices of Cravath, Swaine & ▇▇▇▇▇ at
10:00 a.m. on June 15, 1999 or at such other location, on such other date and
at such other time as the parties hereto shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Revolving Credit
Loans and Letters of Credit.
The obligation of the Lenders to close this Agreement and to make the initial
Revolving Credit Loans or issue the initial Letters of Credit is subject to the
satisfaction or waiver of each of the following conditions:
(a) Executed Loan Documents. This Agreement and the Revolving Credit
Notes (to the extent requested as provided herein) shall have been duly
authorized, executed and delivered to the Administrative Agent by the parties
thereto, shall be in full force and effect and no default
40
shall exist thereunder, and the Borrower shall have delivered original
counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers' Certificate of the Borrower. The
Administrative Agent shall have received a certificate from a Responsible
Officer, in form and substance reasonably satisfactory to the Administrative
Agent, to the effect that all representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are true, correct and
complete in all material respects; that the Borrower is not in violation of any
of the covenants contained in this Agreement and the other Loan Documents; that,
after giving effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing; and that each of the
closing conditions has been satisfied or waived (assuming satisfaction of the
Administrative Agent where not advised otherwise).
(ii) General Certificate of the Borrower. The
Administrative Agent shall have received a certificate of the secretary,
assistant secretary or general counsel of the Borrower certifying as to the
incumbency and genuineness of the signature of each officer of the Borrower
executing Loan Documents to which it is a party and certifying that attached
thereto is a true, correct and complete copy of (A) the articles of
incorporation of the Borrower and all amendments thereto, certified as of a
recent date by the appropriate Governmental Authority in its jurisdiction of
incorporation, (B) the bylaws of the Borrower as in effect on the date of such
certifications, (C) resolutions duly adopted by the Board of Directors of the
Borrower authorizing the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party, and (D) each certificate required to be delivered pursuant to
Section 6.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative
Agent shall have received long-form certificates as of a recent date of the good
standing of the Borrower under the laws of its jurisdiction of organization and
short-form certificates as of a recent date of the good standing of the Borrower
under the laws of each of California, Georgia, New York, North Carolina, Texas,
Tennessee and Virginia.
(iv) Opinions of Counsel. The Administrative Agent shall
have received favorable opinions of ▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel to the
Borrower, Cravath, Swaine & ▇▇▇▇▇, special counsel to the Borrower, and Mesirov,
Gelman, Jaffe, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Pennsylvania counsel to the Borrower,
addressed to the Administrative Agent and the Lenders with respect to the
Borrower, the Loan Documents and such other matters as the Lenders shall
reasonably request.
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. The
Borrower shall have obtained all material approvals, authorizations and consents
of any Person and of all Governmental Authorities and courts having jurisdiction
with respect to the transactions
41
contemplated by this Agreement and the other Loan Documents and as required in
connection with the Nine West Acquisition.
(ii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Administrative Agent
shall have received the audited Consolidated financial statements of ▇▇▇▇▇
Apparel Group and its Subsidiaries for the Fiscal Year ended on December 31,
1998, the unaudited financial statements of ▇▇▇▇▇ Apparel Group and its
Subsidiaries for the fiscal quarter ended on April 4, 1999 and the audited
financial statements of Nine West Group for the fiscal year ended on January 30,
1999.
(ii) Financial Condition Certificate. The Borrower shall
have delivered to the Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and certified by a
Responsible Officer, that (A) attached thereto is (I) a pro forma balance sheet
of
▇▇▇▇▇ Apparel Group and its Subsidiaries setting forth on a pro forma basis the
financial condition of ▇▇▇▇▇ Apparel Group and its Subsidiaries on a
Consolidated basis as of December 31, 1998, reflecting on a pro forma basis the
effect of the transactions contemplated herein and the Nine West Acquisition,
including all fees and expenses in connection therewith, and evidencing
compliance on a pro forma basis with the covenants contained in Article X hereof
and (II) a calculation of Estimated Net Worth and (B) the financial projections
(other than with respect to Nine West Group and its Subsidiaries, as to which
Borrower need not certify) previously delivered to the Administrative Agent were
prepared in good faith based upon assumptions believed to be reasonable at the
time.
(iii) Payment at Closing; Fee Letters. The Borrower shall
have paid the fees set forth or referenced in Section 5.3(c) and any other
accrued and unpaid fees or commissions due hereunder (including, without
limitation, reasonable legal fees and expenses) to the Administrative Agent and
Lenders, and to any other Person such amount as may be due thereto in connection
with the transactions contemplated hereby, including all taxes, fees and other
charges in connection with the execution, delivery, recording, filing and
registration of any of the Loan Documents. The Administrative Agent shall have
received duly authorized and executed copies of the fee letter agreement
referred to in Section 5.3(c).
(e) Miscellaneous.
(i) Closing of the Five-Year Credit Agreement. The
Five-Year Credit Agreement shall be closed contemporaneously with this Agreement
on terms and conditions set forth therein.
(ii) Closing of the Nine West Acquisition. The Nine West
Acquisition shall be closed contemporaneously with this Agreement on terms and
conditions set forth in the Nine West Acquisition Agreement.
42
(iii) Notice of Revolving Credit Borrowing. The
Administrative Agent shall have received a Notice of Revolving Credit Borrowing
from the Borrower in accordance with Section 2.2(a) and Section 4.2, and a
Notice of Account Designation specifying the account or accounts to which the
proceeds of any Revolving Credit Loans made after the Closing Date are to be
disbursed.
(iv) Proceedings and Documents. All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to the Lenders.
(v) Investment Policy. The Borrower shall have
delivered to the Administrative Agent a true and complete copy of the investment
policy referenced in Section 11.4(b) in form and content reasonably acceptable
to the Administrative Agent.
(f) Refinancing. On the Closing Date hereunder, (i) all outstanding
loans under the Prior Credit Agreements ("Existing Loans") shall be replaced by
Revolving Credit Loans hereunder and the Administrative Agent shall make such
transfers of funds as are necessary in order that the outstanding balance of
such Revolving Credit Loans, together with any Revolving Credit Loans funded on
the Closing Date, reflect the Revolving Credit Commitment of the Lenders
hereunder, (ii) all outstanding letters of credit issued pursuant to the Prior
Credit Agreements shall be deemed Letters of Credit hereunder and each Lender
shall purchase a participation therein pursuant to Section 3.4 in accordance
with its Revolving Credit Commitment Percentage, (iii) there shall have been
paid in cash in full all accrued but unpaid interest due on the Existing Loans
up to but excluding the Closing Date, (iv) there shall have been paid in cash in
full all accrued but unpaid fees due under the Prior Credit Agreements up to but
excluding the Closing Date and all other amounts, costs and expenses then owing
to any of the Prior Lenders and/or any Agent, as agent under the Prior Credit
Agreements, in each case to the satisfaction of such Agent or Prior Lender, as
the case may be, regardless of whether or not such amounts would otherwise be
due and payable at such time pursuant to the terms of the Prior Credit
Agreements, (v) all outstanding promissory notes issued by the Borrower to the
Prior Lenders under the Prior Credit Agreements shall be deemed canceled and the
originally executed copies thereof shall be canceled and promptly returned to
the Administrative Agent who shall promptly forward such notes to the Borrower
and (vi) the commitments and, except as expressly set forth in the Prior Credit
Agreements, other obligations and rights of the Borrower and the Prior Lenders
shall be terminated without any further action hereunder or thereunder.
SECTION 6.3 Conditions to All Extensions of Credit.
The obligations of the Lenders to make any Extensions of Credit are subject to
the satisfaction of the following conditions precedent on the relevant borrowing
or issue date, as applicable:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VII shall be true and
correct on and as of such borrowing or issuance date with the same effect as if
made on and as of such date; except for any representation and warranty made as
of an earlier date, which representation and warranty shall remain true and
correct as of such earlier date.
43
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Revolving Credit Loan or after giving effect to the Revolving Credit Loans
to be made on such date or (ii) on the issue, extension or renewal date with
respect to such Letter of Credit or after giving effect to such Letter of Credit
on such date.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES
SECTION 7.1 Representations and Warranties.
To induce the Administrative Agent and Lenders to enter into this Agreement
and to induce the Lenders to make Extensions of Credit, the Credit Parties
hereby represent and warrant to the Administrative Agent and Lenders that:
(a) Organization; Power; Qualification. Each of the Credit Parties and
their Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, has the
power and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification and
authorization, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(b) Ownership. Each Subsidiary of each of the Credit Parties as of the
Closing Date is listed on Schedule 7.1(b). As of the Closing Date, the
capitalization of the Credit Parties and their Subsidiaries consists of the
number of shares, authorized, issued and outstanding, of such classes and
series, with or without par value, described on Schedule 7.1(b). As of the
Closing Date, all outstanding shares have been duly authorized and validly
issued and are fully paid and nonassessable. The shareholders of the
Subsidiaries of the Credit Parties and the number of shares owned by each as of
the Closing Date are described on Schedule 7.1(b). As of the Closing Date,
there are no outstanding stock purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Credit Parties or their Subsidiaries, except as
described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Credit Parties and, if applicable, their Subsidiaries has the right, power
and authority and has taken all necessary corporate and other action to
authorize the execution, delivery and performance of each of the Loan Documents
to which it is a party in accordance with their respective terms. Each of the
Loan Documents have been duly executed and delivered by the duly authorized
officers of the Credit Parties and each of their Subsidiaries party thereto, as
applicable, and each such document constitutes the legal, valid and binding
obligation of the Credit Parties and, if applicable, each of their Subsidiaries
party thereto, enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
44
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Credit Parties and their
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any of the Credit Parties or any
of their Subsidiaries to obtain any Governmental Approval not otherwise already
obtained or violate any Applicable Law relating to the Credit Parties or any of
their Subsidiaries, (ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation, bylaws or other organizational
documents of the Credit Parties or any of their Subsidiaries or any indenture or
other material agreement or instrument to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval relating
to such Person except as could not reasonably be expected to have a Material
Adverse Effect, or (iii) result in or require the creation or imposition of any
material Lien upon or with respect to any property now owned or hereafter
acquired by such Person.
(e) Compliance with Law; Governmental Approvals. Other than with
respect to environmental matters, which are treated exclusively in Section
7.1(h) hereof, each of the Credit Parties and their Subsidiaries (i) has all
Governmental Approvals required by any Applicable Law for it to conduct its
business, each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or, to the best of its
knowledge, threatened attack by direct or collateral proceeding, and (ii) is in
compliance with each Governmental Approval applicable to it and in compliance
with all other Applicable Laws relating to it or any of its respective
properties; in each case, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Credit Parties and their
Subsidiaries has timely filed or caused to be timely filed all federal and
state, local and other tax returns required by Applicable Law to be filed, and
has paid, or made adequate provision for the payment of, all federal and state,
local and other taxes, assessments and governmental charges or levies upon it
and its property, income, profits and assets which are due and payable, except
(a) taxes that are being contested in good faith by appropriate proceedings and
for which such Credit Party or Subsidiary, as applicable, has set aside on its
books adequate reserves or (b) to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No Governmental
Authority has asserted any material Lien or other claim against the Credit
Parties or any Subsidiary thereof with respect to unpaid taxes (except for taxes
not yet due) which has not been discharged or resolved.
(g) Intellectual Property Matters. Each of the Credit Parties and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect. No event has occurred which, to the
knowledge of the Credit Parties, permits, or
45
after notice or lapse of time or both would permit, the revocation or
termination of any such rights, and, to the knowledge of the Credit Parties,
neither the Credit Parties nor any Subsidiary thereof is liable to any Person
for infringement under Applicable Law with respect to any such rights as a
result of its business operations, except as could not reasonably be expected to
have a Material Adverse Effect.
(h) Environmental Matters. Except as could not reasonably be expected
to have a Material Adverse Effect:
(i) The properties of the Credit Parties and their
Subsidiaries do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws;
(ii) The properties of the Credit Parties and their
Subsidiaries and all operations conducted in connection therewith are in
compliance, and have been in compliance, with all applicable Environmental Laws,
and there are no Hazardous Materials at, under or about such properties or such
operations in amounts or concentrations which could reasonably be expected to
interfere with the continued operation of such properties;
(iii) Neither any of the Credit Parties nor any Subsidiary
thereof has received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws, nor does any of the Credit Parties or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) To the knowledge of the Credit Parties, Hazardous
Materials have not been transported or disposed of from the properties of the
Credit Parties or any of their Subsidiaries in violation of, or in a manner or
to a location which could reasonably be expected to give rise to liability
under, Environmental Laws, nor, to the knowledge of the Credit Parties, have any
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of such properties in violation of, or in a manner which could
reasonably be expected to give rise to liability under, any Environmental Laws;
(v) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the Credit Parties,
threatened, under any Environmental Law to which any of the Credit Parties or
any Subsidiary thereof will be named as a party, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the properties or operations of the Credit
Parties and their Subsidiaries; and
(vi) To the knowledge of the Credit Parties, there has
been no release, or to the best of the Credit Parties' knowledge, the threat of
release, of Hazardous Materials at or from the properties of the Credit Parties
or any of their Subsidiaries, in violation of or in amounts or in a manner that
could reasonably be expected to give rise to liability under Environmental Laws.
46
(i) ERISA.
(i) Each of the Credit Parties and each ERISA Affiliate
is in compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans
except where any such non-compliance could not reasonably be expected to have a
Material Adverse Effect. Except for any failure that would not reasonably be
expected to have a Material Adverse Effect, each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has been determined by
the Internal Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the Code. No
liability that could reasonably be expected to result in a Material Adverse
Effect has been incurred by the Credit Parties or any ERISA Affiliate which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(ii) No accumulated funding deficiency (as defined in
Section 412 of the Code) has been incurred (without regard to any waiver granted
under Section 412 of the Code), nor has any funding waiver from the Internal
Revenue Service been received or requested with respect to any Pension Plan;
(iii) Neither the Credit Parties nor any ERISA Affiliate
has: (A) engaged in a nonexempt prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC
which remains outstanding other than the payment of premiums and there are no
premium payments which are due and unpaid, (C) failed to make a required
contribu ion or payment to a Multiemployer Plan, or (D) failed to make a
required installment or other required payment under Section 412 of the Code
except where any of the foregoing individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect;
(iv) No Termination Event that could reasonably be
expected to result in a Material Adverse Effect has occurred or is reasonably
expected to occur; and
(v) No proceeding, claim, lawsuit and/or investigation
is existing or, to the knowledge of the Credit Parties, threatened concerning or
involving any Employee Benefit Plan that could reasonably be expected to result
in a Material Adverse Effect.
(j) Margin Stock. Neither the Credit Parties nor any Subsidiary
thereof is engaged principally or as one of its activities in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" (as each such term is defined or used in Regulation U of the Board of
Governors of the Federal Reserve System). No part of the proceeds of any of the
Revolving Credit Loans or Letters of Credit will be used for purchasing or
carrying margin stock, unless the Credit Parties shall have given the
Administrative Agent and Lenders prior notice of such event and such other
information as is reasonably necessary to permit the Administrative Agent and
Lenders to comply, in a timely fashion, with all reporting obligations required
by Applicable Law, or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors.
47
(k) Government Regulation. Neither the Credit Parties nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither the Credit Parties nor any
Subsidiary thereof is, or after giving effect to any Extension of Credit will
be, subject to regulation under the Public Utility Holding Company Act of 1935
or the Interstate Commerce Act, each as amended.
(l) Burdensome Provisions. Neither the Credit Parties nor any
Subsidiary thereof is a party to any indenture, agreement, lease or other
instrument, or subject to any corporate or partnership restriction, Governmental
Approval or Applicable Law which is so unusual or burdensome as in the
foreseeable future could be reasonably expected to have a Material Adverse
Effect. The Credit Parties and their Subsidiaries do not presently anticipate
that future expenditures needed to meet the provisions of any statutes, orders,
rules or regulations of a Governmental Authority will be so burdensome as to
have a Material Adverse Effect.
(m) Financial Statements. The (i) Consolidated balance sheets of ▇▇▇▇▇
Apparel Group (excluding New Nine West Group and its Subsidiaries) and its
Subsidiaries as of December 31, 1998, and the related statements of income,
stockholders' equity and cash flows for the Fiscal Years then ended and (ii)
unaudited Consolidated balance sheet of ▇▇▇▇▇ Apparel Group (excluding New Nine
West Group and its Subsidiaries) and its Subsidiaries as of April 4, 1999, and
related unaudited interim statements of income, stockholders' equity and cash
flows, copies of which have been furnished to the Administrative Agent and each
Lender, are complete in all material respects and fairly present in all material
respects the assets, liabilities and financial position of ▇▇▇▇▇ Apparel Group
and its Subsidiaries (excluding New Nine West Group) as at such dates, and the
results of the operations and changes of financial position for the periods then
ended, subject to normal year end adjustments. All such financial statements,
including the related notes thereto, have been prepared in accordance with GAAP.
(n) No Material Adverse Change. Since the later to occur of (i) April
4, 1999 or (ii) the date of the most recently delivered audited financial
statements of ▇▇▇▇▇ Apparel Group and its Subsidiaries, there has been no
Material Adverse Effect.
(o) Liens. None of the properties and assets of the Credit Parties or
any Subsidiary thereof is subject to any Lien, except Liens permitted pursuant
to Section 11.3.
(p) Debt and Guaranty Obligations. Schedule 7.1(p) is a complete and
correct listing of all Debt and Guaranty Obligations of the Credit Parties and
their Subsidiaries as of the Closing Date in excess of $5,000,000.
(q) Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 7.1(q), there are no actions, suits or proceedings pending
nor, to the knowledge of the Credit Parties, threatened against or affecting the
Credit Parties or any Subsidiary thereof or any of their respective properties
in any court or before any arbitrator of any kind or before or by any
Governmental Authority, which could reasonably be expected to have a Material
Adverse Effect or which relate to the enforceability of any Loan Documents.
48
(r) Absence of Defaults. To the knowledge of the Credit Parties, no
event has occurred or is continuing which constitutes a Default or an Event of
Default.
(s) Accuracy and Completeness of Information. The Credit Parties have
disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which they or any of their Subsidiaries are subject, and all
other matters known to them, that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The written
information, taken as a whole, furnished by or on behalf of the Credit Parties
to the Administrative Agent or any Lender (other than with respect to Nine West
Group and any of its Subsidiaries and Affiliates) in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) does not contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Credit Parties represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
(t) Year 2000 Compliance. The Credit Parties (i) have initiated a
review and assessment of all areas within their and each of their Subsidiaries'
material business and operations that could reasonably be adversely affected by
the "Year 2000 Problem" (that is, the risk that computer applications used by
the Credit Parties or any of their Subsidiaries (or limited to the Credit
Parties' inquiries, those disclosed by their suppliers, vendors and customers as
being in use) may be unable to recognize and perform properly date-sensitive
functions involving certain dates before, on and any date after December 31,
1999), (ii) have developed a plan, strategy or other approach for addressing the
Year 2000 Problem on a timely basis, and (iii) is in the process of implementing
that plan, strategy or other approach. Based on the foregoing and upon the
Credit Parties' reliance on (i) any Year 2000 consulting services, study, report
or any other information performed or provided by any Person other than the
Credit Parties or any of their Subsidiaries and (ii) any certification or
assurance of Year 2000 compliance provided by any vendor, supplier, servicer,
manufacturer, customer or other provider of any hardware or software product or
other computer applications installed at the Credit Parties or any of their
Subsidiaries, the Credit Parties believe, as of the Closing Date, that all
computer applications (including, limited to the Credit Parties' inquiries,
those disclosed by their suppliers, vendors and customers) that are material to
their or any of their Subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before, on and after January 1, 2000 (that is, be "Year
2000 compliant"), except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.2 Survival of Representations and Warranties, Etc.
All representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and
49
delivery of this Agreement, any investigation made by or on behalf of the
Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations (other than Obligations under Hedging Agreements)
have been paid and satisfied in full and the Revolving Credit Commitment
terminated, unless consent has been obtained in the manner set forth in Section
14.11 hereof, the Credit Parties will furnish or cause to be furnished to the
Administrative Agent and to the Lenders at their respective addresses as set
forth on Schedule 1.1(a), or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of the first three fiscal
quarters of each Fiscal Year, an unaudited Consolidated balance sheet of ▇▇▇▇▇
Apparel Group and its Subsidiaries as of the close of such fiscal quarter and
unaudited Consolidated statements of income, stockholders' equity and cash flows
for the fiscal quarter then ended and that portion of the Fiscal Year then
ended, including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
preceding Fiscal Year and prepared by ▇▇▇▇▇ Apparel Group in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by a Responsible
Officer to present fairly in all material respects the financial condition of
▇▇▇▇▇ Apparel Group and its Subsidiaries as of their respective dates and the
results of operations of ▇▇▇▇▇ Apparel Group and its Subsidiaries for the
respective periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of ▇▇▇▇▇ Apparel Group and its Subsidiaries as of the
close of such Fiscal Year and audited Consolidated statements of income,
stockholders' equity and cash flows for the Fiscal Year then ended, including
the notes thereto, all in reasonable detail setting forth in comparative form
the corresponding figures for the preceding Fiscal Year and prepared by a
nationally recognized independent certified public accounting firm in accordance
with GAAP and, if applicable, containing disclosure of the effect on the
financial position or results of operation of any change in the application of
accounting principles and practices during the year, and accompanied by a report
thereon by such certified public accountants that is not qualified with respect
to scope limitations imposed by ▇▇▇▇▇ Apparel Group or any of its Subsidiaries
or with respect to accounting principles followed by ▇▇▇▇▇ Apparel Group or any
of its Subsidiaries not in accordance with GAAP.
50
SECTION 8.2 Officer's Compliance Certificate.
At each time financial statements are delivered pursuant to Section 8.1 (a)
or (b) a certificate of a Responsible Officer in the form of Exhibit F attached
hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate.
At each time financial statements are delivered pursuant to Section 8.1(b), a
certificate of the independent public accountants certifying such financial
statements addressed to the Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Credit Parties and their Subsidiaries are in
compliance with the financial covenants set forth in Article X hereof as at the
end of each respective period.
SECTION 8.4 Other Reports.
(a) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by the Credit
Parties or any or their Subsidiaries with the Securities and Exchange Commission
and required by the Securities and Exchange Commission to be delivered to the
shareholders of the Credit Parties or any or their Subsidiaries, (ii) each
report made by the Credit Parties or any of their Subsidiaries to the Securities
and Exchange Commission on Form 8-K and (iii) each final registration statement
of the Credit Parties or any of their Subsidiaries filed with the Securities and
Exchange Commission, except in connection with pension plans and other employee
benefit plans; and
(b) Such other information regarding the operations, business affairs
and financial condition of the Credit Parties or any of their Subsidiaries as
the Administrative Agent or any Lender may reasonably request.
SECTION 8.5 Notice of Litigation and Other Matters.
Prompt (but in no event later than ten (10) Business Days after a principal
officer of the Credit Parties obtains knowledge thereof) telephonic (confirmed
in writing) or written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Credit Parties or any Subsidiary
thereof or any of their respective properties, assets or businesses which in the
reasonable judgment of the Credit Parties could reasonably be expected to have a
Material Adverse Effect;
(b) any notice of any violation received by the Credit Parties or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation
51
of Environmental Laws, which in the reasonable judgment of the Credit Parties in
any such case could reasonably be expected to have a Material Adverse Effect;
(c) any Default or Event of Default; and
(d) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof) which could reasonably be
expected to have a Material Adverse Effect, (ii) all notices received by the
Credit Parties or any ERISA Affiliate of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension Plan,
(iii) all notices received by the Credit Parties or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA which could reasonably have a
Material Adverse Effect and (iv) the Credit Parties obtaining knowledge or
reason to know that the Credit Parties or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any Pension Plan under a
distress termination within the meaning of Section 4041(c) of ERISA.
SECTION 8.6 Accuracy of Information.
All written information, reports, statements and other papers and data
furnished by or on behalf of the Credit Parties to the Administrative Agent or
any Lender (other than financial forecasts) whether pursuant to this Article
VIII or any other provision of this Agreement, shall be, at the time the same is
so furnished, true and complete in all material respects.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations (other than any Obligations under any Hedging
Agreement) have been paid and satisfied in full and the Revolving Credit
Commitment terminated, unless consent has been obtained in the manner provided
for in Section 14.11, the Credit Parties will, and will cause each of their
Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.5, preserve and maintain its
separate corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable Law
in which the failure to so qualify would have a Material Adverse Effect.
SECTION 9.2 Maintenance of Property.
Protect and preserve all properties useful in and material to its business,
including copyrights, patents, trade names and trademarks; maintain in good
working order and condition all buildings, equipment and other tangible real and
personal property material to the conduct of its business, ordinary wear and
tear excepted; and from time to time make or cause to be made all renewals,
replacements and additions to such
52
property necessary for the conduct of its business, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times.
SECTION 9.3 Insurance.
Maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as are customarily maintained by similar
businesses and as may be required by Applicable Law.
SECTION 9.4 Accounting Methods and Financial Records.
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete in all material respects) as may be required
or as may be necessary to permit the preparation of financial statements in
accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.
SECTION 9.5 Payment and Performance of Obligations.
Pay and perform all Obligations under this Agreement and the other Loan
Documents, and pay (a) all material taxes, assessments and other governmental
charges that may be levied or assessed upon it or any of its property, and (b)
all other material indebtedness, obligations and liabilities in accordance with
customary trade practices; provided, that the Credit Parties or such Subsidiary
may contest any item described in clause (a) or (b) of this Section 9.5 in good
faith so long as adequate reserves are maintained with respect thereto to the
extent required by GAAP. It is expected that all payments in respect of the
Obligations, the Existing Debt Securities and the Additional Debt Securities
will be made by the Borrower.
SECTION 9.6 Compliance With Laws and Approvals.
Observe and remain in compliance with all Applicable Laws and maintain in full
force and effect all Governmental Approvals, in each case applicable to the
conduct of its business except where the failure to observe or comply could not
reasonably be expected to have a Material Adverse Effect.
SECTION 9.7 Environmental Laws.
In addition to and without limiting the generality of Section 9.6, (a) comply
with, and use best efforts to ensure such compliance by all tenants and
subtenants with all applicable Environmental Laws and obtain and comply with and
maintain, and use its best efforts to ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except where the failure to comply could not reasonably have a Material
Adverse Effect, (b) conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives of
any Governmental Authority regarding Environmental Laws except (i) where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect or (ii) to the extent the Credit Parties or any of their Subsidiaries are
contesting, in good faith, any such requirement, order or directive before the
appropriate Governmental Authority so long as adequate reserves are maintained
with respect thereto to the extent required by GAAP, and (c) defend, indemnify
and hold harmless the Administrative Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance
53
with or liability under any Environmental Laws applicable to the operations of
the Credit Parties or such Subsidiaries, or any orders, requirements or demands
of Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 9.8 Compliance with ERISA.
In addition to and without limiting the generality of Section 9.6, (a) comply
with all applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans,
except where the failure to comply could not reasonably be expected to have a
Material Adverse Effect, (b) not take any action or fail to take action the
result of which would result in a liability to the PBGC or to a Multiemployer
Plan in an amount that could reasonably be expected to have a Material Adverse
Effect, and (c) furnish to the Administrative Agent upon the Administrative
Agent's request such additional information about any Employee Benefit Plan
concerning compliance with this covenant as may be reasonably requested by the
Administrative Agent.
SECTION 9.9 Conduct of Business.
Engage only in businesses in substantially the same fields as the businesses
conducted on the Closing Date (including, without limitation, the apparel and/or
footwear industry generally) and in lines of business reasonably related thereto
(collectively, "Permitted Lines of Business"), or as otherwise permitted
pursuant to the terms of this Agreement.
SECTION 9.10 Visits and Inspections.
Permit representatives of the Administrative Agent or any Lender, from time to
time upon reasonable prior notice to visit and inspect its properties; inspect
and make extracts from its books, records and files, including, but not limited
to, management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
SECTION 9.11 Use of Proceeds.
The Credit Parties shall use the proceeds of the Revolving Credit Loans to (a)
refinance certain existing Debt, (b) for working capital and general corporate
purposes of the Credit Parties and their Subsidiaries, including acquisitions
and stock repurchases and (c) the payment of certain fees and expenses incurred
in connection with the transactions contemplated hereby or thereby.
SECTION 9.12 Year 2000 Compatibility.
Take all actions reasonably necessary to assure that the Credit Parties'
computer based systems are able to operate and effectively process data which
includes dates before, on and after January 1, 2000. At the request of the
Administrative Agent or any Lender, the Credit Parties shall provide information
to the Administrative Agent concerning the Credit Parties' Year 2000
compatibility.
54
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations (other than any Obligations under any Hedging
Agreement) have been paid and satisfied in full and the Revolving Credit
Commitment terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof, the Credit Parties and their Subsidiaries on a
Consolidated basis will not:
SECTION 10.1 Interest Coverage Ratio:
As of the end of any fiscal quarter, permit the ratio (the "Interest Coverage
Ratio") of (a) EBITDAR for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date to (b) the sum of (i) Interest
Expense paid or payable in cash and (ii) Rental Expense, both for the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such
date, to be less than (i) 2.0 to 1.0 for the period from the Closing Date
through and including the fiscal quarter ending closest to September 30, 2000;
(ii) 2.25 to 1.0 thereafter for the period through and including the end of the
fiscal quarter ending closest to September 30, 2001; (iii) 2.5 to 1.0 thereafter
for the period through and including the fiscal quarter ending closest to
September 30, 2002; and (iv) 2.75 to 1.0 for all times thereafter; provided
that (x) for the fiscal quarter ending October 3, 1999, the Interest Coverage
Ratio shall be determined solely on the basis of the single fiscal quarter
immediately preceding such date, (y) for the fiscal quarter ending December 31,
1999, the Interest Coverage Ratio shall be determined solely on the basis of the
two (2) consecutive fiscal quarters immediately preceding such date and (z) for
the fiscal quarter ending April 2, 2000, the Interest Coverage Ratio shall be
determined solely on the basis of the three (3) consecutive fiscal quarters
immediately preceding such date.
SECTION 10.2 Minimum Net Worth:
As of the end of any fiscal quarter, permit Consolidated Net Worth to be less
than eighty percent (80%) of Estimated Net Worth as set forth on the Financial
Conditions Certificate provided pursuant to Section 6.2(d)(ii).
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations (other than any Obligations under any Hedging
Agreement) have been paid and satisfied in full and the Revolving Credit
Commitment has expired or been terminated, unless consent has been obtained in
the manner set forth in Section 14.11 hereof, the Credit Parties will not and
will not permit any of their Subsidiaries to:
SECTION 11.1 Limitations on Debt and Guaranty Obligations.
Create, incur, assume or suffer to exist any Debt, including Guaranty
Obligations, except:
(a) the Obligations of the Credit Parties;
55
(b) the Five-Year Credit Agreement Obligations;
(c) Debt existing on the Closing Date (other than the Five-Year Credit
Agreement Obligations, the Outstanding Nine West Debt Obligations and the
Existing Nine West Accounts Receivable Facility), including the Debt as set
forth on Schedule 7.1(p);
(d) Debt in the form of additional credit facilities of the Credit
Parties or their Subsidiaries for borrowings denominated in currencies other
than Dollars; provided that the equivalent Dollar Amount of the aggregate
commitment thereunder does not exceed $50,000,000 on any date of determination;
(e) Debt of the Credit Parties and their Subsidiaries, not otherwise
permitted under this Section 11.1, incurred in connection with (i) Capitalized
Leases, (ii) purchase money Debt, (iii) Debt of a Subsidiary incurred and
outstanding on or prior to the date on which such Subsidiary was acquired by any
Credit Party or otherwise became a Subsidiary of such Credit Party (other than
Debt incurred as consideration in, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
transactions pursuant to which such Subsidiary became a Subsidiary of such
Credit Party or was otherwise acquired by such Credit Party) and (iv) any other
unsecured Debt of the Subsidiaries of the Credit Parties in an aggregate
outstanding amount (excluding any attributable Debt from the contemplated sale
leaseback transaction involving the Credit Parties' distribution warehouse at
South ▇▇▇▇, ▇▇▇▇▇▇▇▇) not to exceed fifteen percent (15%) of Consolidated Net
Worth of the Credit Parties and their Subsidiaries on any date of determination;
(f) additional Debt of the Credit Parties, not otherwise permitted
under this Section 11.1, arising under or in connection with public or privately
placed notes, debentures, bonds, or debt securities or related indentures or
other agreements (the "Additional Debt Securities") so long as no Default or
Event of Default exists on the date any such Additional Debt Security is created
or arises as a result of any borrowing thereunder, except in connection with the
issuance of exchange securities in connection with any exchange offer registered
under the Securities Act of 1933, as amended, following a private placement of
Additional Debt Securities;
(g) other Debt of the Credit Parties, not otherwise permitted under
this Section 11.1, in an aggregate outstanding amount not to exceed $300,000,000
on any date of determination;
(h) Debt of the Credit Parties to any Subsidiary or any other Credit
Party and of any Subsidiary to the Credit Parties or any other Subsidiary;
(i) the Outstanding Nine West Debt Obligations, in each case, existing
on the date hereof;
(j) Debt incurred in respect of the extension, renewal, refinancing,
replacement or refunding (collectively, the "refinancing") of Debt incurred
pursuant to clause (a), (b), (c), (e) or (i); provided, that (i) such Debt is an
aggregate principal amount (or if incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (x) the aggregate principal
56
amount (or if incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being refinanced and (y) an amount necessary
to pay any fees and expenses, including premiums and defeasance costs, related
to such refinancing, (ii) the average life of such Debt is equal to or greater
than the average life of the Debt being refinanced, (iii) the stated maturity of
such Debt is no earlier than the stated maturity of the Debt being refinanced;
and (iv) the new Debt shall not be senior in right of payment to the Debt that
is being refinanced; and
(k) the Existing Nine West Accounts Receivable Facility and any
refinancing thereof; provided, that none of the Debt permitted to be incurred
by this Section shall expressly restrict, limit or otherwise encumber (unless
such restriction, limitation or other encumbrance is a Permitted Encumbrance
(as defined below)), the ability of any Subsidiary of the Credit Parties to
make any payment to the Credit Parties or any of their Subsidiaries (in the
form of dividends, intercompany advances or otherwise) for the purpose of
enabling the Credit Parties to pay the Obligations. For purposes of this
Section 11.1, with regard to any Debt, a "Permitted Encumbrance" shall mean
any restriction, limitation or other encumbrance that applies solely if a
default or event of default (other than a default resulting solely from the
breach of a representation or warranty) occurs and is continuing under such
Debt; provided further that, with respect to any default or event of default
(other than a payment default, including as a result of acceleration, or a
bankruptcy event with respect to the obligor of such Debt), such encumbrance
or restriction may not prohibit dividends to the Credit Parties or any
Subsidiary hereof to pay the Obligations for more than one hundred eighty
(180) days in any consecutive three hundred sixty (360) day period.
Notwithstanding the foregoing, the limitation set forth in this paragraph
shall not be applicable to the Outstanding Nine West Debt Obligations
until the date that is ninety-one (91) days after the Closing Date.
SECTION 11.2 [Reserved].
SECTION 11.3 Limitations on Liens.
Create, incur, assume or suffer to exist, any Lien on or with respect to any
of its assets or properties (including without limitation shares of capital
stock or other ownership interests), real or personal, whether now owned or
hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace, if any,
related thereto has not expired or which are being contested in good faith and
by appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
57
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which do not, in any case, materially detract from the value of such
property or materially impair the use thereof in the ordinary conduct of
business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens incurred in the ordinary course of business securing Debt of
the Credit Parties permitted under Section 11.1 not to exceed $75,000,000 in the
aggregate outstanding in addition to Liens existing on the Closing Date;
(g) Liens existing on any property or asset prior to the acquisition
thereof by the Credit Parties or any Subsidiary or existing on any property or
asset of any Person that becomes a Subsidiary or is merged with or into the
Credit Parties or any Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary or is so merged;
(h) Liens in existence on the Closing Date (other than those relating
to the Existing Nine West Accounts Receivable Facility) and described on
Schedule 11.3;
(i) Liens securing Debt incurred in connection with Capitalized Leases
and purchase money Debt permitted under Section 11.1(e); provided that (i) such
Liens shall be created substantially simultaneously with the acquisition of the
related asset, (ii) such Liens do not at any time encumber any property other
than the property financed by such Debt, (iii) the amount of Debt secured
thereby is not increased and (iv) the principal amount of Debt secured by any
such Lien shall at no time exceed one hundred percent (100%) of the original
purchase price of such property at the time it was acquired;
(j) Liens incurred to secure appeal bonds and judgment and attachment
Liens in respect of judgments or orders that do not constitute an Event of
Default under Section 12.1(m);
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar rights and
remedies, in each case as to deposit accounts or other funds maintained with a
creditor depository institution;
(l) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(m) Liens arising in the ordinary course of business that do not secure
monetary obligations;
58
(n) Liens arising by the terms of letters of credit entered into in the
ordinary course of business to secure reimbursement obligations thereunder;
(o) Liens securing Debt or other obligations between the Credit Parties
and a Subsidiary or between Subsidiaries or Credit Parties;
(p) Liens granted to any bank or other institution securing the
payments to be made to such bank or other institution by the Credit Parties or a
Subsidiary of the Credit Parties pursuant to any Hedging Agreement; provided
that, such agreements are entered into in, or are incidental to, the ordinary
course of business;
(q) Liens on accounts receivable granted in connection with the
Existing Nine West Accounts Receivable Facility and refinancings thereof; and
(r) the refinancing of any Lien referred to in clause (g), (h), (i) or
(p); provided that, the principal amount of Debt (or, if incurred with original
issue discount, an aggregate issue price) secured thereby and not otherwise
authorized by clause (g), (h), (i) or (p) shall not exceed the principal amount
of Debt (or if incurred without original issue discount, the aggregate accreted
value) plus any fees and expenses, including premiums and defeasance costs,
payable in connection with any such extension, renewal, replacement or
refunding, so secured at the time of such extension, renewal, replacement or
refunding.
SECTION 11.4 Limitations on Loans, Advances, Investments and Acquisitions.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock (other than capital stock of the Credit Parties), interests in any
partnership, limited liability company or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person, or enter into, directly or indirectly, any commitment
or option in respect of the foregoing (collectively, "Investments") except:
(a) Investments in Subsidiaries existing on the Closing Date and the
other existing loans, advances and Investments described on Schedule 11.4;
(b) Investments made in accordance with the investment policy of the
Credit Parties, provided that any material amendment or other material
modification to such policy shall have been approved by the Administrative Agent
and determined to be acceptable in its reasonable discretion;
(c) Investments by the Credit Parties or any Subsidiary in the form of
acquisitions, including acquisitions of all or substantially all of the business
or a line of business (whether by the acquisition of capital stock, assets or
any combination thereof) of any other Person, so long as (i) a Responsible
Officer certifies to the Administrative Agent and the Required Lenders that no
Default or Event of Default has occurred and is continuing or would result from
the closing of such acquisition, such certification to include, for any
acquisition involving a purchase price in
59
excess of $50,000,000, either individually or in an series of related
transactions, a financial condition certificate in the form required under
Section 6.2(d)(ii)(A), and (ii) such acquisition meets either of the following
requirements: (A) such acquisition is within a Permitted Line of Business, or
(B) such acquisition is outside a Permitted Line of Business but the price for
such acquisition, together with all other acquisitions outside the Permitted
Lines of Business, does not exceed $50,000,000 in the aggregate;
(d) the Nine West Acquisition;
(e) Investments (other than acquisitions) in the Permitted Lines of
Business;
(f) Investments (other than acquisitions) outside Permitted Lines of
Business not in excess of $50,000,000 in the aggregate;
(g) loans and advances to third party contractors in the ordinary
course of business and consistent with past practice not to exceed in an
aggregate outstanding amount $6,000,000 (excluding such loans and advances
consisting of prepayments or advances for inventory or services); and loans and
advances to employees of the Credit Parties and their Subsidiaries in an
aggregate outstanding amount not to exceed $4,000,000; and
(h) intercompany loans and advances among the Credit Parties and their
Subsidiaries so long as permitted under the terms of Sections 11.1 and 11.3.
SECTION 11.5 Limitations on Mergers and Liquidation.
Merge, consolidate or enter into any similar combination with any other Person
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except so long as no Default or Event of Default has occurred and
is continuing, or would result therefrom:
(a) any Credit Party may merge with or into any Person; provided that
(i) such Credit Party shall be the survivor of such merger or (ii) the survivor
assumes and succeeds to the Obligations of such Credit Party pursuant to an
assumption agreement in form reasonably satisfactory to the Administrative Agent
and the Required Lenders;
(b) any Wholly-Owned Subsidiary of the Credit Parties may merge with or
into any other Wholly-Owned Subsidiary of the Credit Parties;
(c) any Wholly-Owned Subsidiary may merge with or into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 11.4(b), (c) or (d);
(d) any Wholly-Owned Subsidiary of the Credit Parties may merge with or
into any Credit Party; provided that, such Credit Party is the survivor of such
merger; and
(e) any Credit Party may merge with or into any other Credit Party.
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SECTION 11.6 Limitations on Sale or Transfer of Assets.
Convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets, whether now owned or hereafter acquired
(collectively, "sale"), except for the following:
(a) the sale of inventory or the factoring of accounts receivable in
the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of the Credit Parties or any of their Subsidiaries;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(d) the sale of assets between the Credit Parties and any Subsidiary or
between Subsidiaries or Credit Parties;
(e) the sale of accounts receivable in connection with the Existing
Nine West Accounts Receivable Facility and refinancings thereof;
(f) the sale of any other assets of the Credit Parties and their
Subsidiaries outside the ordinary course of business so long as the total fair
market value for all such sales on an aggregate basis does not at any time
exceed thirty-three percent (33%) of Consolidated Net Worth; and
(g) the contemplated sale leaseback transaction involving the Credit
Parties' distribution warehouse in South ▇▇▇▇, ▇▇▇▇▇▇▇▇.
SECTION 11.7 Limitations on Dividends and Distributions.
Declare or pay any dividends upon any of its capital stock; purchase, redeem,
retire or otherwise acquire, directly or indirectly, any shares of its capital
stock, or make any distribution of cash, property or assets among the holders of
shares of its capital stock, or make any change in its capital structure that
could reasonably be expected to have a Material Adverse Effect; provided that:
(a) the Credit Parties may pay dividends solely in shares of their own capital
stock or other ownership interest (including dividends consisting of rights to
purchase such capital stock or other ownership interest), (b) any Subsidiary may
pay dividends or make distributions to the Credit Parties or any Wholly-Owned
Subsidiary of the Credit Parties, (c) any Credit Party may pay dividends or make
distributions to any other Credit Party and (d) as long as no Default or Event
of Default has occurred and is continuing or would be created thereby (i) the
Credit Parties may declare and pay dividends on shares of their capital stock or
other ownership interests, (ii) the Credit Parties or any Subsidiary may redeem
shares of their capital stock or other ownership interest pursuant to a plan
approved by the Board of Directors of the Credit Parties or such Subsidiary, as
applicable and (iii) the Credit Parties or any Subsidiary may take any action
otherwise prohibited by this Section 11.7.
SECTION 11.8 Transactions with Affiliates.
Directly or indirectly enter into, or be a party to, any transaction with any
of its Affiliates, except (i) on terms that are no less favorable to it than it
would obtain in a comparable arm's length transaction with a Person not its
Affiliate,
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(ii) as contemplated by the Nine West Acquisition Agreement or the Sun
Acquisition Agreement or (iii) for transactions between Credit Parties or
between Credit Parties and Subsidiaries of Credit Parties.
SECTION 11.9 Changes in Fiscal Year End.
Change its Fiscal Year end, except in the case of New Nine West to make such
Fiscal Year end consistent with the other Credit Parties.
SECTION 11.10 Amendments; Payments and Prepayments of Material Debt and
Subordinated Debt.
Upon the occurrence and continuation of a Default or an Event of Default,
amend or modify (or permit the modification or amendment of) in any manner
materially adverse to the Lenders any of the terms or provisions of any Debt
in excess of $25,000,000, including without limitation the Additional Debt
Securities, if any, or any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for
value (including without limitation by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of
paying when due) any Subordinated Debt.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default.
Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any Governmental Authority or
otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any
Revolving Credit Loan or Reimbursement Obligation when and as due (whether at
maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Revolving Credit Loan or Reimbursement Obligation or the payment
of any other Obligation (other than any Obligation under any Hedging Agreement),
and such default shall continue unremedied for three (3) Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
to be made by the Credit Parties or any of their Subsidiaries, if applicable,
under this Agreement, any Loan Document or any amendment hereto or thereto,
shall at any time prove to have been incorrect or misleading in any material
respect when made or deemed made.
(d) Default in Performance of Certain Covenants. Any of the Credit
Parties shall default in the performance or observance of any covenant or
agreement contained in Article X or XI of this Agreement.
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(e) Default in Performance of Other Covenants and Conditions. Any of
the Credit Parties or any Subsidiary thereof, if applicable, shall default in
the performance or observance of any term, covenant, condition or agreement
contained in this Agreement (other than as specifically provided for otherwise
in this Section 12.1) or any other Loan Document and such default shall continue
for a period of thirty (30) days after written notice thereof has been given to
the Borrower by the Administrative Agent.
(f) Hedging Agreement. Any termination payments in an amount greater
than $35,000,000 shall be due by any Credit Party under any Hedging Agreement
and such amount is not paid within thirty (30) Business Days of the due date
thereof.
(g) Debt Cross-Default. Any of the Credit Parties or any of their
Subsidiaries shall (i) default in the payment of any Debt (other than the
Revolving Credit Loans or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $35,000,000, including, without
limitation, the obligations under the Five-Year Credit Agreement, beyond the
period of grace if any, provided in the instrument or agreement under which such
Debt was created, or (ii) default in the observance or performance of any other
agreement or condition relating to any Debt (other than the Revolving Credit
Loans or any Reimbursement Obligation), including, without limitation, the
obligations under the Five-Year Credit Agreement and any other documents
executed in connection therewith, the aggregate outstanding amount of which Debt
is in excess of $35,000,000 or contained in any instrument or agreement
evidencing, securing or relating thereto or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Debt (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, any such Debt to become due prior to its stated maturity (any
applicable grace period having expired).
(h) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of more
than thirty three and one-third percent (33.33%) of the common stock or
thirty-three and one-third percent (33.33%) of the voting power of any Credit
Party entitled to vote in the election of members of the board of directors of
such Credit Party or there shall have occurred under any indenture or other
instrument evidencing any debt in excess of $35,000,000 any "change in control"
(as defined in such indenture or other evidence of debt) obligating the Borrower
to repurchase, redeem or repay all or any part of the debt or capital stock
provided for therein (any such event, a "Change in Control") other than any
Change in Control resulting under any Outstanding Nine West Debt Obligations.
Further, except as set forth in Section 11.5, ▇▇▇▇▇ Apparel Group shall at all
times own 100% of the capital stock of ▇▇▇▇▇ Apparel Group Holdings and ▇▇▇▇▇
Apparel Group Holdings shall at all times own 100% of the capital stock of the
Borrower.
(i) Voluntary Bankruptcy Proceeding. Any Credit Party or any
Subsidiary thereof shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed
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against it in an involuntary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against any Credit Party or any Subsidiary thereof in any
court of competent jurisdiction seeking (i) relief under the federal bankruptcy
laws (as now or hereafter in effect) or under any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts, or (ii) the appointment of a trustee, receiver, custodian,
liquidator or the like for any Credit Party or any Subsidiary thereof or for all
or any substantial part of their respective assets, domestic or foreign, and
such case or proceeding shall continue without dismissal or stay for a period of
sixty (60) consecutive days, or an order granting the relief requested in such
case or proceeding (including, but not limited to, an order for relief under
such federal bankruptcy laws) shall be entered.
(k) [Reserved]
(l) Termination Event. The occurrence of any of the following events:
(i) the Borrower or any ERISA Affiliate fails to make full payment to an
Employee Benefit Plan when due (after giving effect to any applicable grace
period) of contributions in excess of $2,000,000 (ii) an accumulated funding
deficiency in excess of $2,000,000 occurs or exists, whether or not waived, with
respect to any Pension Plan or (iii) a Termination Event that could reasonably
be expected to result in liability in excess of $5,000,000 to the Borrower or
any ERISA Affiliate.
(m) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments to exceed $35,000,000 in any
Fiscal Year shall be entered against any Credit Party or any Subsidiary thereof
by any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
SECTION 12.2 Remedies.
Upon the occurrence of an Event of Default, with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Credit Parties:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Revolving Credit Loans, the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(other than any Hedging Agreement)(including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and all other
Obligations (other than Obligations owing under any Hedging Agreement), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any
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right of the Borrower to request borrowings or Letters of Credit thereunder;
provided, that upon the occurrence of an Event of Default specified in Section
12.1(i) or (j) with respect to the Credit Parties, the Credit Facility shall be
automatically terminated and all Obligations (other than obligations owing under
any Hedging Agreement) shall automatically become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit or cause to be deposited in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay the other Obligations. After all such Letters of
Credit shall have expired or been fully drawn upon, the Reimbursement Obligation
shall have been satisfied and all other Obligations shall have been paid in
full, the balance, if any, in such cash collateral account shall be promptly
returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc.
The enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Credit Parties, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment.
Each of the Lenders hereby irrevocably designates and appoints First Union as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes First
Union as Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and
65
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and such other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or such other Loan
Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent. Any reference to the Administrative Agent in this Article
XIII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.
SECTION 13.2 Delegation of Duties.
The Administrative Agent may execute any of its respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for actions occasioned solely by its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer thereof contained in this Agreement or
the other Loan Documents 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 the other Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or the other Loan Documents or for any failure of the Borrower
or any of its Subsidiaries to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the holder of any Revolving Credit Loan as the owner thereof for all
purposes unless such Revolving Credit Loan shall have been transferred in
accordance with Section 14.10 hereof. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement and the
other Loan Documents unless it shall first receive such advice or concurrence of
the Required Lenders (or, when expressly
66
required hereby or by the relevant other Loan Document, all the Lenders) as it
deems appropriate or 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 except for its own gross
negligence or willful misconduct. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, when expressly required hereby, all the Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Revolving Credit Loans.
SECTION 13.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless it has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that the Administrative Agent receives
such a notice, it shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests
of the Lenders, except to the extent that other provisions of this Agreement
expressly require that any such action be taken or not be taken only with the
consent and authorization or the request of the Lenders or Required Lenders,
as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor
any of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Revolving
Credit Loans and issue or participate in Letters of Credit hereunder and enter
into this Agreement. Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or
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creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 13.7 Indemnification.
The Lenders agree to indemnify the Administrative Agent in its capacity as
such and (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Revolving Credit Commitment Percentage from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Revolving Credit Loans or any Reimbursement Obligation) be imposed on, incurred
by or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent they result from the
Administrative Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 13.7 shall survive the payment of the Revolving
Credit Loans, any Reimbursement Obligation and all other amounts payable
hereunder and the termination of this Agreement.
SECTION 13.8 The Administrative Agent in Its Individual Capacity.
The Administrative Agent and its respective Subsidiaries and Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though the Administrative Agent were not an Administrative
Agent hereunder. With respect to any Revolving Credit Loans made or renewed by
it and with respect to any Letter of Credit issued by it or participated in by
it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent.
Subject to the appointment and acceptance of a successor as provided below,
the Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Credit Parties. Upon any such resignation, the Required Lenders
shall have the right, subject to the approval of the Credit Parties (so long as
no Default or Event of Default has occurred and is continuing), to appoint a
successor Administrative Agent, which successor shall have minimum capital and
surplus of at least $500,000,000. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, been approved (so long as no
Default or Event of Default has occurred and is continuing) by the Credit
Parties or have accepted such appointment within thirty (30) days after the
Administrative Agent's giving of notice of resignation, then the Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent
reasonably acceptable to the Credit Parties (so long as no Default or Event of
Default has occurred and is continuing), which successor shall have minimum
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment
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as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 13.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
SECTION 13.10 Syndication Agents and Documentation Agent.
Each Syndication Agent and Documentation Agent, respectively, each in their
capacity as Syndication Agent and Documentation Agent, respectively, shall have
no duties or responsibilities and no liabilities under this Agreement or any
other Loan Document but shall be entitled, in each such capacity, to the same
protections afforded to the Administrative Agent under this Article XIII.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Credit Parties: ▇▇▇▇▇ Apparel Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative Agent: One First Union Center, TW 4
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: First Union National Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Philadelphia, Pennsylvania 19107-7618
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on Schedule 1.1(a) hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and the Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Revolving Credit Loans
will be disbursed.
SECTION 14.2 Expenses; Indemnity.
The Borrower will (a) pay all reasonable out-of-pocket expenses of the
Administrative Agent in connection with (i) the preparation, execution and
delivery of this Agreement and each other Loan Document, whenever the same shall
be executed and delivered, including without limitation the reasonable
out-of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Administrative Agent and (ii) the preparation,
execution and delivery of any waiver, amendment or consent by the Administrative
Agent or the Lenders relating to this Agreement or any other Loan Document,
including without limitation reasonable fees and disbursements of counsel for
the Administrative Agent, (b) pay all reasonable out-of-pocket expenses of the
Administrative Agent actually incurred in connection with the administration of
the Credit Facility, (c) pay all reasonable out-of-pocket expenses of the
Administrative Agent and each Lender actually incurred in connection with the
enforcement of any rights and remedies of the Administrative Agent and the
Lenders under the Credit Facility, including to the extent reasonable under the
circumstances consulting with accountants, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons, and
(d) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
Administrative Agents, officers and directors, from and against any losses,
penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with this Agreement, any other Loan Document or the
Revolving Credit Loans, including without limitation reasonable attorney's and
consultant's fees, except to the extent that any of the foregoing result from
the gross negligence or willful misconduct of any indemnified party.
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SECTION 14.3 Set-off.
In addition to any rights now or hereafter granted under Applicable Law and
not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 14.10 are hereby
authorized by the Credit Parties at any time or from time to time, without
notice to the Credit Parties or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of the Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 12.2 and although such
Obligations shall be contingent or unmatured.
SECTION 14.4 Governing Law.
This Agreement, the Revolving Credit Notes and the other Loan Documents,
unless otherwise expressly set forth therein, shall be governed by, construed
and enforced in accordance with the laws of the State of New York.
SECTION 14.5 Consent to Jurisdiction.
Each of the parties hereto hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in New York County, New
York, in any action, claim or other proceeding arising out of any dispute in
connection with this Agreement and the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations. Each of the parties hereto hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by any other party hereto in connection with this Agreement
or the other Loan Documents, any rights or obligations hereunder or thereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 14.1. Nothing in this Section 14.5
shall affect the right of any of the parties hereto to serve legal process in
any other manner permitted by Applicable Law or affect the right of any of the
parties hereto to bring any action or proceeding against any other party hereto
or its properties in the courts of any other jurisdictions.
SECTION 14.6 Waiver of Jury Trial.
THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH CREDIT PARTY HEREBY ACKNOWLEDGE
THEY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY JUDICIAL PROCEEDING,
ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF, CONNECTED WITH OR RELATING TO
THE LOAN DOCUMENTS ("Dispute") IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR
THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 14.7 Reversal of Payments.
To the extent any Credit Party makes a payment or payments to the
Administrative Agent for the ratable benefit of the Lenders or the
71
Administrative Agent receives any payment or proceeds of the collateral which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) Each of the parties to this Agreement recognizes that, in the event
such party fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the other parties hereto. Therefore, each of the parties hereto agrees
that the other parties hereto, at such other party's option, shall be entitled
to pursue temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
(b) The Administrative Agent, Lenders and the Credit Parties (on behalf
of themselves and their Subsidiaries) hereby agree that no such Person shall
have a remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 14.9 Accounting Matters.
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time, provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
therewith.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Credit Parties, the Administrative Agent and the
Lenders, all future holders of the Revolving Credit Notes, and their respective
successors and permitted assigns, except that the Borrower shall not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender other than pursuant to Section 11.5.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Borrower (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the
72
Administrative Agent, which consents shall not be unreasonably withheld, assign
to one or more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Extensions of Credit at the time owing to it and the Revolving
Credit Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's Revolving Credit Commitment
and all other rights and obligations under this Agreement;
(ii) if less than all of the assigning Lender's Revolving
Credit Commitment or Revolving Credit Loans is to be assigned, the Revolving
Credit Commitment or Revolving Credit Loans so assigned shall not be less than
$10,000,000;
(iii) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit G attached hereto
(an "Assignment and Acceptance"), together with any Revolving Credit Note or
Revolving Credit Notes subject to such assignment;
(iv) such assignment shall not, without the consent of
the Borrower, on behalf of itself and the other Credit Parties, require the
Borrower, or any Credit Party, to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Revolving Credit
Loans or the Revolving Credit Notes under the blue sky laws of any state;
(v) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,000 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable upon any
assignment by a Lender to an Affiliate thereof; and
(vi) no consents will be required for assignments where
the Eligible Assignee is an Affiliate of the assigning Lender.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least ten (10) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned in such Assignment and Acceptance, have the rights and obligations of a
Lender hereby and (B) the Lender thereunder shall, to the extent of the interest
assigned in such assignment, be released from its obligations under this
Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and record the names and addresses of
the Lenders and the amount of the Extensions of Credit with respect to each
Lender from time to time in the Register.
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No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Issuance of New Revolving Credit Notes. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an Eligible
Assignee together with any Revolving Credit Note or Revolving Credit Notes if
any have been issued pursuant to this Agreement, subject to such assignment and
the written consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower, on behalf of itself and the other Credit Parties; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrower.
Within ten (10) Business Days after receipt of notice, if requested by the
Eligible Assignee the Borrower shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Revolving Credit Note or Revolving Credit
Notes, a new Revolving Credit Note or Revolving Credit Notes to the order of
such Eligible Assignee in amounts equal to the Revolving Credit Commitment
assumed by it pursuant to such Assignment and Acceptance and a new Revolving
Credit Note or Revolving Credit Notes to the order of the assigning Lender in an
amount equal to the Revolving Credit Commitment retained by it hereunder. Such
new Revolving Credit Note or Revolving Credit Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Revolving Credit Note or Revolving Credit Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Revolving Credit Notes delivered to the assigning
Lender. Each surrendered Revolving Credit Note or Revolving Credit Notes shall
be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and/or obligations
under this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Revolving Credit Notes held by it); provided that:
(i) each such participation shall be in an amount not
less than $10,000,000;
74
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment) shall remain
unchanged;
(iii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations;
(iv) the Credit Parties, 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;
(v) such Lender shall not permit such participant the
right to approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate on any
Revolving Credit Loan or Reimbursement Obligation, extend the term or increase
the amount of the Revolving Credit Commitment, reduce the amount of any fees to
which such participant is entitled, or extend any scheduled payment date for
principal, interest or fees of any Revolving Credit Loan, except as expressly
contemplated hereby or thereby; and
(vi) any such disposition shall not, without the consent
of the Borrower, on behalf of itself and the other Credit Parties, require the
Borrower or any other Credit Party, to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Revolving Credit
Loans or the Revolving Credit Notes under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. Each of the
Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the prior written consent of the Credit Parties,
(h) to the extent such Information (A) becomes publicly available other than as
a result of a breach of this Section or (B) becomes available to the
Administrative Agent, the Issuing Lenders or any Lender on a nonconfidential
basis from a source other than the Credit Parties or (i) to Gold Sheets and
other similar bank trade publications, such information to consist of deal terms
and other information (customarily found in such publications) upon the Credit
Parties' prior review and approval, which shall not be unreasonably withheld or
delayed. For the purposes of this Section, "Information" means all information
received from the Credit Parties or any of their Subsidiaries relating to the
Credit Parties or their business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential
75
basis prior to disclosure by the Credit Parties; provided that, in the case of
information received from the Credit Parties after the Closing Date (other than
certificates or other information specifically required by the terms of this
Agreement), 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.
(h) Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle organized for the specific purpose of making or
acquiring participations or investing in loans of the type made pursuant to this
Agreement (a "SPC"), correctly identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrower, the option
to provide to the Borrower all or any part of any Extension of Credit that such
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Extension of Credit and (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Extension of
Credit, the Granting Lender shall be obligated to make such Extension of Credit
pursuant to the terms hereof. The making of an Extension of Credit by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Extension of Credit were made by such Granting Lender.
Each party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this clause, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interest in any
Extension of Credit to the Granting Lender or to any financial institution
(consented to by the Borrower and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the funding
or maintenance of Extensions of Credit and (ii) disclose on a confidential basis
any non-public information relating to Extensions of Credit to any rating
agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This clause may not be amended
without the written consent of each SPC.
(i) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Revolving Credit Note to any Federal
Reserve Bank in accordance with Applicable Law.
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SECTION 14.11 Amendments, Waivers and Consents.
Except as set forth below, any term, covenant, agreement or condition of this
Agreement or any of the other Loan Documents may be amended or waived by the
Lenders, and any consent given by the Lenders, if, but only if, (a) in the case
of an amendment, waiver or consent for which a substantially similar
corresponding amendment, waiver or consent with regard to the Five-Year Credit
Agreement will be made effective thereunder contemporaneously, such amendment,
waiver or consent is in writing signed by the Required Lenders (or by the
Administrative Agent with the consent of the Required Lenders) and delivered to
the Administrative Agent and, in the case of an amendment, signed by the Credit
Parties and (b) in the case of any other amendment, waiver or consent
specifically impacting only this Agreement and the other Loan Documents, such
amendment, waiver or consent is in writing signed by the Required Agreement
Lenders (or by the Administrative Agent with the consent of the Required
Agreement Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Credit Parties; provided, in each case, that:
(a) no amendment, waiver or consent shall (i) release any of the Credit
Parties, (ii) increase the amount or extend the time of the obligation of the
Lenders to make Revolving Credit Loans or issue or participate in Letters of
Credit (except as expressly contemplated by Section 2.6), (iii) extend the
originally scheduled time or times of payment of the principal of any Revolving
Credit Loan or Reimbursement Obligation or the time or times of payment of
interest or fees on any Revolving Credit Loan or Reimbursement Obligation, (iv)
reduce the rate of interest or fees payable on any Revolving Credit Loan or
Reimbursement Obligation, (v) reduce the principal amount of any Revolving
Credit Loan or Reimbursement Obligation, (vi) permit any subordination of the
principal or interest on any Revolving Credit Loan or Reimbursement Obligation,
(vii) permit any assignment (other than as specifically permitted or
contemplated in this Agreement) of any of the Credit Parties' rights and
obligations hereunder or (viii) amend the provisions of this Section 14.11 or
the definition of Required Lenders or Required Agreement Lenders, without the
prior written consent of each Lender; and
(b) no amendment, waiver or consent to the provisions of (i) Article
XIII shall be made without the written consent of the Administrative Agent and
(ii) Article III without the written consent of each Issuing Lender.
SECTION 14.12 Performance of Duties.
The Credit Parties' obligations under this Agreement and each of the Loan
Documents shall be performed by the Credit Parties at their sole cost and
expense.
SECTION 14.13 All Powers Coupled with Interest.
All powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Obligations remain unpaid or unsatisfied or the Credit
Facility has not been terminated.
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SECTION 14.14 Survival of Indemnities.
Notwithstanding any termination of this Agreement, the indemnities to which
the Administrative Agent and the Lenders are entitled under the provisions of
this Article XIV and any other provision of this Agreement and the Loan
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.
SECTION 14.15 Titles and Captions.
Titles and captions of Articles, Sections and subsections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 14.16 Severability of Provisions.
Any provision of this Agreement or any other Loan Document which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining provisions hereof
or thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 14.17 Counterparts.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and shall be binding upon all parties, their successors
and assigns, and all of which taken together shall constitute one and the same
agreement. Delivery of any executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 14.18 Term of Agreement.
This Agreement shall remain in effect from the Closing Date through and
including the date upon which all Obligations (other than obligations owing by
any Credit Party to any Lender or Affiliate of a Lender or the Administrative
Agent under any Hedging Agreement) shall have been indefeasibly and irrevocably
paid and satisfied in full. No termination of this Agreement shall affect the
rights and obligations of the parties hereto arising prior to such termination.
SECTION 14.19 Inconsistencies with Other Documents; Independent Effect of
Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control.
(b) The Borrower expressly acknowledges and agrees that each covenant
contained in Article IX, X, or XI hereof shall be given independent effect.
[Signature pages to follow]
Schedule 1.1(a)
(Lenders and Revolving Credit Commitments)
EXHIBIT A
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
This Second Amended and Restated Revolving Credit Note amends, restates,
replaces and extinguishes in full the obligations of the Borrower under
the Amended and Restated Credit Note dated January 1, 1999 executed by
the Debtors (as such term is defined therein) in favor of the Lenders
party to the Amended and Restated 364-Day Credit Agreement and the Amended
and Restated Three-Year Credit Agreement, each dated as of October 15, 1998
by and among the Borrower, other parties which may from time to time become
an Additional Obligor or the Borrower, as applicable, under the terms
thereof, the Lenders and First Union National Bank, as Administrative Agent
for the Lenders.
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
$________________________________________ _____________, 1999
FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇ APPAREL GROUP USA, INC., a
corporation organized under the laws of Pennsylvania, (the "Borrower"),
▇▇▇▇▇ APPAREL GROUP, INC., a corporation organized under the laws of
Pennsylvania, ▇▇▇▇▇ APPAREL GROUP HOLDINGS, INC., a corporation organized
under the laws of Delaware, and ▇▇▇▇ ASSET SUB INC., a corporation organized
under the laws of Delaware (collectively, with the Borrower, the "Debtors"),
hereby jointly and severally promise to pay to the order of _________________,
(the "Lender"), at the place and times provided in the Credit Agreement referred
to below, the principal sum of ______________________ DOLLARS ($_____________)
or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans
made to the Borrower by the Lender pursuant to that certain Second Amended and
Restated 364-Day Credit Agreement dated as of June 15, 1999 (as amended,
restated, supplemented or otherwise modified, the "Credit Agreement") by and
among ▇▇▇▇▇ Apparel Group USA, Inc., the Additional Obligors referred to
therein, the Lenders who are or may become a party thereto (collectively, the
"Lenders"), First Union National Bank, as Administrative Agent, The Chase
Manhattan Bank and Citibank, N.A., as Syndication Agents, and NationsBank, N.A.,
as Documentation Agent. Capitalized terms used herein and not defined herein
shall have the meanings assigned thereto in the Credit Agreement.
The unpaid principal amount of Revolving Credit Loans from time to time
outstanding is subject to mandatory repayment from time to time as provided
in the Credit Agreement and shall bear interest as provided in Section 5.1 of
the Credit Agreement. All payments of principal and interest on Revolving
Credit Loans shall be payable in lawful currency of the United States of America
in immediately available funds to the account designated in the Credit
Agreement.
This Second Amended and Restated Revolving Credit Note (the "Revolving Credit
Note") is entitled to the benefits of, and evidences Obligations incurred under,
the Credit Agreement, to which reference is made for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Obligations evidenced by this
Revolving Credit Note and on which such Obligations may be declared to be
immediately due and payable.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
The Debt evidenced by this Revolving Credit Note is senior in right of payment
to all Subordinated Debt referred to in the Credit Agreement.
The Debtors hereby waive all requirements as to diligence, presentment, demand
of payment, protest and (except as required by the Credit Agreement) notice of
any kind with respect to this Revolving Credit Note.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have executed this Revolving Credit Note
under seal as of the day and year first above written.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
▇▇▇▇▇ APPAREL GROUP, INC.
By:___________________________
Name: ________________________
Title: _______________________
▇▇▇▇▇ APPAREL GROUP HOLDINGS, INC.
By:___________________________
Name: ________________________
Title: _______________________
▇▇▇▇ ASSET SUB INC.
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT B
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF NOTICE OF REVOLVING CREDIT BORROWING
NOTICE OF REVOLVING CREDIT BORROWING
Dated as of: ______________
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Revolving Credit Borrowing is delivered to you
under Section 2.2(a) of the Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999 (as amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), by and among ▇▇▇▇▇ APPAREL GROUP USA, INC., a
Pennsylvania corporation (the "Borrower"), the Additional Obligors referred to
therein, the lenders party thereto (the "Lenders"), First Union National Bank,
as Administrative Agent, The Chase Manhattan Bank and Citibank, N.A., as
Syndication Agents, and NationsBank, N.A., as Documentation Agent.
1. The Borrower hereby requests that the Lenders make a Revolving Credit Loan
to the Borrower in the aggregate principal amount of $___________. (Complete
with an amount in accordance with Section 2.2(a) of the Credit Agreement.)
2. The Borrower hereby requests that such Revolving Credit Loan be made on
the following Business Day: _____________________. (Complete with a Business
Day in accordance with Section 2.2(a) of the Credit Agreement).
3. The Borrower hereby requests that the Revolving Credit Loan bear interest
at the following interest rate, plus the Applicable Margin, as set forth below:
Interst Period Termination Date for
Component (LIBOR Interest Period
of Loan Interest Rate Rate only) (If applicable)
-------- ------------- --------- -------------
Base Rate or
LIBOR Rate
4. The principal Dollar Amount of all Revolving Credit Loans and L/C
Obligations outstanding as of the date hereof (including the requested Revolving
Credit Loan) does not exceed the maximum Dollar Amount permitted to be
outstanding pursuant to the terms of the Credit Agreement.
5. The Borrower hereby represents and warrants that the conditions specified
in Section 6.3 of the Credit Agreement have been satisfied or waived as of the
date hereof.
6. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Revolving
Credit Borrowing as of the ____ day of _______, ____.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT C
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF NOTICE OF ACCOUNT DESIGNATION
NOTICE OF ACCOUNT DESIGNATION
Dated as of: _________
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you under Section 2.2(b) of
the Second Amended and Restated 364-Day Credit Agreement dated as of June 15,
1999 (as amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), by and among ▇▇▇▇▇ APPAREL GROUP USA, INC., a Pennsylvania
corporation (the "Borrower"), the Additional Obligors referred to therein, the
lenders party thereto (the "Lenders"), First Union National Bank, as
Administrative Agent (the "Administrative Agent"), The Chase Manhattan Bank and
Citibank, N.A., as Syndication Agents, and NationsBank, N.A., as Documentation
Agent.
1. The Administrative Agent is hereby authorized to disburse all Loan
proceeds into the following account(s):
____________________________
ABA Routing Number: _________
Account Number: _____________
2. This authorization shall remain in effect until revoked or until a
subsequent Notice of Account Designation is provided by the Borrower to the
Administrative Agent.
3. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation as of the _____ day of _______, ____.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT D
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF NOTICE OF PREPAYMENT
NOTICE OF PREPAYMENT
Dated as of: _____________
First Union National Bank,
as Administrative Agent
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you under Section 2.3(c)
of the Second Amended and Restated 364-Day Credit Agreement dated as of June 15,
1999 (as amended, restated, supplemented or otherwise modified, the "Credit
Agreement") by and among ▇▇▇▇▇ APPAREL GROUP USA, INC., a Pennsylvania
corporation (the "Borrower"), the Additional Obligors referred to therein, the
lenders party thereto (the "Lenders"), First Union National Bank, as
Administrative Agent, The Chase Manhattan Bank and Citibank, N.A., as
Syndication Agents, and NationsBank, N.A., as Documentation Agent.
1. The Borrower hereby provides notice to the Administrative Agent that it
shall repay the following [Base Rate Loans] and/or [LIBOR Rate Loans]:
____________________.
(Complete with an amount in accordance with Section 2.3(c) of the Credit
Agreement.)
2. The Borrower shall repay the above-referenced Revolving Credit Loans on
the following Business Day: _______________. (Complete in accordance with
Section 2.3(c) of the Credit Agreement.)
3. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment as
of the ____ day of _______, ____.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT E
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF NOTICE OF CONVERSION/CONTINUATION
NOTICE OF CONVERSION/CONTINUATION
Dated as of: _____________
First Union National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (the "Notice") is delivered
to you under Section 5.2 of the Second Amended and Restated 364-Day Credit
Agreement dated as of June 15, 1999 (as amended, restated, supplemented or
otherwise modified, the "Credit Agreement"), by and among ▇▇▇▇▇ APPAREL GROUP
USA, INC., a Pennsylvania corporation (the "Borrower"), the Additional Obligors
referred to therein, the lenders party thereto (the "Lenders"), First Union
National Bank, as Administrative Agent, The Chase Manhattan Bank and Citibank,
N.A., as Syndication Agents, and NationsBank, N.A., as Documentation Agent.
1. This Notice is submitted for the purpose of: (Check one and complete
applicable information in accordance with the Credit Agreement.)
Converting all or a portion of a Base Rate Loan into a LIBOR Rate Loan
(a) The aggregate outstanding principal balance of such Revolving Credit
Loan is $_______________.
(b) The principal amount of such Revolving Credit Loan to be converted
is $_______________.
(c) The requested effective date of the conversion of such Revolving
Credit Loan is _______________.
(d) The requested Interest Period applicable to the converted Revolving
Credit Loan is _______________.
Converting all or a portion of a LIBOR Rate Loan into a Base Rate Loan
(a) The aggregate outstanding principal balance of such Revolving Credit
Loan is $_______________
(b) The last day of the current Interest Period for such Revolving Credit
Loan is _______________.
(c) The principal amount of such Revolving Credit Loan to be converted
is $_______________.
(d) The requested effective date of the conversion of such Revolving
Credit Loan is _______________.
Continuing all or a portion of a LIBOR Rate Loan as a LIBOR Rate Loan
(a) The aggregate outstanding principal balance of such Revolving Credit
Loan is $_______________.
(b) The last day of the current Interest Period for such Revolving Credit
Loan is _______________.
(c) The principal amount of such Revolving Credit Loan to be continued
is $_______________.
(d) The requested effective date of the continuation of such Revolving
Credit Loan is _______________.
(e) The requested Interest Period applicable to the continued Revolving
Credit Loan is _______________.
2. The principal Dollar Amount of all Revolving Credit Loans and L/C
Obligations outstanding as of the date hereof does not exceed the maximum Dollar
Amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.
3. The Borrower hereby represents and warrants that no Default or Event of
Default (as defined in the Credit Agreement) has occurred and is continuing.
4. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Conversion/
Continuation as of the ____ day of __________, ____.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT F
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
OFFICER'S COMPLIANCE CERTIFICATE
The undersigned, on behalf of ▇▇▇▇▇ APPAREL GROUP USA, INC. (the "Borrower"),
hereby certifies to the Administrative Agent and the Lenders, each as defined in
the Credit Agreement referred to below, as follows:
1. This Certificate is delivered to you pursuant to Section 8.2 of the Second
Amended and Restated 364-Day Credit Agreement dated as of June 15, 1999 (as
amended, restated, supplemented or otherwise modified, the "Credit Agreement"),
by and among the Borrower, the Additional Obligors referred to therein, the
lenders party thereto (the "Lenders"), First Union National Bank, as
administrative agent (the "Administrative Agent"), The Chase Manhattan Bank and
Citibank, N.A., as Syndication Agents, and NationsBank, N.A., as Documentation
Agent. Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.
2. I have reviewed the consolidated financial statements of ▇▇▇▇▇ Apparel
Group, Inc. and its Subsidiaries dated as of _______________ and for the
_______________ period[s] then ended and such statements present fairly in all
material respects the consolidated financial condition of ▇▇▇▇▇ Apparel Group,
Inc. and its Subsidiaries as of their respective dates and the results of the
consolidated operations of ▇▇▇▇▇ Apparel Group, Inc. and its Subsidiaries for
the respective period[s] then ended, subject to normal year end adjustments for
interim statements.
3. I have reviewed the terms of the Credit Agreement, and the related Loan
Documents and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and the condition of ▇▇▇▇▇ Apparel Group,
Inc. and its Subsidiaries during the accounting period covered by the financial
statements referred to in Paragraph 2 above. Such review has not disclosed the
existence during or at the end of such accounting period of any condition or
event that constitutes a Default or an Event of Default, nor do I have any
knowledge of the existence of any such condition or event as at the date of this
Certificate [except, if such condition or event existed or exists, describe the
nature and period of existence thereof and what action the Borrower has taken,
is taking and proposes to take with respect thereto].
4. The Applicable Margin and information as to the debt ratings necessary for
determining such figure are set forth on the attached Schedule 1.
5. ▇▇▇▇▇ Apparel Group, Inc. and its Subsidiaries are in compliance with the
financial covenants contained in Article X of the Credit Agreement as shown on
such Schedule 1.
[Signature Page Follows]
WITNESS the following signature as of the _____ day of _________, ____.
▇▇▇▇▇ APPAREL GROUP USA, INC.
By:___________________________
Name: ________________________
Title: _______________________
Schedule 1
to
Officer's Compliance Certificate
[To be provided by Borrower in form reasonably acceptable to the
Administrative Agent]
EXHIBIT G
to
Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999
by and among
▇▇▇▇▇ APPAREL GROUP USA, INC.,
as Borrower,
the Additional Obligors referred to therein,
the Lenders party thereto,
First Union National Bank,
as Administrative Agent,
The Chase Manhattan Bank
and
Citibank, N.A., as Syndication Agents,
and
NationsBank, N.A.,
as Documentation Agent
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
Dated as of: _________
Reference is made to the Second Amended and Restated 364-Day Credit Agreement
dated as of June 15, 1999, as amended, restated, supplemented or otherwise
modified (the "Credit Agreement") by and among ▇▇▇▇▇ APPAREL GROUP USA, INC., a
Pennsylvania corporation (the "Borrower"), the Additional Obligors referred to
therein, the lenders party thereto (the "Lenders"), First Union National Bank,
as Administrative Agent, The Chase Manhattan Bank and Citibank, N.A., as
Syndication Agents, and NationsBank, N.A., as Documentation Agent. Capitalized
terms used herein which are not defined herein shall have the meanings assigned
thereto in the Credit Agreement.
___________________________ (the "Assignor") and _________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, as of the Effective Date (as
defined below), a ____% interest in and to all of the Assignor's interest,
rights and obligations with respect to its Revolving Credit Commitment and
Revolving Credit Loans (including such percentage of the outstanding L/C
Obligations), which percentage represents not less than $10,000,000, unless such
percentage equals 100% of such Lender's Revolving Credit Commitment, and the
Assignor thereby retains ____% of its interest therein.
This Assignment and Acceptance is entered pursuant to, and authorized by,
Section 14.10 of the Credit Agreement.
2. The Assignor (i) represents that, as of the date hereof, its Revolving
Credit Commitment Percentage (without giving effect to assignments thereof which
have not yet become effective) under the Credit Agreement is ____%, the
outstanding balances of its Revolving Credit Loans (including its Revolving
Credit Commitment Percentage of the outstanding L/C Obligations); (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that the Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or its Subsidiaries or
the performance or observance by the Borrower or its Subsidiaries of any of
their obligations under the Credit Agreement or any other instrument or
document furnished or executed pursuant thereto; and (iv) to the extent it has
received Revolving Credit Note(s) from the Borrower, attaches the applicable
Revolving Credit Note(s) delivered to it under the Credit Agreement and
requests that the Borrower exchange such Revolving Credit Note(s) for new
Revolving Credit Notes payable to each of the Assignor and the Assignee as
follows:
Revolving Credit Note
Payable to the Order of: Principal Amount of Note:
__________________________ $______________________
__________________________ $______________________
3. The Assignee (i) represents and warrants that it is legally authorized to
enter into this Assignment and Acceptance; (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 8.1 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Assignor or any other Lender
or the Administrative Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iv) confirms that it is
an Eligible Assignee; (v) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (vi) agrees that it will perform in accordance
with their terms all the obligations which by the terms of the Credit
Agreement and the other Loan Documents are required to be performed by it as a
Lender; (vii) agrees to hold all confidential information in accordance with the
provisions of Section 14.10(g) of the Credit Agreement; and (viii) includes
herewith for the Administrative Agent the forms required by Section 5.11(e) of
the Credit Agreement (if not previously delivered).
4. The effective date for this Assignment and Acceptance shall be as set
forth in Section 1 of Schedule 1 hereto (the "Effective Date"), subject to the
consents referred to in the following sentence. Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for,
to the extent required by the Credit Agreement, consent by the Borrower and the
Administrative Agent and acceptance and recording in the Register.
5. Upon such consents, acceptance and recording, from and after the Effective
Date,(i) the Assignee shall be a party to the Credit Agreement and the other
Loan Documents to which Lenders are parties and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender under
each such agreement, and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan Documents.
6. Upon such consents, acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
interest assigned hereby (including payments of principal, interest, fees and
other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT UNDER SEAL
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
WITNESS the following signatures as of the ____ day of ______, ____.
ASSIGNOR:
By:___________________________
Title: _______________________
ASSIGNEE:
By:___________________________
Name: ________________________
Title: _______________________
Acknowledged and Consented to on behalf of the Credit Parties:
▇▇▇▇▇ APPAREL GROUP USA, INC.
By: ______________________________
Name: _____________________________
Title: ____________________________
Consented to and Accepted by:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By: ______________________________
Name: _____________________________
Title: ____________________________
Schedule 1
to
Assignment and Acceptance
1. Effective Date: ____________, ____
2. Assignor's Interest
Prior to Assignment:
(a) Revolving Credit Commitment Percentage %
(b) Outstanding balance of Revolving Credit Loans $
(c) Outstanding balance of Assignor's Revolving
Credit Commitment Percentage of the
L/C Obligations $
3. Assigned Interest (from Section 1) of:
(a) Revolving Credit Loans %
4. Assignee's Extensions of Credit
After Effective Date:
(a) Total outstanding balance of
Assignee's Revolving Credit Loans
(line 2(b) times line 3(a)) $
(b) Total outstanding balance of
Assignee's Revolving Credit
Commitment Percentage
of the L/C Obligations
(line 2(c) times line 3(a)) $
5. Retained Interest of Assignor after
Effective Date:
(a) Retained Interest (from Section 1):
(i) Revolving Credit Commitment Percentage %
(b) Outstanding balance of Assignor's Revolving Credit Loans
(line 2(b) times line 5(a)(i)) $
(c) Outstanding balance of Assignor's
Revolving Credit Commitment
Percentage of L/C Obligations
(line 2(c) times line 5(a)(i)) $
6. Payment Instructions:
(a) If payable to Assignor,
to the account of Assignor to:
ABA No.:
Account Name:
Account No.
Attn:
Ref:
(b) If payable to Assignee, to the account
of Assignee to:
ABA No.:
Account Name:
Account No.:
Attn:
Ref: